Ex-John Lewis boss warns UK faces £85bn sickness bill and economic crisis
Sir Charlie Mayfield says ill-health is driving millions out of work, costing employers and the economy billions — but the problem is “not inevitable.”
Britain is at risk of an “economic inactivity crisis” as the number of sick and disabled people out of work continues to rise, according to a government-commissioned review led by Sir Charlie Mayfield, the former John Lewis chairman.
The report warns that 800,000 more people are now out of work due to health conditions than in 2019, costing employers £85 billion a year in lost productivity, sick pay and staff turnover. Without intervention, a further 600,000 workers could leave the labour market by 2030.
“This is not inevitable,” Sir Charlie said, as he launched a new taskforce aimed at helping people return to work and tackling what he described as a “vicious cycle” of poor health and economic inactivity.
The report, commissioned by the Department for Work and Pensions (DWP) but produced independently, found that one in five working-age people is now out of work and not seeking employment — a major reversal after decades of improving participation.
Sir Charlie said sickness is costing the UK far more than just business losses.
“Work is generally good for health, and health is good for work,” he said. “For employers, sickness and staff turnover bring disruption and lost experience. For the country, it means weaker growth, higher welfare spending and greater pressure on the NHS.”
According to some estimates, illness-related inactivity costs the wider economy £212 billion a year — almost 70% of annual income tax receipts — through lost output, welfare payments and additional healthcare costs.
The Office for Budget Responsibility (OBR) expects spending on health and disability benefits for working-age people alone to reach £72.3 billion by 2029–30.
Mayfield said the surge was being fuelled by a “sharp rise” in mental health conditions among younger workers and chronic musculoskeletal problems — such as back pain and joint issues — among older staff.
His taskforce will also work with GPs, who he said often face pressure from patients to issue sick notes but find it difficult to assess whether someone could work in a modified role.
Business groups broadly welcomed the taskforce but warned that parts of Labour’s Employment Rights Bill risk discouraging firms from hiring people with existing health conditions.
The Bill includes guaranteed hours and restrictions on zero-hours contracts — measures that some retailers fear will make flexible hiring harder.
Helen Dickinson, chief executive of the British Retail Consortium, said retailers were committed to supporting employees with ill-health but that “the government’s goals and policies are at odds with one another.”
“While encouraging employers to invest in workforce health and provide flexibility, they risk making it more difficult,” she said.
In response to the report, the government announced a partnership with over 60 major employers, including Tesco, Google UK, Nando’s and John Lewis, to test new health and wellbeing initiatives aimed at reducing sickness absence and improving return-to-work rates.
Over the next three years, these programmes will form the basis for a voluntary national workplace health standard, expected by 2029.
Work and Pensions Secretary Pat McFadden said the partnership was “a win-win for employees and employers.”
“This is about keeping good, experienced staff in work and supporting people to stay healthy for longer,” he said.
Ruth Curtice, chief executive of the Resolution Foundation, said the review “accurately identified a culture of fear, a dearth of support and structural barriers to work” as key issues behind Britain’s worsening inactivity rate.
The CIPD, representing HR professionals, welcomed the focus on prevention. Its chief executive, Peter Cheese, said the report’s success “will depend on how well its recommendations are understood by business and backed by national and regional policymakers.”
Dr Roman Raczka, president of the British Psychological Society, said the shift toward “rehumanising the workplace” was overdue, but warned that not everyone could or should return to work.
“The workplace itself can be a root cause of poor mental health,” he said. “Those signed off sick deserve timely access to safe, compassionate care.”
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Ex-John Lewis boss warns UK faces £85bn sickness bill and economic crisis
