From Review to reality

There’s always a danger that official reviews end up generating a lot of talk and symbolic gestures, but don’t set out meaningful steps for change. That’s the challenge faced by the just-published review by Charlie Mayfield into ill-health and disability and the workplace, ‘Keep Britain Working’. But it’s a challenge that the Review meets head-on, even if some question marks remain. In this blog post, we delve into the review, setting out its key strengths as well as the areas where we believe further action is needed.

The review rightly focused on an important long-term problem – but the UK labour market is not in crisis

First of all, the headlines about Britain ‘sliding into economic crisis’ are perhaps unhelpful. There are many good reasons to improve disabled people’s inclusion in the labour market: this would improve living standards for families across Britain, curb spending on incapacity benefits, and contribute to economic growth. But the starting point on overall economic inactivity in the UK is not one of crisis. The UK’s employment rate is near historic highs; spending on non-pensioner welfare is similar to the level in the late 2000s; and at least one-in-five working-age adults have been classed as economically inactive across recent history.

This isn’t to downplay the issues – ever since the 1980s we have significant numbers of people out of work due to long-term sickness, and plausibly the UK is doing worse on disability employment than other countries. And the UK does face some headwinds when it comes to disabled people’s inclusion in the labour market, including our ageing population and the fast-rising prevalence of disability since the Covid-19 pandemic. We should aim higher and learn from countries who are doing things better from us, such as the Netherlands. But overstating the scale of the problem is an unhelpful starting point when designing and implementing policy solutions.

A blueprint for action

The review is a serious and impressive diagnosis of the issues around employment and ill-health. Its diagnosis of the issues relating to ill-health and disability in the workplace is insightful: a lack of effective and consistent support for both employers and employees; the structural exclusion of disabled people from the workplace; and the need to re-humanise the workplace in the face of a ‘culture of fear’. And the report is refreshingly clear that if we want to boost disabled people’s inclusion in the labour market, this will have to involve action from employers as well as the state.

And given a lack of evidence about exactly what best practice looks like when it comes to recruiting and retaining staff with health conditions and disabilities, the review’s recommended phased approach – taking concrete actions in the short-term to build up the evidence, followed by bolder actions in the medium-term to tackle the problem more deeply – is very sensible.

The short-term actions take the form of a three-year ‘Vanguard Phase’ that will have three deliverables:

1. Create a certified standard of a ‘Healthy Working Lifecycle’, which means figuring out what works, and building a consensus around it. This involves both better case management (supporting a particular person who develops a health problem at work), and also trying to create more inclusive workplaces that work better for everyone;
2. Work out a way of delivering this support in practice, via a ‘multi-provider marketplace’ – that is, a lot of different organisations working together, rather than a single organisation doing everything;
3. Establish a ‘Workplace Health Intelligence Unit’ (WHIU) to build the evidence base to support all of this.

In some ways, the Vanguard Phase is a recognition that the nine-month review was not long, or well-resourced, enough to build this evidence base – so this is an excellent way of accepting this reality while pushing things forward. And it is testament to the quality of the Review that hundreds of employers are already willing to volunteer to be part of the Vanguard Phase. But it will be essential that the Vanguard Phase itself is properly resourced and the new WHIU is quickly created to support it. The government should clarify whether it is committing to meet the three key asks of it from the Review, and if so, confirm how they will be resourced.

But not job done: There is a need to design employer incentives that work

As the Review makes clear, this is only a precursor to the more ambitious next phase of action by the end of the current Spending Review period in 2028-29 – which crucially must involve employer incentives that work. As is set out in Charlie Mayfield’s foreword:

“…government must enable and incentivise employers and employees to act. That begins with better data: today it is weak; by the end of this Spending Review, it must be strong. Robust evidence will show that shared responsibility delivers the best outcomes – keeping people in work, improving health, increasing inclusion and saving the state billions. With that evidence, government must deploy a full range of targeted incentives – from procurement, rebates and the tax system, through to reforms to welfare and dispute resolution – to drive and sustain change.”

Indeed, rewiring the incentive system is one of the three decisive steps that the review recommends (§33). This is a welcome recommendation – but the real challenge is in knowing what form these incentives should take.

The Vanguard phase must include work to understand the optimal design of systemic incentives. Crucially, we must face-up to one of the key reasons why employers are doing less than they should at present: often, it is not in employers’ best economic interests to act, because some of the benefits of having more disabled people in the workplace are felt by the state (e.g. via reduced incapacity benefit spending) rather than employers themselves. And while the Review does run through a quick list of possible incentives (§132-139), it doesn’t discuss them in detail, or create a plan for how the WHIU will get better evidence on them. Given that discussion for the next Spending Review will begin in 2027, it is not good enough to wait until the end of the Vanguard Phase before thinking about these issues.

As David Finch from the Health Foundation put it, this whole agenda “will only succeed if the government puts the right incentives in place to make a real difference.” But given that the most detailed plans for action are in the Report are focused on other issues , there’s a risk that this might get slightly lost – particularly as getting these incentives right is likely to be tricky. Proposals on incentives too often stay at the level of generalities rather than deliverable policies, and there’s a very real chance that introducing poorly designed incentives could in fact make things worse (as we set out in our recent report, Opening Doors), because of the risks of wasting money; of negative economic impacts; of increasing stigma; and of worsening a culture of compliance. But overcoming these risks is important, especially if we are to encourage more action among employers who are currently doing the least. Working with the most willing and able employers via the Vanguard Phase is an important first step – but we should also aim to change practices among employers who are currently unwilling (or unable) to support their sick and disabled staff, and this will involve carefully designed incentives backed up with proper enforcement.

And a key trade off that is not well-explored in the Mayfield review is that policies that incentivise employers to retain their existing staff (the main focus of the review) may in fact disincentivise employers from taking on new disabled staff. We think more consideration should be given to policies that would make it easier for employers to ‘take a risk’ and employ disabled staff in the first place, including those with limited employment history such as young people or those currently claiming incapacity benefits.

Our initial recommendations in Opening Doors are hopefully a useful starting point. Either way, it is clear that the WHIU, think-tanks, academics, employer organisations, disabled people’s organisations and other stakeholders need to put more attention on this right from the start, and it is important that this is given sufficient attention by the WHIU and Government more broadly.

The UK labour market is not in crisis; instead, we should accept that we face a long-running problem with disability inclusion, for which successive governments have often failed to grasp the nettle. The importance of this problem will only grow as the population ages. The Mayfield Review is hopefully the start of a serious effort to tackle the problem. But it is only a start, and the Government must work hard to turn the recommendations into clear outcomes by moving quickly from the initial Vanguard phase to full deployment, and by working to design effective employer incentives that will really make a difference.