SMEs fear cost of NHS and welfare reforms

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More than half of SME employers fear the cost impact of the government's health and welfare reforms, according to Jelf Group.

As a result it called for the House of Lords to help prevent potentially severe consequences and examine the effects on business of the new regimes.

The employee benefits intermediary conducted a poll of 169 SME businesses at a recent seminar and found 55% worried about the reform's implications.

It suggested the main reasons that employers were fearful of increased financial pressures came from government overhauls of the NHS and welfare systems.

Anecdotal evidence of increased waiting lists on the NHS may mean key employees take longer to return to the workplace,” it said.

In the current economic climate this could be catastrophic for marginally profitable employers and even worse for fledgling business yet to make a return.

Similarly, the government’s new approach to means testing those on long-term state incapacity benefit, via the work-capability assessment (WCA), is now finding that huge numbers of people are allegedly ‘fit’ to return to work.

In effect, many of these claimants may be forced back into the workplace purely on financial grounds, even though it may be inappropriate for both the employee and employer,” it concluded.

Steve Herbert, head of benefits strategy for Jelf Employee Benefits, warned that employers dealing with several staff members off sick or being forced to return to work could were enormous.

And he feared that the impact on micro businesses may be even more extreme.

The Health and Social Care Bill and welfare reforms are both hugely contentious issues for this country but to date, the debate hasn’t particularly expanded beyond those individuals or organisations on which it will have an immediate impact,” he added.

Small and medium-sized enterprises are struggling with a number of economic pressures and this could be the straw that breaks the donkey’s back.

We very much understand that reforms are required, however, we recommend that the House of Lords should consider the wider impact on business in the interests of providing a stable labour market and employment opportunities.”

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