The Impact of Economic Inactivity
For working aged people who are economically inactive the main reason given is long term sickness including disability. When an individual becomes economically inactive it becomes less likely they will return to the workforce. Not only does this have a huge impact financially and mentally on the individual, but this creates a large cost for businesses and the government.
In such circumstances, businesses often have to follow lengthy capability and disciplinary procedures to manage staff out fairly and then recruit and retrain new employees.
Economically inactive people mean a cost to the government in disability payments, benefit payments, a loss of tax, and impact on the NHS, including mental health services for those who might end up suffering with their mental health due to the impacts of economic inactivity and long-term illness and disability.
The loss is not only financial but includes talent, knowledge and skills that are invaluable to businesses and training future generations. With these skills and individuals lost to economic inactivity gaps emerge that with appropriate early action could have been avoided.
Government consultation launched on occupational health services:
With the impact of the economic inactive in mind, the Government has launched a new consultation into occupational health (OH) services with the aim to be clear on what OH is and provide a simple and clear baseline for the provision of quality OH services that businesses of all sizes can easily draw on.
The consultation considers 3 points:
- To provide a simple and clear baseline OH provision for all.
- Assessing international practices and what can be taken to increase OH usage in the UK.
- Develop the OH workforce to enable it to meet demand of an increased OH usage.
The Government is also looking to provide a tax incentive to make OH services more affordable, something which will be welcomed by SMEs in particular. We covered this in our recent article which can be found here: Consultation On Tax Relief For Occupational Health Services | BRM Solicitors – Law Firm In Chesterfield and Sheffield (brmlaw.co.uk)
Instructing OH can be expensive, time consuming and sometimes seen as a tick box exercise that offers no useful next steps for employers and employees. Understandably, employers can begrudge paying for a service which instead of proving assistance becomes an expensive hinderance. The Government is aware that the process needs to change and is considering useful ways in which to achieve the desired outcome that OH services are available to every employee and business and that they achieve the desired outcome to keep people in work and keep employees healthy and safe.
The consultation will close on 12 October 2023 and you are encouraged to share your thoughts and views, particularly if you regularly instruct OH. If you would like to find out more you can here: Occupational Health: Working Better (publishing.service.gov.uk).
We will keep you up to date with the progress of the consultation. If you would like any further information or assistance with any other area of employment law, please contact our Employment Team on 01246 555 111 or contact:
Amy Hallam, Head of Employment 0114 3496989 or email amy.hallam@brmlaw.co.uk
Ellie Leatherday, Associate 01246 564 002 or email ellie.leatherday@brmlaw.co.uk
Jade Taylor, Trainee Solicitor 01246 564 058 or email jade.taylor@brmlaw.co.uk
