Sickness Absence

Thursday 17th February 2011 Written Statements

[The Minister of State, Department for Work and Pensions (Chris Grayling)]

I wish to inform the House that, today, the Department for Work and Pensions, together with the Department for Business, Innovation and Skills will be launching an independent review of sickness absence in Great Britain.

It is estimated that around 300,000 people (approximately 1% of the employed population) move on to sickness-related benefits (incapacity benefit or employment and support allowance) each year. These individuals make up a sizeable proportion of long-term sickness absences and around half of the total flow on to ESA every year. They constitute a significant cost to taxpayers, in addition to the costs incurred by employers covering absences, and the opportunity costs to the economy in missing out on the contribution of these individuals.

In conjunction with the Minister responsible for employment relations, consumer and postal affairs, the Under-Secretary of State for Business, Innovation and Skills, my hon. Friend the Member for Kingston and Surbiton (Mr Davey), I have invited Dame Carol Black, the national director for health and work, and David Frost, current director general of the British Chambers of Commerce, to co-chair an independent review of sickness absence to establish how we can mitigate the economic losses, as well providing effective support for those who would benefit from our help. The report will be jointly sponsored by the Department for Business, Innovation and Skills and the Department for Work and Pensions. The review will explore how the current system could be changed to help more people stay in work, thereby reducing costs. In addition, the review will examine whether the balance of these costs are appropriately shared and make recommendations for reform.

The coalition Government are committed to reducing the burden of regulation of business in line with the objectives of the growth agenda. The sickness absence review will be conducted in this context, as well as informing the work of the existing employment law review. As such, the sickness absence review will complement the Government’s ongoing welfare reform agenda.