giving and taking note

Report: 4.1bn boost to UK from sick pay reform

A new report by WPI Economics predicts that sick pay reforms would result in a 4.1bn boost to UK businesses, Government and the wider economy, as it lays out the benefits that could be realised by reforming the UK’s sick pay policy.

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revealed by Angela Rayner just this morning at TUC conference: “The UK has the lowest level of statutory sick pay in the OECD. The next Labour government will strengthen and increase statutory sick pay, make it available all workers by removing the lower earnings limit which cuts out those on low wages, and removing the waiting period which currently means workers can only access it from day four of sickness.”

 

This is fantastic news, as it represents the three key demands the Safe Sick Pay campaign has been calling for. Getting this on the Labour agenda is a big win for all of the organisations and individuals that have fought hard for sick pay reform. Please retweet us here

 

But we can’t rest easy - it is not yet clear for example what either party's policy position will be on the total rate of income replacement, to replace the currently inadequate rate of just £109 per week Statutory Sick Pay.

 

The current Conservative Government has not yet backed these reforms but there is positive support from a range of Conservative Parliamentary champions. We have recently met Treasury advisers on the subject of sick pay and submitted a policy briefing. 

 

We need to ensure that sick pay reforms happen as soon as possible, to ensure that no worker is left ill, under huge financial pressure and facing impossible choices because of an inadequate sick pay regime that further punishes the lowest paid workers in our society. To that end, the Safe Sick Pay campaign will keep pushing for these vital reforms. If you’d like to be involved please get in touch.

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June 2023

 

Let’s fix the UK’s broken sick pay system

Dear Secretary of State

We welcome the Government's efforts to create a strong and thriving economy in response to the Covid-19 pandemic and cost-of-living crisis. Good work improves health and wellbeing across people's lives and protects against social exclusion. 

But without a healthy workforce who are supported when they get ill, it will be difficult to achieve the aims of the recent Back to Work budget. Nearly two million people like cleaners, carers and parents juggling childcare, or multiple jobs, are slipping through the cracks and get no sick pay at all. 

An estimated 6 million people get just £109 a week in statutory sick pay, and lose three days’ pay if ill. Workers are encouraged to either leave employment or go back to work before they are fully better. The strain of coping with illness coupled with the financial hit can also exacerbate mental health problems and can tip people into a mental health crisis. The result is widening health inequalities. 

An increasing number of people in the UK population are living with multiple long-term conditions, such as chronic pain, diabetes or mental health problems. Sick pay should play a role in supporting people with MLTCs to take time away from work when they need it. Fixing the UK’s broken sick pay system would improve the chances of disabled people and those with long-term health conditions to stay in work. This would protect our NHS and benefit the wider economy. Ultimately, it would save lives. 

Our sick pay system lags behind the rest of Europe. To come into line with international standards, It would benefit from the following reforms:

  • Abolishing the earnings threshold for Statutory Sick Pay
  • Making Statutory Sick Pay payable from the first day of sickness
  • Increasing Statutory Sick Pay to be in line with a worker’s wages up to the real living wage
  • Developing a flexible model for Statutory Sick Pay which allows for a phased return to work and income protection for workers

Enacting these reforms would safeguard the health of workers and the wider population and help people lead happy, healthy productive working lives for longer, a shared goal for all of us. It would also benefit the wider economy.

We welcome the opportunity to work with you and the respective teams in the Department of Health and Social Care and Department for Work and Pensions to make the necessary reforms a reality. 

 

Yours Sincerely

 

Amanda Walters, Director, Safe Sick Pay campaign

Andy Bell, CEO, Centre for Mental Health

Barbara Reichwein, Programme Director, Impact on Urban Health

Conor D'Arcy, Interim CEO, Money and Mental Health Policy Institute

Diane Lightfoot, CEO, Business Disability Forum

Dr Jim McManus, President of the Association of Directors of Public Health.

Jo Bibby, Director of Health at the Health Foundation

Mark Hodgkinson, Chief Executive, Scope

Mark Koziol, Chairman, Pharmacists’ Defence Association

Rachel Kirby-Rider, Chief Executive, Young Lives vs Cancer

Dr Ruth Owen OBE, CEO, Leonard Cheshire Disability

Dr Sarah Hughes, CEO, MIND

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A new report by WPI Economics predicts that sick pay reforms would result in a 4.1bn boost to UK businesses, Government and the wider economy, as it lays out the benefits that could be realised by reforming the UK’s sick pay policy. MPs, Peers, FTSE100 company Legal and General Group, Unison Trade union, cancer and mental health charities will join the launch of the report in Parliament on Tuesday.

