A UK region explores employer incentives on wellbeing

Norman Lamb may have surrendered his ministerial red box when the UK’s experiment in coalition government ended in 2015, but the former health minister is energised by a new mission: to persuade employers to play a far bigger role in keeping their workers healthy.

In those countries where employer-funded insurance forms a major part of health provision, companies have a substantial incentive to keep their staff healthy. In the UK, however, most bosses will not bear the cost of staff sickness in the form of higher premiums because their employees are covered by the taxpayer-funded National Health Service.

Lamb, a Liberal Democrat MP and former minister for community and social care, is determined to shift perceptions about where UK employers’ responsibilities lie. Interviewed in his office in the Palace of Westminster in London, the MP radiates excitement and enthusiasm about the prospect of employers taking active steps to keep their workforce healthy. Although he represents the North Norfolk constituency in eastern England, the test bed for his approach will be more than 100 miles inland in the West Midlands, which has become hospitable terrain for this kind of innovation following the region’s successful application for devolved powers from Westminster.

In 2015, Lamb, whose ministerial responsibilities included mental health, was appointed to chair a mental health commission in the West Midlands after the region’s 18 constituent local councils identified poor mental health and wellbeing as a significant driver of demand for public services, which in turn had a negative impact on the economy.

Lamb explains that originally he was asked to produce only a set of recommendations. “I decided there are so many reports with recommendations that get welcomed and then ignored [that] I got them to agree to an action plan and got all of the relevant bodies in the West Midlands to sign up to it, which gives us a degree of accountability to try and make things happen.”

He was also keen to see employers more involved in the health and wellbeing of their staff, to help reduce some of the pressure on his own strained departmental budget.

If we just keep pleading for companies to do more, some will but most won’t

The mental health commission came up with the idea of a “West Midlands workplace wellbeing commitment”, a voluntary agreement to a plan of action, which it is encouraging private and public sector employers to sign. The goal is to commit employers to “a standard of behaviour towards employees”.

Some big employers have agreed to take part, including carmaker Jaguar Land Rover and the West Midlands fire service, but local organisers aspire to attract 200 employers over the next two years.

Lamb knew the commission’s ideas were in line with those of Simon Stevens, chief executive of NHS England. The plan contains a commitment to evaluate the proposal Lamb is most excited about, the “wellbeing premium”. Aware that Stevens had championed the idea of fiscal incentives, Lamb and his team came up with a proposal to offer businesses a discount on their business rates — local authority taxation — provided they implemented specific interventions that were known to work. The proposal has been put out to consultation.

The plan of action was launched at the end of January as part of the wider programme developed by Lamb’s commission. Outlining measures that participating businesses might be expected to implement in return for the discount, Lamb says better training of line managers has been one of the most effective ways of improving wellbeing in the workplace.

“If you’ve got line managers who treat their team better, who are more sensitive and effective at handling sickness absence or underperformance because of stress or anxiety [and] who avoid a bullying culture, then you have a positive impact on wellbeing of that workforce. You reduce sickness absence; you reduce presenteeism — people turning up at work who aren’t performing — and, potentially, you reduce the number of people falling out of work because of ill health,” he says.

Acknowledging that to approve the tax incentive proposal, tax authorities would need to be convinced that the savings would justify the initial outlay, Lamb cites the potential fruits of his approach as “reduced benefit payments, potentially improved tax revenues, reduced use of the NHS and improved productivity”.

Nor, he believes, would an ongoing public subsidy be required. The MP envisages the rates discount would last two years and believes the scheme will prove so effective in keeping staff healthier and happier that “enlightened self-interest” will persuade companies to continue with it thereafter.

He is hopeful that both Whitehall’s work and health unit — staffed by civil servants from the health department and work and pensions department — and NHS England will contribute money to ensure the scheme gets off the ground.

The action plan also proposes a separate scheme to implement individual placement and support (IPS), which he describes as an internationally evidenced and intensive programme for people who are out of work and have severe and enduring mental ill health.

The programme prepares people to re-enter the workforce and supports them for a period after they have found what he calls “real jobs” rather than “supported workshop-type employment”. The commission has been given about £8.5m by the work and health unit to run a trial, which he hopes will pave the way for the scheme’s wider adoption.

Implementing the mental health commission’s ideas is vital if employers are to take their place in the front line of employee health, Lamb argues. “Exhortation on its own won’t work; if we just keep pleading for companies to do more or even demanding that companies do more, some will but most won’t.”

But if companies invested in improving training or the ergonomics of office tasks, for example, they would see a positive impact on their bottom line, he suggests. “And once you’ve lifted their horizons and got them to see the benefits of doing these things, then you don’t need to continue a public subsidy. For the sake of £2m or £3m [the estimated cost of the rates discount pilot], that seems to me to be well worth it,” he adds.