On 30 November, David Gauke, secretary of state for work and pensions, told the House of Commons that the Fit for Work scheme, which was set up in December 2014 to help offer health and workplace advice to employees, employers and GPs, was closing its referral and assessment service.
The referral service, offering occupational health assessments for employees who are at risk of long-term sickness absence, failed to get as many referrals by employers and GPs as the Department for Work & Pensions had expected.
There were just 650 referrals a month in England and Wales, compared with the original forecast of 34,000, and 100 a month in Scotland, compared with the estimated 4,200.
In his speech, Mr Gauke said: "I am therefore ending the contracts for the provision of the assessment service in England and Wales and in Scotland."
The Fit for Work online and phone services will still offer general health and work advice.
However Paul Avis, marketing director for Canada Life Group Insurance, said the government failed to properly implement the "great idea" of an occupational health referral service.
The closure of the occupational health referral and assessment service brings us back to the question - what is there for smaller employers? At the moment, there seems to be nothing.Katharine MoxhamHe said: "The service originally was seen as a positive government intervention to support employers who have always struggled with returning employees to the workplace.
"However, the implementation of what was a great idea seems to have undermined its initial promise at a number of levels."
In the first place, he said with the UK having a massive skills shortage of trained occupational health physicians and nurses, what became evident was that the kind of triage service expected by the government would not happen.
Mr Avis said: "The ability of the employer and employee not to take the advice, or the GP not to back it, meant that, at all stages, a resolution to the staff member's absence was not compulsory and therefore might not progress."
Moreover, he said the £500 limit it imposed on occupational health rehabilitation treatments was also a worry.
"This was not a £500 payment to get treatment done; the employer had to pay the £500 and then the employee, if the treatment was under that, would not be taxed as a P11D but if the treatment was above that level, the rest of the charge would be taxable.
"A combination of the service, reduced technical support and the £500 limit, and the ability to enable opt outs at any stage has no doubt led to the tiny amount of referrals cited by the Fit for Work service."
Losing the Fit for Work service highlights how complicated and important support services are, he added.
However, Mr Avis said in the future, this could be seen as a boost to group income protection as while the Fit for Work service in no way replaced what group insurers do, the importance of early intervention services and rehabilitation offered by group income protection policies will have been enhanced by the lack of this initial government-led intervention.
"If we recognise there are clearly too few occupationally health trained people in the UK, then the vocational rehabilitation specialists of insurers should be maximised to help anyone with group income protection and employers serious about managing absence", he added.
In Spring 2015, Jelf Employee Benefits (now part of Mercer), carried out a survey of employers, which found two-thirds of employers intended to use the Fit for Work service in some form as a tool to help manage absence.
Out of 140 employers, 6 per cent said they would use the service fully, 42 per cent intended to use it based on individual cases, and a further 20 per cent said they would use it for research.
Some 49 per cent of respondents at the time said they would adapt their formal sickness and absence policies to incorporate access to the Fit for Work service.
Katharine Moxham, spokesman for Group Risk Development, agreed group income protection providers could be given a boost by the closure of this service, as employers and employees look for alternatives.
She said: "I hope this leads to a greater focus on income protection.
"We've always said the Fit for Work service was great in as far as it went, but group protection could do far more.
"The closure of the occupational health referral and assessment service brings us back to the question - what is there for smaller employers? At the moment, there seems to be nothing.
"I would see this closure as an opportunity. While we are not occupational health specialists per se, we specialise in vocational rehabilitation and as an industry, group income protection individuals deliver what we think excellence looks like."
Ms Moxham added it was a "big shame that such a flagship programmes" had not been successful, saying: "The reality is either employers did not see the value of the services or did not know about it but for us as an industry it does give a greater focus on what we can offer."
A spokesman for the Department for Work & Pensions said: "We’re committed to helping companies support their employees to return to work promptly from sickness absence.
"That is why we are retaining the Fit for Work advice helpline, website and web chats and we are appointing a group of experts to shape future policy on occupational health.
"A thorough consultation with stakeholders, including the insurance industry, found that the complexity of group income protection products can limit take-up, which is why we are encouraging the industry to consider developing a product which addresses this."
simoney.kyriakou@ft.com
