Keir Starmer’s government has been urged to create a new “national occupational health service” funded by a £2bn levy on Britain’s biggest employers to fix a worklessness crisis driven by ill-health.
As Labour battles to bring down record levels of long-term sickness keeping millions of people out of work, the Fabian Society argued that a universal at-work health service could help to keep more people in a job.
Funded by the introduction of a health element to the incoming growth and skills levy – which is due to replace the apprenticeship levy – the system would iron out patchwork levels of inconsistent job support now provided by employers.
In a new report, the thinktank argued that the largest tenth of businesses should pay to help fund occupational health services for employers of all sizes, which would be delivered by private providers.
Ministers are pushing to drive up employment and tackle soaring levels of economic inactivity – when working-age adults are neither in a job or looking for one.
More than 9 million people aged between 16 and 64 are economically inactive. For almost 3 million, the main reason is long-term sickness, in a crisis driven by a surge in mental health issues, particularly for young adults.
Sir Charlie Mayfield, the former boss of John Lewis, has been tasked with drawing up options as part of a landmark review on behalf of government, which is expected to deliver its final report this autumn.
Mayfield said he welcomed the Fabian Society report. “Their diagnosis of the situation, and the impact it is having, resonates and reinforces many of the findings of the Keep Britain Working review,” he added.
However, any proposals leaning on employers for a bigger financial contribution could risk provoking a backlash from bosses as Rachel Reeves comes under pressure before her autumn budget.
Businesses have warned the chancellor against announcing further tax increases on 26 November, amid growing concerns over the strength of the economy and as tax rises in her first autumn budget hit jobs and growth.
However, the report from the Fabian Society – titled “Nye’s Lost Legacy” after Labour’s transformative 1945 health secretary Aneurin Bevan, who spearheaded the creation of the NHS – said a new system would be positive for employers and the economy at large.
In a study backed by the Unison trade union, it said that redoubling efforts to keep workers in a job who could otherwise be at risk of dropping out of the workforce due to ill-health would be the best way to tackle economic inactivity.
Christina McAnea, the general secretary of Unison, said: “Establishing a national system to boost the economy is a no-brainer. It’s a win for workers, their employers and the UK economy as a whole.”
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Earlier this year, the accountancy firm PwC reached similar conclusions after surveying 4,000 workers and businesses, in a study calling for firms and the government to develop a stronger occupation health system.
Support is designed to help prevent health problems at work and support workers who are ill. But only 45% of UK workers have access to occupational health through their employer, according to the report.
Sasjkia Otto, author of the report and a Fabian Society senior researcher, said the government had a “generational opportunity” to boost occupational health support. “Many employers spend a lot of money trying to keep their workforce healthy. But the UK’s failing occupational health system means they do not see return on their investment.”
A government spokesperson said: “We are taking action to get Britain back to health and into work by giving people the skills and opportunities they need as part of our Plan for Change.
“Our record £3.8bn of employment support comes alongside our plan to get Britain working by delivering a Youth Guarantee to get young people into training or work, tackling inactivity, and overhauling jobcentres.”
