North West no longer has highest sickness rate in the UK

Steve Warren, North West Region Director at EEF

The North West no longer has the worst sickness rate in the UK, according to the 2016 Sickness Absence Survey report, published today by EEF, the manufacturers’ organisation, and employee benefits company, Jelf.

The annual business survey, the largest of its kind, shows that 5.4 days a year are now lost to sickness per person in the region – down from 6.2 days a year previously. It means that the region is now only slightly above the UK average, where 5.3 days a year are lost to sickness per person.

The North West has climbed up the rankings from bottom place to seventh in the UK – but this still means only the East Midlands, Scotland and Wales lose more days per person to sickness. At the same time, the region’s absence rate has decreased from 2.7% to 2.4% - again placing it above the national average of 2.3%.

Across the UK, long-term absence has increased for the second year in a row. At the same time, four in ten firms (40%) say that an under pressure NHS is struggling to meet their need to get employees back to work.

There has been a further fall in employers’ confidence in GPs to improve return to work rates, while perceptions of the effectiveness of the ‘fit note’ system continues to deteriorate. At the same time, the burden of referring employees to the new Fit for Work service is shifting to employers.

The report warns that an over-stretched NHS is proving unable to support the working age population by providing timely and effective rehabilitation and medical treatment. As a result, it is urging radical action to tackle the UK’s chronic sickness absence problem and to encourage more employers to pay for private treatment for employees to ease the burden on the NHS.

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

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

Steve Warren, North West Region Director at EEF, says: “It’s interesting to see how our region compares for sickness rates, but there is a serious concern here. We shouldn’t lose sight of the fact that keeping people fit and healthy, while enabling a speedy return to work from absence, is essential to economic growth.

“However, this report shows long-term absence on the increase and an under-pressure NHS that is struggling to deal with the issue. With an ageing population this situation is only going to get worse - radical action is required.

“Government must now use 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, employers and employees.”

In response to the report and ahead of a White Paper on workforce health due to be published this summer, 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 that 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.