Those with a long memory will remember my posts on The Sickness Absence Review (SAR), which also came to be called the Frost/ Black report by the media.

This report was published way back in November 2011, and various parties have been awaiting the Government’s response to the recommendations of that report ever since. And at long last that response has been published.

Just to recap, the report’s intention was to look at reducing sickness absence in the UK, and one of the principle areas to focus on was early intervention for employees that are off work ill. Put simply, the longer an employee is off work, the less likely that he or she will be able to re-enter the jobs market. And according the original report, Sickness Absence costs the UK around £22 billion every year, with £13 billion of that being met by the state. The other £9 billion was the cost to UK employers.

So there are some pretty dramatic fiscal drivers at work here, and if sickness absence can be reduced, this will be good for the treasury, employers and (of course) the employee.

With that in mind, the report made some wide-ranging recommendations as to how this could be achieved. Yesterday’s publication is the official Government response to those proposals.

Before proceeding further, I would highlight that I will be limiting most of my thoughts on this subject to those areas that are linked to employee benefit provision in the private sector. The report does touch on quite a few other areas such as GP knowledge and understanding of the benefits systems, the benefits system itself, Public Sector practices and Employment Law. If you would like an alternative view, and links to the report etc, may I suggest this link to the HR Bullets website that covered this story earlier today?

https://www.hrbullets.co.uk/hr-news/sickness-absence-review-government-adopts-most-of-the-proposals.html

So, having positioned the areas that I intend to cover, what do I think of the Government’s responses?

Well, there are various subjects to cover, and not wishing to write an article that takes three days to read, I will cover each of my main topics in separate posts.

So let’s start with the headline item from an employee benefits perspective.

One of the key recommendations of the report was that tax relief should be granted for certain benefits (such as Medical Insurance) which would help control and reduce employee absence. Although the original report was a bit hazy about how this would actually work, when I asked one of the authors of the report for clarification, he confirmed that the intention was that tax relief should be given to both the employer and employee.

And this was a huge step for an official report to take, and in my view is pivotal to encouraging employers to offer more medical benefits to their employees (which in turn is likely to dramatically reduce the numbers who end up long-term sick). My reasoning behind this statement is best viewed in the post I wrote at the time which can be viewed here:

https://www.jelfgroup.com/blog/2011/12/sickness-absence-review-a-bit-more-information/

It therefore follows, that I was really hoping that this recommendation would be supported.

On this point the official response was:

“We will consider this further and make a decision at the 2013 Budget”

So this is not an outright “no”, which is at least a positive sign. However, it does kick the can further down the road, and there is the potential that it could yet slip off the radar.

I really do hope the Government either support this idea, or at least call for more evidence on the subject so it can be considered further. This would be a huge step towards tackling Sickness Absence, and also reduce NHS costs as well. As such, any tax breaks are likely to pay for themselves very quickly indeed.

So we will have to wait and see.

One piece of ancillary news on this post is that the report confirms that the Government intend to retain the existing tax relief on Employee Assistance Programmes (EAP’s). This at least shows a willing attitude towards the tax-relief debate, although the sums involved for EAP’s are generally relatively small anyway.

So no changes here at present, but a possible shift could still be on the cards.

Will post on the other points separately.

Best regards

Steve