  • The UK would benefit from a boost of up to £4.1 billion if every worker relying on Statutory Sick Pay (SSP) received a higher rate of employer sick pay from day one. [1]
  • Workers on SSP receive as little as £1.10 an hour in the first week and less than £3 an hour thereafter. One in three workers on sick pay are living in poverty. 
  • MPs, health experts and business leaders call on the Government to take actions on sick pay findings to ‘safeguard the future health and prosperity of our nation’ amidst worsening UK workforce health. 

 

A report released today by WPI Economics, commissioned by the Centre for Progressive Change, finds that reforming sick pay could reduce sickness absence, presenteeism and the number of people on long-term benefits as well as boosting productivity.

 

The research estimates business costs of three potential reforms of the Sick Pay System.

 

  • Day one sick pay. This would remove the waiting days requirement, so that people can claim SSP from the first day of sickness absence;
  • Removing the lower earnings threshold, so that people can claim SSP regardless of the level of their earnings; and
  • Increasing the rate of SSP. The report provides a range of scenarios including paying the real Living Wage, the National Living Wage (NLW) and 75% of the NLW. 

 

The positive effects of sick pay reform would particularly benefit the increasing proportion of the UK workforce managing long-term conditions and ensure fewer workers fall out of the job market entirely. The evidence found that the direct costs of increasing sick pay were outweighed by the benefits, which include increased productivity, fewer periods of prolonged absence due to exacerbating existing conditions and better public health outcomes, because people are not spreading illness by coming into work sick. 

 

Overall benefits to business slightly outweighed business costs, whilst the gains to Government and the wider economy were larger thanks to positive outcomes associated with reducing the benefits bill, and boosting labour supply. Broader benefits including the potential to reduce NHS costs would raise these benefits further. The research looked at each measure proposed and based the analysis on a conservative assessment of the wider evidence base. 

 

The report recommended, in line with the policy practices of other advanced economies, that some of the direct costs accrued to businesses could be reduced by the Government sharing some of the gains through a form of business rebate for smaller employers.

 

The wider evidence base on positive outcomes finds that:

 

  • Generous paid sick leave policies are shown to decrease influenza-like illness rates by as much as 23.5% in the population. 
  • Access to paid sick leave greatly increases the odds that a sick employee will come back to work once they recover, with one study of cancer patients finding they were three times more likely to return to work with adequate sick leave. 
  • Workers with access to paid sick leave were found to be 28% less likely to be injured than those without it, resulting in reduced costs to the NHS.    

 

Matthew Oakley, Director of WPI Economics said “The UK’s sick pay system is just not working. This evidence shows that reforms would be a win for workers, businesses and Government alike. Even with a conservative approach to estimating the benefits of policy change, we found that these significantly outweigh the short-term costs.”

 

Sir Robert Buckland, MP for South Swindon said: “Improving workers' sick pay is a win-win policy for Rishi Sunak, supporting hard-working people and boosting our post-pandemic economic recovery. The Government should act now on this welcome evidence in order to safeguard the future health and prosperity of our nation.”

 

Amanda Walters, Director of the Safe Sick Pay Campaign said: “Making sick pay available for everyone from the first day of illness should be a minimum guarantee if we want a healthy, productive workforce. We are asking the Government to act now on this important reform and ensure that hard working people get the support they need to rest, recover and return to work.”

 

UNISON general secretary Christina McAnea said: “The pandemic underlined how sick pay needs a total overhaul. Those earning the least often don’t qualify, or they face such a huge drop in wages they could risk working when they shouldn’t. Anyone who’s ill should be given sick pay from the first day. That way, those on poverty wages, such as care workers, won’t go into work when it’s not safe because they’re worried about their bills.”

 

John Godfrey, Director of Levelling Up, Legal and General Group, which is in the process of implementing sick pay changes across its investment and property businesses said: “Improving the health of the UK workforce means tackling the social determinants of health, like housing, access to education, and, crucially, good quality employment, because there is an undeniable relationship between work and health. The benefits of the whole economy engaging in achieving better health outcomes are clear; if businesses, investors, and policymakers play their part, we will see lasting, tangible improvements across society and the economy.”

