A growing number of British business leaders are calling on the government to tackle rising workforce ill health, citing employee absences as a key factor hindering growth. A survey by the Good Growth Foundation think tank found that 78% of companies want ministers to improve workers’ mental and physical health to boost labor market participation and support economic stability.
The appeal comes as the Treasury considers welfare cuts to meet fiscal targets. Praful Nargund, the foundation’s director, emphasized the connection between workforce health and economic growth, stating, “The government must address workforce health to improve economic stability and growth prospects.”
Out of 1,200 employers surveyed, 35% reported that staff absences are disrupting operations, while nearly a third cited ongoing hiring difficulties. Additionally, 32% highlighted challenges in retaining employees, contributing to the UK’s workforce inactivity rate of 21.5%—1.2 percentage points higher than pre-pandemic levels.
Official data shows that approximately 2.8 million people are not seeking work due to long-term illness. Nargund stressed the importance of aligning back-to-work initiatives with effective health support, noting, “We have a workforce inactivity crisis… many people want to work but lack the assistance and adjustments they need.”
Although the survey did not specify the measures businesses support, a previous poll by the foundation suggested solutions such as reducing NHS waiting lists, enhancing preventative healthcare, and introducing a potential tax on junk food. Liz Kendall, the work and pensions secretary, plans to reinvest up to £5 billion in welfare savings into back-to-work schemes to assist those with chronic illnesses.
Economists caution that Chancellor Rachel Reeves’s initial budget headroom of £9.9 billion may shrink due to rising borrowing costs and a weaker growth outlook. Meanwhile, the government continues to grapple with the UK’s elevated inactivity rate, which contrasts with other countries’ post-pandemic employment recoveries. This issue is largely attributed to increased mental health challenges among young adults and the reluctance of older workers to return to the labor force.
Beyond workforce health, over half of the survey’s respondents identified reestablishing or expanding access to the European Union market as their primary request from the government. An additional 20% emphasized the importance of both EU and US market access, reflecting a broader business consensus that global trade connections, combined with a healthier workforce, are essential for sustaining long-term economic growth.
