For those of you who celebrate, Monday was National Sickie Day. A glittering example of peak recognition day overload, the day was established to highlight the need to rest and recharge, which apparently culminates in mass “sickie” taking at this time of year.
Unlike its cousin, Blue Monday, which was created by a travel company as a marketing gag, the origins of National Sickie Day are unknown, but it does reflect a general spike in workplace absences in the UK at this time of year.
But what is the cost of the “sickie” and are we taking the mickey?
The IPPR estimates that in 2023, employee sickens cost UK employers around £100bn in productivity loss. However, £25bn of the £30bn increase from 2018 to 2023 came from presenteeism – employees working through illness, which leads to costly mistakes and reduced productivity. So clearly – if you’re ill, you’re ill – take that sickie.
But employers aren’t the only ones shouldering the cost of people being out of work due to ill health. The country’s economic inactivity due to sickness has been growing since the pandemic: the number of working-aged people in the UK in receipt of incapacity benefits has risen by around 800,000, with costs to the public purse rising by 25%. It is estimated the reduction in the workforce could reduce GDP by 1 to 1.5%.
The problem is severe but not unique. In the UK, and Scotland particularly, we often look to Norway and other Scandinavian countries for policy inspiration. But in this instance, we would do better to look away.
Norwegian workers take an average of 27.5 sickness absences a year, more than any other country in the OCED. It is causing acute problems for its business leaders and putting pressure on the employees who aren’t off sick.
The rise in sick leave across Europe is often blamed on generous welfare systems, and Norway certainly has one of those. In its country report on Norway, The International Monetary Fund said reforming its social benefits system was possibly the most important but also the most politically difficult challenge if faces.
Liz Kendall will be nodding her head to that last point as she works to get her ambitious overhaul of the benefits system over the line. Meanwhile, Rachel Reeves will be anxiously looking over Kendall’s shoulder as Reeves sees cutting benefit spend as her best and quickest chance of shrinking the state to avoid raising taxes and meet her fiscal rules.
But how does this all play out politically for a Labour party that has always maintained its commitment to the welfare state and how does it track in Scotland?
YouGov has a regular tracker that asks, ‘Does the benefit system need reform?’, which has demonstrated clear support for reform since it began in June of 2019. At the most recent poll on 9 December 2024, 64 per cent said the system worked either fairly badly and needed significant reform or very badly and needed major reform. When filtered by UK-wide Labour voters and Scottish respondents, the numbers don’t change that much – 61 per cent and 67 per cent respectively.
Clearly – like the NHS – there is a public appetite to reform. While some have speculated that the disfunction of the NHS has led to the disfunction of the benefits system, both economists and a House of Lords Economic Affairs Committee say the evidence refutes this hypothesis.
The good news for Kendall is reforming benefits won’t be dependent on NHS reforms and – in Scotland – shouldn’t be impacted by health’s devolved status. Which means, if done carefully, she can get more Britons economically active again and potentially start delivering on her party’s promised economic growth better than anyone else in her government has been able to do thus far.
The risks are clear – we are talking about people’s lives and their health – it’s an emotive issue and getting it wrong for an individual can have life and death consequences. Kendall is facing a tight rope walk, but there is economic and political capital to be won if she can stay balanced. Perhaps Norway and others may look on us for inspiration.