Government must invest in the nation's health to help the economy
While the Spring Budget may lack the high drama accompanying November’s Autumn Statement, it would be a mistake to underestimate the challenges facing the Chancellor.
Alongside the legacy of the pandemic and the cost of living crisis, he urgently needs to find a way to get the UK’s stuttering economy moving.
Central to this – as the Chancellor pointed out in his Bloomberg speech in January – is getting more people currently not participating in the labour market into work. 6.6 million working age people were out of the labour market (excluding students) by the end of last year. Over a third (37%) cite a long term health condition as the reason for this.
Therefore, plans to boost labour market participation are set to feature prominently in Wednesday’s Budget along with a Health and Disability white paper. Success requires a dual approach: helping people get back to work and stopping them from becoming sick or falling out of work in the first place. There are some obvious quick wins.
One such quick win is to increase access to employment support for anyone – whether on benefits or not – who wants to work. This should appeal to nearly 1 in 4 of those currently out of work due to long term sickness who say they want to return to work. Awareness of existing programmes like the Access to Work scheme – which provides practical support for disabled people and those with physical or mental health conditions – can also be raised through employer networks, GPs and charities.
The cost of living crisis is not just squeezing people’s living standards; it also has significant health costs, particularly on people’s mental health. More support for those struggling to afford essentials – such as extending the energy price cap and ensuring housing benefit for private renters keeps pace with rent rises – can prevent their health from deteriorating and keep them at work. After suffering deep cuts, investing in the public health grant – paid to local authorities to fund services that prevent ill health from arising in the first place – is also important.
But there is a limit to how far these quick wins can go. More significant, longer-term policy change is needed to address worsening physical and mental health across the working-age population.
The Work Capability Assessment used to determine eligibility for benefits for those with disabilities and health conditions that limit their ability to work has been fraught with problems. Careful thought should be given to a replacement ensuring the right financial support and help to return to work is given. This is a process that will take years rather than months.
The cost of living crisis is not just squeezing people’s living standards; it also has significant health costs
Boosting future labour force participation also means keeping people healthy in the first place. Businesses must do more to ensure job design and working conditions support good health and support sick staff to remain employed. Policymakers need to reform outdated policies. For instance, the lack of coverage and generosity of Statutory Sick Pay was highlighted through the pandemic but nothing has been done to address this. That’s why government should commit to an industry-led taskforce focused on how businesses and government can support a healthy workforce.
Failing to act also has wider policy implications. For example, worsening health could undermine the case for speeding up increases in the State Pension age, with significant knock-on effects on welfare spending and tax revenues.
Successive crises have frayed the nation’s health as well as its finances. There is no hiding a difficult fiscal outlook, but this makes it essential to invest in the nation’s health, both to improve people’s health and to deliver economic growth.
David Finch is Assistant Director of the Health Foundation
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