 

The Safe Sick Pay campaign has called for measures to be brought forward in the forthcoming Autumn Statement, pointing to some of the horrific experiences of some workers affected by the current regime including one cancer patient who was left without sufficient income to pay the rent as he went through his treatment. 

 

Dan, a cancer patient and former assistant manager at a supermarket said: “A lack of adequate sick pay was a factor in my subsequent mental health problems and decision to quit my job and take a prolonged period out of work to recover.”  

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report released today, 21 September, the Safe Sick Pay Campaign published the results of a year-long listening campaign, in which researchers consulted over 350 cleaners from different backgrounds and sectors, only 21% of whom said they had access to sick pay, and 35% said they had been into work when sick.

The report, Safe Sick Pay: the Case for Change, is being published to mark the launch of the new campaign, and brings together the extensive literature on the need for sick pay reform, based on research by charities, trade unions and the private sector. It also makes the economic case for a better sick pay system that will ensure workers can stay at home to recover, and prevent the spread of illness in workplaces.

Finally, it sets out the three key changes the Safe Sick Pay Campaign is calling for – alongside a range of partners – to create a Safe Sick Pay system that will benefit millions across the UK.

Amanda Walters, Campaign Director of the Safe Sick Pay Campaign, said:

“Whatever work we do, we deserve to know a safe sick pay system is there so that if we get unwell, we can take the time we need to get better.

“For millions of workers – particularly those on low pay and in precarious work such as cleaners and carers – that simply does not exist, and they face having to work through illness, or take time off they cannot afford.

“The Government must urgently fix this broken system to protect workers’ wellbeing, and ensure that everyone can access safe sick pay.”

 

For more information or to arrange an interview, contact the press office on 07932700515 or [email protected]

Notes to editors:

  1. The full report is available here.
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Who gets Statutory Sick Pay?

  • A third of workers only get Statutory Sick Pay. They are mainly on low incomes, and often in precarious work. They are more likely to be women, people of colour and from migrant backgrounds.

 

What about everyone else?

  • Around half of employers have their own policies, under which they top up Statutory Sick Pay, usually to your ordinary wages, at least for a while. Nearly two million workers get no sick pay at all, because they don’t earn over £120 per week with any one employer, though many have multiple employers.

 

How did we get here?

  • Statutory Sick Pay was introduced in 1982, but hasn’t kept up with changes to how we work and live. Today, it's nowhere near enough to cover the cost of living.

 

What happens in other countries?

  • The UK has one of the lowest rates of Statutory Sick Pay of any wealthy economy. Elsewhere, particularly in Europe, sick pay is more often in line with earnings, and available from day one of illness. 

 

What happened during the pandemic?

  • The pandemic shone a light on the holes in the sick pay system, and the Government accepted Statutory Sick Pay doesn't work. They scrapped the four-day wait, so everyone could get sick pay from the first day of illness, and created a one-off payment of £500 for low-income workers who needed to isolate. These reforms have been scrapped.

 

How much would it cost to fix it?

  • It would cost an average of £130 per year per employee. This could be a significant cost for small businesses, but the Federation of Small Businesses and CBI have both called for this change. The Government could also make it possible for some businesses to claim sick pay back, as it did during the early stages of the pandemic.

 

What you can do:

We’re preparing to launch our campaign for better sick pay. Sign up here for updates on how you can get involved.

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Statutory Sick Pay is the money you are entitled to if you are employed but get sick and can’t work. It is less than £100 per week  and nowhere near enough to cover the bills and other living costs.
  • Around half of employers only provide Statutory Sick Pay, so millions of workers - mainly low income and key workers such as cleaners and carers - face financial hardship if they get sick, whether that's long-term or just a few days.
  • Statutory Sick Pay is only available from the fourth day of illness, so you lose over half a week’s wages before getting anything.
  • You’re also only entitled to Statutory Sick Pay from an employer with whom you earn more than £120 per week. This applies even if you earn more than this from multiple employers, like many cleaners. Nearly two million people fall through this loophole and get no sick pay at all.
  • This means for millions of us, getting sick means struggling to pay the bills. Taking time off to get better may not be an option, which puts at risk our own wellbeing, and the safety of our colleagues and families.
  •  

    What we’re calling for:

    1. Higher Statutory Sick Pay, in line with living costs, and the living wage.
    2. An end to the four-day wait, so everyone can get it from day one of being unwell.
    3. Abolition of the earnings threshold, so all workers are entitled to sick pay.

