The new workforce and health rationales for a bigger Occupational Health sector 

Occupational Health (OH) policy isn’t a topic you traditionally hear politicians discuss. Jointly overseen by the health and welfare departments, it can often struggle to gain traction against more headline-grabbing health and welfare system reforms. This too is reflected in low levels of awareness for OH among politicians, the public, and much of the business community.  

However, the rise of workforce pressures and inflation has seen a renewed focus on OH. Expanding labour supply is one of the most obvious and politically appealing levers for the government to pull to tackle high inflation - the Prime Minister’s overriding priority.  

The Spring Budget announced a package of new measures to grow the workforce, spanning from action in childcare to enable more parents of young children to work, through to skills and expanded employment support for people out of work. Another area of focus was health. The COVID-linked increase in the number of economically inactive working-age people has still not unwound, and policymakers have been grappling with how to turn this around.  

Occupational Health has an important part to play in this, both helping to find ways for people to manage working with health conditions, and helping employees to prevent problems from escalating into more debilitating issues. Last month more was said about the potential steps to take in this area, building on the last significant policy document, Health is Everyone’s Business, published for consultation in 2019.  

What the Government has set out  

Two new consultations have now been published. The first covers tax incentives for OH, looking at options to expand the current Benefit in Kind exemption for medical benefits.  

The second looks at steps that the Government and employers could take to increase OH coverage. It puts forward voluntary proposals intended as a baseline for quality provision by employers; compares the UK model with the different versions of legally mandated systems in France, Poland and Germany; and proposes measures to grow the OH workforce.   

Both close for responses on 12 October, giving time to consider responses potentially as early as the next Autumn Statement, expected in late November.  

The spectrum of outcomes  

The Government response to these consultations is likely to fall along a spectrum. While there is strong in principle support for action there are significant constraints to manage – with a tight fiscal position and limited time until the next election.  

  1. The first scenario for the Government would be minimal, targeted action, with limited fiscal implications. This could include things like new kitemarking standards for employers, trying to create fresh incentives for them to voluntarily raise their game. As relatively straightforward, low-cost options these are very likely.  
  1. The second would involve more substantive action. This could include bringing forward new tax incentives for employers, direct support to boost the OH workforce, and targeted schemes for SMEs to support their delivery of OH. These will be on the table, but fiscal constraints are likely to limit options.  
  1. Lastly, Government could choose to pursue wholesale reform of the UK’s OH model. This would mean increasing obligations on employers, requiring further consultation and legislation to implement. In the short-term, the time needed to consult and legislate, and the impact on businesses in a challenging economy, mean this is unlikely. 

Shaping outcomes – and what comes next 

For business there are several areas to consider:  

  1. The likely limited nature of the initial government response means, for those looking for immediate action, there is a benefit to engaging early to shape which areas are prioritised and what new standards look like. One of the arguments for OH spending is that there will be an economic return on investment, but the OBR will demand a high standard of evidence before they forecast any benefits. Arguments which are backed up with a strong business case will have a significantly better chance of success.  
  1. Government is also likely to think about measures to promote healthier workforces in the round, so thinking need not be limited strictly to ‘Occupational Health’. Measures like health assessments and health benefits could also be on the table if the case is made for them.  
  1. Whoever wins the next election, OH is likely to remain an area of active policy development, with Labour also supportive of both the workforce and health prevention agendas. Post-election this means probable further support for the expansion of provision both to drive demand from business and to increase the capacity of supply, though spending will remain constrained. 
  1. One thing a Labour government in particular would be more likely to countenance is a compulsory system. This is an area that may look more palatable as an option once business conditions improve, balancing the additional costs it would mean for employers. 

Ultimately, the question for the sector is less ‘will the Government do something to support the sector’ – and more ‘how far will it go and how quickly’. An incremental approach over the coming years, rather than a big bang is most likely. This means big opportunities for established OH and health players, but also important moments to shape the policy direction.  

Verity Ryan and James Hedgeland co-lead Flint’s health practice, bringing together experience from the private sector, and government to help firms navigate where commercial and government interests meet. To discuss the implications of policy in this area, and how outcomes can be influenced, contact us here.  

Flint Insight

Subscribe to receive analysis and insight from Flint’s expert team on the latest political, policy and regulatory developments.
© Flint Global 2024 | Privacy Policy
Website by Saifee Creations