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Ministers pressed to address workforce health as UK inactivity crisis persists

February 24, 2025

A fresh wave of calls from British business leaders urges the government to tackle mounting workforce ill health, with many firms citing employee absences as a drag on growth.

The latest survey from the Good Growth Foundation think tank reveals that more than three quarters (78 per cent) of companies want ministers to boost workers’ mental and physical health—thereby increasing participation in the labour market and stimulating economic stability.

The plea emerges while the Treasury weighs billions of pounds in welfare cuts to meet fiscal targets. Praful Nargund, director of the Good Growth Foundation, says businesses are clear: “The government must address workforce health to improve economic stability and growth prospects.”

Among the 1,200 employers surveyed, 35 per cent warn that current staff absences are hindering operations, and nearly a third flag ongoing hiring difficulties, even as the broader labour market slows. A separate 32 per cent note the challenges of retaining employees—issues that risk compounding the UK’s persistent inactivity rate of 21.5 per cent, which is 1.2 percentage points above pre-pandemic levels.

New official data confirms that roughly 2.8 million people cite long-term sickness as the main reason for not seeking work. Nargund stresses the need to align any new back-to-work requirements with effective health support: “We have a workforce inactivity crisis… many people want to work but lack the assistance and adjustments they need.”

Survey respondents were not questioned about the exact measures they endorse, though an earlier foundation poll suggested proposals such as NHS waiting-list reductions, preventative healthcare, and a potential tax on junk food. Liz Kendall, the work and pensions secretary, intends to reinvest prospective welfare cuts—estimated at around £5 billion—into back-to-work schemes to support those with chronic illness.

Economists warn that chancellor Rachel Reeves’s budget headroom, initially at £9.9 billion, could be eroded by rising market borrowing costs and a weaker growth outlook. The government, meanwhile, continues to grapple with a broader inactivity puzzle. As other economies witness a pandemic recovery in employment rates, the UK’s remains stubbornly high—largely attributed to an uptick in mental health issues among young adults and the reluctance of older workers to re-enter the labour force.

Beyond workforce health, more than half of survey participants say that re-establishing or expanding access to the European Union market is their main request of the government. Another fifth cite the importance of both EU and US market access—an indication that many businesses see global trade connections, alongside a healthier and more active UK workforce, as key to ensuring long-term growth.