New Heath and Work Service will "get long-term sick back to work", says Government

The new Health and Work Service will offer occupational health assessments, support for employees and employers and a telephone and internet advice service, available to the public. It will be funded through the abolition of the Statutory Sick Pay (SSP) Percentage Threshold Scheme (PTS), which compensates employers who experience higher levels of sickness absence than average.

"More than 130 million days a year are lost to sickness absence in Great Britain, which has a substantial impact on workers, employers and taxpayers," said Work and Pensions Minister Mike Penning.

"As part of the government's long-term economic plan, we are taking action to improve getting people back into work. This is a triple-win: it will mean more people with a job, reduced cost for business, and a more financially secure future for Britain," he said.

The new scheme will be made available to companies in England, Scotland and Wales with workers who have been absent due to illness, or are expected to be absent, for longer than four weeks. Referrals could be made either by the employer or by the employee's GP. The service will not be compulsory, so employees will be able to refuse to be assessed or to follow any recommended treatment or course of action.

The Health and Work Service will conduct a work-focused occupational health assessment, designed to identify the issue preventing the employee from returning to work and making recommendations to help the employee back to work more quickly. It will draw up a plan for the employee, employer and GP including a timetable for return to work, fitness for work advice and information about where to obtain appropriate help if needed.

Between October 2010 and September 2013, up to 960,000 employees were on long-term sick leave, according to Government figures. This is defined as being absent from work for a month or more over the course of a year. Although more than half a million people have come off sickness benefits since 2010, more than 130 million days per year are still being lost to sickness absence and working-age ill health costs the UK economy £100 billion a year, according to the Government.

Under current laws, employees are entitled to almost £90 a week SSP from their employers for up to 28 weeks, provided that they meet certain criteria. In practice, many employers pay staff more than this basic amount. The PTS provides some compensation to those employers paying more than the average amount of SSP, but the Government has described this as an "outdated" scheme that "does nothing to promote or support active management of sickness absences by either the employer or employee".

The Government expects that any financial losses experienced by businesses as a result of the end of the PTS would "more than likely" be offset by the reduction in lost working days and increased economic output that the new Health and Work Service would bring. It has estimated that the new service will save employers £70 million a year and cut the time people spend off from work by as much as 40%.

The creation of the new service was recommended by Dame Carol Black and David Frost, former director-general of the British Chambers of Commerce, as part of their 2011 independent review of UK sickness absence. It will be run by a private sector company following a tender process, and is expected to be up and running by the end of 2014.