     

    What you can do:

    We’ll be launching the campaign soon. Sign up here to stay up to date with campaign news and how you can help bring about better sick pay for everyone.

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    the BBC. The airport called that afternoon and said they would like to meet.

     

    After the letter was sent, the workers met again to evaluate and decide next steps. We looked at the charts to identify who hadn’t signed the letter, why and who else we needed to speak to, to fill in the gaps. We agreed that we needed to keep up the pressure until the decision on the third runway had been made. Over the next months we carried on doing structure tests and asking our allies to act.

     

    Success!

     

    We met with the airport early December. At that meeting the airport announced they would sign up to become a Living Wage employer! They agreed to giving a pay rise to over 3,200 subcontracted staff, including some pay rises of almost £3 an hour. This was a huge shift from the previous meetings with the airport as workers were beginning to pose a real threat to the airports self-interest to gain the third runway. In a few months we had made far greater gains that in the previous years because we stopped taking shortcuts and focused on deep organising and building the power of the workers.

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    Organising Foundation Course where we give detailed practical support to putting each of these stages into practice. 

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    As we waited in the freezing December cold, I took out my phone one more time to see if the news had come in yet. My fingers frozen from being kettled for hours made it hard to work the pad. Finally, the screen lit up, but I could see no headlines had come through yet.

     

    The mood in Trafalgar square was ominous as we waited for the results of the vote on whether the government were going to rise university tuition fees from £3,000 a year to £9,000 a year. Everyone in the square was cold, tired and hungry. Some people were building fires, some were trying to break into the Treasury, while thousands of others were standing around waiting impatiently for the results.

     

    The last 6 months prior to this point had been relentless. For me, as the Campaigns Officer at the University of Manchester Students’ Union, every waking moment in those months I spent engaging students in Manchester and moving them into action. We marched in Manchester and in London, we occupied the University, we took direct action… we mobilised thousands of students to act. We did everything we could… right?

     

    I suddenly heard a murmur ripple through the square, across the thousands of students kettled there. I took out my phone and saw the headline. We had lost. My heart sunk. And I thought to myself, all that work and dedication amounted to nothing. I cried the whole way home. I locked myself in my room and questioned everything I’d ever believed. Can we actually create change? Is there a way to actually win progressive campaigns? Because so far in my lifetime, I’d not seen that we could.

     

    This question lead me on a quest to find out the answer, and to start exploring who is actually winning progressive campaigns, and how are they doing it. And that is how I came across Organising.

     

    The Solution: Organising

     

    Organising is where you bring a wide range of people and organisations from a community or workplace together to build a unified body. By coming together in this way that community or workplace then has enough weight behind it in order to challenge politicians and companies to act on the issues impacting that community. I’m sure many of us have experienced how difficult it is to get listened to when you are the only one person speaking up, or you are just a few people. In Organising you bring together hundreds or thousands of people together so that you cannot be ignored, and you can further your collective agenda.

     

    There are 3 key differences between Organising and the campaign we did as students in 2010.

     

    1. Build a broad coalition

    In Organising you want to build broad coalitions, rather than mobilise just one facet of the population such as students. You do this so that you can have more strength. The more diverse your coalition is the more likely it is that politicians will care about what you have to say. And they are less able to box you in as one interest group among others. This way they can also not pit you against each other.

     

    2. Research the interests of your opponent

    Knowing your opponent’s interests and Achilles’ heel is key to Organising. Once you have done enough desk based and on the ground research then the actions you do should be aimed at using this knowledge to your advantage. For instance, in 2010 it would have strengthened our hand to have a real understanding of the interests of those in government so that we could focus our actions on trying to become a threat to this.   

     

    3. Be strategic

    By doing a Power Analysis of the fight you are in, and what you need to do in order to win and shift the power balance, you can form your strategy and decide on specific tactics that will get you to where you want to be. We often decide to take particular actions, like marching or occupying a University, because it is familiar and what we know. In Organising, on the other hand, what we are interested in is what actions will be effective.

     

    I don’t know for sure that having used an Organising model in 2010 would have led to a win. But what I do know is that since I became an Organiser in 2013 I finally started winning campaigns and have seen that you can create change, and that by using this methodology you can win progressive campaigns.

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