Britain’s Public Finances Struggling Due to Increase in Ill Health After Lockdowns
Britain’s public finances are facing a significant challenge as a result of a sharp and sustained rise in the number of working-age people leaving the job market due to ill health following the COVID-19 pandemic and subsequent lockdowns. According to the Office for Budget Responsibility (OBR), this trend is crippling the nation’s economy and putting pressure on already strained public finances.
The lockdown measures implemented to curb the spread of the virus have had a devastating impact on various sectors of the economy, including education and healthcare. However, one of the more pernicious and long-term consequences has been the surge in people leaving the workforce due to ill health.
Presently, over two million individuals are categorized as economically inactive, indicating that they are neither employed nor actively seeking employment due to health issues. This figure represents an increase of 350,000 compared to pre-pandemic levels, posing dire consequences for the economy and the government’s financial stability.
Among those not working, approximately 1.4 million people claim to be suffering from Long Covid, a condition characterized by prolonged symptoms following a COVID-19 infection. Additionally, mental health problems have become a significant cause of work absence, with nearly 620,000 individuals citing it as their reason for not being in the job market. This represents a jump of over one-third from a decade ago.
Several other health conditions have also contributed to the rise in inactivity. Progressive diseases like cancer have increased by 17%, affecting more than 200,000 individuals. Heart problems and musculoskeletal conditions have led to the absence of 111,000 and 543,000 people respectively from the workforce.
There are various reasons why these health conditions translate into increased inactivity. The pandemic has overwhelmed healthcare services, resulting in delayed treatment for other illnesses and prolonged waiting lists. As a result, individuals who are unable to work due to ill health face longer periods before they can reenter the job market. Additionally, family members often have to take time off from work to care for their ill relatives.
One concerning trend is the rising prevalence of poor mental health among young people, with it being the most common reason cited by those under 50 for their absence from the job market.
The benefits system itself may also contribute to the increase in economic inactivity. Individuals who are out of work due to poor health and are claiming benefits are often incentivized to opt for sickness support instead of jobseekers’ allowance.
Interestingly, this rise in economic inactivity appears to be specific to the United Kingdom, as opposed to a global phenomenon.
The costs associated with this additional inactivity are substantial. The OBR reports that the benefits bill has increased by £6.8 billion for the current financial year due to an additional 930,000 people in poor health, nearly half of whom are economically inactive.
The implications of this rise in ill health-related inactivity are significant. At a time when the economy is already grappling with a shortage of skilled workers and struggling to regain its pre-pandemic size, the loss of potential workforce participation further hampers the nation’s recovery and economic growth.
The government will need to address this issue strategically, implementing measures to support the physical and mental well-being of its citizens and ensuring timely access to healthcare services. By doing so, it can help individuals overcome their health challenges and rejoin the job market, ultimately alleviating the burden on public finances and fostering a stronger economy.
