EEF/Jelf survey – Industry urges radical action to tackle sickness absence

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Tax breaks for medical treatments urged to reduce burden on stretched NHS

Key findings:

  • Two fifths of manufacturers say long term absence increased in last 2 years
  • NHS not meeting needs of 40% of manufacturers to get employees back to work
  • Only 1 in 5 of manufacturers currently pays for non NHS medical treatment
  • 60% of manufacturers would pay for private treatment if cost offset
  • ‘Fit Note’ system continues to deteriorate
  • Manufacturers pay out £0.6 billion pa in sick pay, £211 per employee

Britain’s manufacturers are urging tax breaks to tackle the UK’s chronic sickness absence problem, which would encourage more employers to pay for private treatment for employees and ease the burden on an under pressure NHS.

The call was made today by EEF, the manufacturers’ organisation on the back of the UK’s biggest business survey on sickness absence and, ahead of a Green Paper on workforce health to be published this summer. The survey, published with Jelf shows that long term absence is continuing to increase while, at the same time, the NHS is proving unable to support the working age population by providing timely and effective rehabilitation and medical treatment.

Furthermore, the survey shows a further fall in employers’ confidence in GPs to improve return to work rates with the effectiveness of the ‘fit note’ system continuing to deteriorate.

According to EEF, more fiscal incentives to encourage employers to provide private healthcare is required as part of efforts to tackle the UK’s productivity puzzle, believing that a fit and healthy workforce is an essential component of economic growth.

Commenting, Terry Woolmer, Head of Health & Safety policy at EEF said:

“Keeping people fit and healthy, whilst enabling a speedy return to work from absence is essential to economic growth and improvements in productivity. However, currently we have long term absence on the increase and an under pressure NHS which is struggling to deal with the issue. Given this situation is only going to get worse with an ageing population radical action is now required.

“Government must now use fiscal incentives to encourage employers to pay for private medical treatment and allow it to be offset in the same way as other business expenses. Not only would this help take the pressure off the NHS but it would allow a speedier return to work. This would be a win win for Government, the employee and employers.”

Iain Laws, Managing Director, UK Healthcare & Group Risk at Jelf, said:

“The health of employees is a major factor in an organisation’s competitiveness. More and more employers are realising that both keeping people in work and, getting them back earlier from absence, is enormously important for their business.

“Healthy employees can be up to three times as productive as those in poor health. They experience fewer motivational problems are more resilient to change and are more likely to be engaged with the business priorities. It is essential that companies have systems in place which recognise this and which place employee health provision at their heart.”

According to the survey 41% of companies say long term absence has increased in the last two years. This matches the increase reported in the 2015 survey which was the largest increase in five years. Of the workforce covered in the survey, 5% were off for a period of four weeks or more.

Two fifths of companies still rely exclusively on the NHS as the primary source of treatment to reduce absence with less than a fifth (18%) currently paying for non NHS treatment. However almost a third (31%) would pay for medical treatment if there was a benefit to the company while almost three fifths (59%) would be most incentivised to pay for the cost of treatment or, workplace adjustment, by some form of employer allowable business expense.

EEF’s survey also provides some tentative evidence of the effectiveness of the new ‘Fit for Work’ service introduced last September. At this stage, whilst there is high awareness of the service only a fifth (19%) of employers said that they would definitely be willing to pay for medical treatments recommended by the Fit for Work service. Three-fifths (59%) of survey respondents were yet to make up their mind and almost a fifth (18%) said they would not use it at all.

In response, EEF has made the following recommendations:

  • Review the current levels of employer taxation for employer led health interventions where they are currently taxed as benefits in kind.
  • Carry out sensitivity analysis of different fiscal incentives such as changes to allowable business expenses, tax credits and tax relief.
  • Treat tax relief for Private Medical Insurance (PMI) in the same way as the £500 tax exemption for treatments recommended by the Fit for Work service.
  • Consider tax relief on Income protection insurance or group income protection (GIP) as a means of providing sick pay and rehabilitation support to employees through employers.
  • Provide some form of fiscal incentive to companies who fund treatments as part of rehabilitation which would otherwise have had to be provided by the NHS, or which prevented state Employment and Support Allowance (ESA) payments.

Other key findings

  • 45% of employers are reporting the ‘fit note’ is failing to get employees back to work earlier (35% in 2010)
  • Only 13% (24% in 2010) have said the ‘fit note’ has enabled an earlier return to work
  • 47% of companies disagree that the advice of GPs fitness for work has improved compared to 13% who agree. The balance between those agreeing and disagreeing continues to increase (21% in 2010 to 35% in 2015)
  • Back problems and musculoskeletal disorders remains the main cause of long term absence followed by medical tests, investigations and surgery.
  • The annual absence rate for manufacturers was 2.3% which equates to an average 5.3 days per employee per year. These figures have remained around the same rates for the past six years.

The survey covered 306 companies.

You can access the report here.

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Media Team 020 7654 1576

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