Doctors are to be told to sign fewer people off work with sick notes and instead help them to remain in employment under plans being considered for next month’s Budget.
The Treasury and the Department for Work and Pensions (DWP) are examining how to reverse a marked rise in the number of people off work with long-term sickness in the wake of the Covid-19 pandemic.
The Telegraph can reveal that one idea under consideration is a new approach to how GPs decide whether people are too sick to work.
Doctors would be encouraged to focus on recommending ways people with long-term illnesses can continue to work with support rather than using sick notes to authorise them to drop out of the labour market entirely.
A government source said: “The mental health benefits of work are well established. We want to do all we can to encourage as many people as possible to stay in work with the relevant support in place to help them do so, including signposting them to that support at the earliest possible opportunity.”
Jeremy Hunt, the Chancellor, will put getting people off out-of-work benefits and into employment at the heart of his Budget on March 15, arguing that it will help to deliver economic growth.
Downing Street and Treasury officials believe that the number of people out of work but who could be in employment is a major barrier to economic growth. It comes after the International Monetary Fund said that the UK was on course to be the only major economy to shrink this year.
Some 2.32 million people were signed off with long-term health conditions last summer, according to the Labour Force Survey. That is up from 1.95 million before the pandemic in the summer of 2019.
During that period, there was a notable rise in people signed off with mental illnesses such as phobias or nervous disorders - up from 257,000 to 313,000.
Musculoskeletal issues were also cited by sources as a health problem that should not necessarily mean people are permanently out of work.
Whitehall insiders believe that more could be done by GPs issuing sick notes that help people in such positions to keep working, providing advice on the right structures and support needed.
More radical potential shake-ups, such as giving government-paid work coaches a more direct role in the sick notes system, are not expected to be adopted.
Final decisions on the welfare-to-work proposals, which are being drawn up by Mel Stride, the Work and Pensions Secretary, have not yet been reached.
When he was chancellor, Rishi Sunak pushed the DWP to go further in encouraging people to move off benefits and into work. He tasked Mr Stride with the drive before Christmas.
Treasury insiders continue to insist that there remains little money to play with for next month’s Budget, despite the sharp fall in energy prices and signs inflation has peaked.
Calls from a vocal group of Tory backbenchers for tax cuts are being rebutted, with No 10 and No 11 focused instead on halving inflation this year.
Sick notes, renamed "fit notes" by the Government, are official written statements from a registered healthcare professional giving their medical opinion on a person's fitness for work.
Many of those who are too sick to work in the long term can claim benefits from the Government to support them through financial hardship.
Work 'good for your health'
Stephen Evans, chief executive of the Learning and Work Institute, said: “Good quality work can be good for your health and wellbeing, depending on your condition, and being out of work can be harmful to your health.
“Ensuring health professionals take full account of that in working with people to decide how much they may be able to work makes great sense.
“Ultimately, most people want to go back to work when they are well enough to do so, and this approach can help make that happen.”
Mr Stride is exploring other ideas to encourage people back into work - especially for those aged over 50, whose departure from the labour market has been a notable trend since the pandemic.
One idea being looked at is putting work coaches in GP surgeries, with doctors able to refer older patients who express an interest in getting a job to them for advice.
Another is to introduce tax breaks for companies that take on responsibility for employee wellbeing by providing physiotherapy and mental health support.
Mr Stride also wants to reach early retirees with financial advice, with many set to be told that they do not have enough cash to see them through life.
He is seeking to substantially increase the provision of “mid-life MoTs” and is encouraging pension companies to offer them to all clients who are over 50.
Ministers are also working with companies, including in financial services, to increase the number of posts they offer with flexible working options.
Experts have said that many older people may only want to return to the workplace part-time and tend to prefer roles where they can work from home.
Another idea that has been considered, but is thought unlikely to be pursued, is offering older people a one-year exemption from income tax if they return to work.
Meanwhile, benefits claimants are set to be told they will have to complete intensive skills programmes or they will have their welfare payments slashed.
Announcements about the final decisions are expected in the Budget.
More people moving into work
Figures released by the Office for National Statistics on Tuesday suggested that some of those who have been out of work are already starting to return to employment.
A net flow of 48,000 people moved out of economic inactivity and into employment between the three months to September and the three months to December. This was a record-high movement of economically inactive people into the workforce, said the ONS.
Economic inactivity refers to people who are not in the workforce but have not been looking for a job, meaning they would not be defined as unemployed.
The movement was driven by young people aged from 16 to 24, and people between 50 and 64.
