Tackling working-age health and employment: what should the next government prioritise?

Labour has announced that working-age health will be a core part of its employment policy, if elected. Areas of focus include a localised approach to employment and health support and support for young people. 

Recognition of the importance of the health of working-age adults is a welcome dose of realism. The number of working-age people who are neither in work nor seeking work (described as ‘economically inactive’) due to ill health is at the highest levels on record – at 2.8 million. At the same time spending on benefits related to health and disability is projected to rise by £22 billion a year in real terms between 2023/24 and 2028/29. 

This increase in economic inactivity and benefit spend mean that the health of the working-age population will be a key issue for the next government. And it is an issue that isn’t going away any time soon – our projections suggest an extra 0.7 million people of working age will be living with major illness by 2040 in England alone.

What are Labour proposing?

Elements of Labour’s plans are in line with previous Health Foundation asks in this area. Adopting a localised approach to employment support is a must – given local variation in health challenges and barriers to work, and a need to join up provision of local services to tackle those barriers. 

The greater focus on supporting people into work is also a sensible shift, although it remains unclear as to how this would sit with the current government’s planned reforms in this area. The Spring Budget 2023 announced relatively small-scale local pilots and schemes (such as Workwell Pilots) some of which have since been slightly expanded, but it isn’t clear whether these would be swept aside or incorporated by a potential Labour government in their localised approach. 

The other reforms being brought in by the current government, but not mentioned in Labour’s plan, are to Universal Credit. The proposed change to the qualifying criteria for people with work-limiting health conditions would limit who can receive higher levels of financial support. Given these reforms are expected to reduce entitlement to that higher level of support for 424,000 people by 2028/29 but only increase employment by 15,400 people they are a clear exercise in short-term cost reduction. Such an approach risks being counter-productive in the longer term by placing people with health conditions at risk of poverty and a downward spiral of worsening health and lower income. 

Three key issues for a new government

A new government will need to keep the following three issues in mind if they are to tackle the working-age health and employment challenge.

First, this is a complicated and difficult area of policy that will take time to get right. Reforms to disability benefits have failed to achieve their intended outcomes – whether reducing overall spend (such as introduction of Personal Independence Payments) or finding and supporting people with health conditions into work (such as the Work Capability Assessment). While there has been some progress their remains a persistent employment gap between those with work-limiting conditions and those without. Any significant reforms in this area will need to be properly trialled and tested, involving health professionals and people with long-term health conditions and disabilities.

Second, this isn’t about a small group of older people who are out of work. There is a need to keep people of all ages in good health and in-work in the first place. That’s why related Labour plans to reform Statutory Sick Pay are long overdue but unlikely to be extensive enough, and can’t be implemented in isolation – employers have a key role in supporting their employees job redesign and working conditions. There are now 3.7 million people of working age in work with a work-limiting health condition, almost as many as the number of people not working with a work-limiting health condition. People aged 16–34 years old are now as likely to report a work-limiting condition as people aged 45–54 years old a decade ago. This rise in work-limiting conditions is being driven by sharp increases in mental ill health, particularly among younger workers. 

Third, there are clear areas where action can be taken sooner but short-term initiatives must be the first steps in a coherent longer-term strategy. Early measures should include opening up employment programmes and other practical support for people looking for work and doing more of what already works, such as further expansion of Individual Placement Support, which offers tailored employment support for people with mental health conditions.

The need for these more immediate remedies reflect a long-term failure to protect the health of the working-age population. To support the new government in developing a long-term policy to tackle working-age health, we’ll be publishing interim conclusions from our Commission for Healthier Working Lives ahead of the first Spending Review of the next government. This will be followed by a final report in Spring 2025, which will set out a fuller policy programme to support a thriving workforce.

Good health is our most precious asset – and a healthy workforce is the backbone of any thriving economy. Our health is driven by a range of factors that sit outside of the health care system, including good work, but also secure housing and adequate incomes. Ensuring these building blocks of health are in place will require an incoming government to set a bold, ambitious goal to improve the nation's health over the next decade and beyond, supported by a cross-government strategy to drive action across Whitehall.