Mel Stride, secretary of state for work and pensions, said the proposed changes to the work capability assessment — a test used to identify people who qualify for a higher rate of benefits without any job-search requirements — would help individuals, while also boosting the economy and labour market.

“Health assessments haven’t been reviewed in more than a decade and don’t reflect the realities of the world of work today,” he said, adding that the reforms would “mean that many of those currently excluded from the labour market can realise their ambition of working”.

The government argues that a post-coronavirus pandemic embrace of remote working and other forms of workplace flexibility means that many people who would previously have been unable to hold down a job could now work from home, or for an employer who accommodated their needs.

Under the proposals published for consultation, people who struggled with mobility, social engagement or bowel and bladder control could in future be expected to look for work.

Ministers are also considering scrapping a provision that exempts people from work-search requirements if there would be a “substantial risk to mental or physical health”. Stride said this had been intended as a safety net but was now being used far more widely, usually by people with mental conditions, who might be better served by tailored help to enter work.

However, unions and think-tanks said the proposals were a thinly veiled move to cut the welfare bill that would leave vulnerable people in hardship without any significant boost to the number employed.

“Reducing the number of people who can claim sickness benefits is not a magical solution that will make people well enough for work. These reforms will take away much needed financial support,” said Vicki Nash, head of policy, campaigns and public affairs at the mental health charity Mind.

Government spending on incapacity benefits has risen from £15.9bn in 2013-14 to £25.9bn this year, a real-terms increase of 62 per cent, and is set to climb to £29.3bn by 2027-28 on current projections. The number of people receiving the highest award, with no work-related requirements, has risen by 30 per cent to more than 2.3mn over the past three years.

“This is a blatant attempt to cut costs rather than support people at work,” said Kate Bell, assistant general secretary of the Trades Union Congress. She argued that disabled workers still did not have enough protection under UK law to secure the flexibility they needed from employers.

Sam Ray-Chaudhuri, a research economist at the Institute for Fiscal Studies, said previous reforms aimed at cutting the cost of disability benefits had often failed to deliver the intended savings. Because the government planned to phase out the work capability assessment entirely over time, the changes proposed would “at most deliver a short-run saving before becoming irrelevant”, he said.

Tom Pollard, head of social policy at the New Economics Foundation, a think-tank, said the government was using conditionality “to push people into support schemes, as well as paying them a lower rate of benefit” but that genuine engagement with employment services would only occur “if people feel safe, secure and trusting of the support on offer”.

“This is more stick than carrot,” said Tony Wilson, director of the Institute for Employment Studies, adding that it was counterproductive for the government to link eligibility for benefits with employment support — as it led people to see jobcentres as a hostile environment.

The consultation ends in eight weeks — ahead of the government’s Budget on November 22. Policy changes would not come into effect until 2025 at the earliest.

This story originally appeared on: Financial Times - Author:Delphine Strauss

Minor illnesses were the main reason for people to take sickness absence, although Covid-19 was still a big factor, the Office for National Statistics said. The ONS also noted that respiratory conditions had overtaken mental health problems to become the fourth most common reason for sickness.

The Bank of England’s Monetary Policy Committee, which sets interest rates, thinks that jump is one reason why labour shortages, and the accompanying pressures on wages, risk making high inflation more persistent in the UK than elsewhere.

The number of people in work who have a long-term health condition has also risen. Wednesday’s figures show that the rate of sickness absence for this group rose to 4.9 per cent in 2022 — the highest level since 2008 — compared with an absence rate of 1.5 per cent among other workers.

Paul Nowak, general secretary of the Trades Union Congress, the umbrella body for the UK labour movement, said even this data was bound to understate the true level of sickness because many low-paid workers were not eligible for sick pay and others could not get by on the “miserly” rate of statutory sick pay.

This story originally appeared on: Financial Times - Author:Delphine Strauss

Since then, he has seen NHS waiting lists lengthen and more colleagues leaving for better terms of work in Australia.

This story originally appeared on: Financial Times - Author:Delphine Strauss

Britain avoided big job losses at the height of the pandemic but, since Covid-19 lockdowns lifted, it has seen an exodus of older workers from the labour force. The number of people of working age who are economically inactive — neither working nor looking for a job — has risen by more than 630,000 since 2019. And, in contrast with other countries, there has been no sign of them returning — even as inflation puts new strains on household finances.

On current trends, the UK will soon be the only country in the OECD where the workforce remains smaller than it was before the pandemic. At present, it is behind only Latvia and Switzerland.

This story originally appeared on: Financial Times - Author:Delphine Strauss

A sharp post-pandemic rise in economic inactivity — people who are neither working nor looking for work — is an acute concern for UK policymakers, because it has added strain to a tight labour market where many employers are struggling to recruit.

The Bank of England fears this will make high inflation persist for longer if employers end up paying higher wages and raising prices further as a result of tightening Labour supply. The bank will on Thursday announce its latest decision on interest rates alongside new forecasts for the UK economy.

“It’s clear there are lots of people who are not choosing to leave work but feel they have to,” said Andrew Phillips, a researcher at Demos, whose study involved interviews with former office workers and public sector staff, who had struggled with health conditions ranging from serious mental illnesses to arthritis, cardiovascular problems or menopausal symptoms.

Demos called for the government to work with employers to boost access to occupational health services, tackle ageist recruitment practices and redesign jobs to better accommodate workers’ needs.

Other labour market experts have said that the government should put less energy into hounding benefits claimants to work more, and more effort into redesigning employment support services to help older people who have left work but do not claim benefits.

Making it easier to work with long-term health conditions will be important, regardless of the reason people left their jobs initially, according to Tony Wilson, director of the Institute for Employment Studies, a consultancy, who noted that people with health problems might persuade an existing employer to give them the flexibility they need, but not a new one.

“One in five people has a work-limiting disability or health condition,” he told a committee of MPs last week. “Once you are out of work and you have a health condition; it is blooming hard to get back in.”

This story originally appeared on: Financial Times - Author:Delphine Strauss