Workplace health benefits everyone

The Government’s consultation on tax-relief for health interventions is welcome but should have gone much further says Patrick Watt, director, corporate, Bupa Health Funding

Patrick Watt, director, corporate, Bupa Health Funding
<p class=”inline_caption”>Patrick Watt, director, corporate, Bupa Health Funding</p>

Britain is in a poor state of workplace health. Over 140 million working days are lost per year to employee sick days costing companies £9 billion a year. It is likely that even more productivity is lost through presenteeism – people showing up, but not really being fit for work.

The total annual economic costs of sickness absence and worklessness associated with ill-health are estimated by the Government’s workplace health adviser, Dame Carol Black, to be over £100 billion. In addition, 300,000 people leave the workforce every year and end up on health-related benefits.

As well as losing productivity this costs the Government in the form of health-related benefits and lost income tax. It is also a waste of talent and opportunity at a time when Britain is readying for recovery.

Many businesses are increasingly recognising the value of workforce health. They understand its importance and some are already benefitting from it. They would like to provide more support but current barriers, particularly taxes, are artificially limiting provision. This is particularly the case for small and medium-sized enterprises (SMEs) – enterprises with fewer than 250 employees.

Previous research by Bupa shows that the workplace can be an effective location to support and treat people in poor health, prevent future illness and promote good health through high quality work.

The Chancellor’s announcement in the budget of some tax relief on health-related interventions is therefore welcome. But, at the same time, it also feel likes a missed opportunity. At Bupa, we’d like to see him go even further and remove all tax disincentives to help promote all workplace-health improvement schemes, particularly in smaller companies.

The exact details of the Chancellor’s proposals are still hazy, but we are concerned that it could hide an unintended problem. Mr Osborne’s intention to adopt a low financial limit may actually create a new disincentive through increased compliance costs, making schemes more costly for employers to create and monitor. That’s because companies would need to be able to identify cases qualifying for this new exemption and monitor spending on a case-by-case basis to ensure that the tax-free limit is not breached and they find themselves in trouble with HMRC.

The research in our report, Getting Britain Fit for the Recovery found that if the current taxes on workplace health were removed, SMEs would see productivity gains of £282m a year while larger business would also see significant gains totaling £160m.

This overall productivity gain of £443m per year for UK business would save the economy far more money than the tax it brings in to the Treasury.

It’s not just physical illness that can take its toll. Bupa Business Fit for example focuses on mental health conditions, such as anxiety, stress and depression, as well as muscular and joint disorders and has been specifically designed to provide early, effective and high-quality interventions that may help reduce absences resulting from these conditions.

Although providing high quality healthcare can cost employers as little as £10 per month per employee or approximately 0.5 per cent of payroll, its treatment as a benefit in kind by the tax system can make such schemes seem unattractive to employees, particularly those on lower wages.

Based on current trends the workforce of the future will be older, more obese, living with more long-term conditions, leading less healthy lives and with more caring responsibilities for others.

At any one time, one worker in six will be experiencing mental distress, depression or problems relating to stress and nearly 75 per cent of GPs cite back pain amongst the three most common conditions for which they issue sick notes for seven days or more.

There is now an opportunity for the Government to respond and improve the health of the workforce, boost the economy and forge a partnership with business for a healthier workforce for the future.

Encouraging firms of all sizes to offer wellness and health prevention schemes to their people is a win-win for everyone: it benefits individuals’ health, companies’ profits, and the country’s finances.

We will be looking for every opportunity to engage in the consultation process and highlight these long-term benefits to the Government.