ONS signals UK long-term sickness inactivity may be lower than thought

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ONS UK sickness activity update

Highlights

ONS’s Transformed Labour Force Survey suggests UK long-term sickness inactivity may be lower than previously reported, though the exact gap size remains unquantified.
TLFS is achieving higher response rates and better data quality compared to the current Labour Force Survey, with a potential decision on switching survey bases due mid-2025.
ONS budget constraints from running two surveys are impacting data quality and investment in broader statistical work, complicating policy decisions reliant on accurate labour market data.

Revised survey points to lower inactivity estimates

As reported by Financial Times, citing the Office for National Statistics, early estimates from its Transformed Labour Force Survey indicate lower levels of economic inactivity caused by long-term sickness than the existing Labour Force Survey. The agency says differences in inactivity estimates account for the largest gaps between the two measures as it works toward a full rollout of the new survey at the end of next year.

The ONS does not quantify the size of the gap yet and says more analysis is needed because the two surveys use different definitions of long-term sickness. James Benford, the ONS director-general for economic statistics, says changes to survey design are intended to improve estimates of why people are outside the workforce, with early indications showing a more clearly defined and lower estimate for people reporting long-term sickness.

The findings echo a 2024 Resolution Foundation report that argued falling response rates had created an overly pessimistic picture of the UK jobs market. Hannah Slaughter, an economist at the think-tank, says the significance of the discrepancies will only become clearer once the underlying TLFS data is published, while warning that other indicators still show ill health remains a genuine labour market problem rather than a statistical distortion.

Data quality pressures shape next steps

The ONS is still trying to repair longstanding problems with the current jobs survey, including weak participation after Covid lockdowns disrupted face-to-face interviews. Response rates in the existing survey stand at 25 per cent in the first quarter of this year, while the TLFS is showing higher response rates, fewer partial completions and shorter completion times.

The agency plans to decide midway through next year whether to approve a delayed switch to the TLFS as the basis for official employment and economic inactivity figures. Until more detailed analysis is published next year, uncertainty over the scale of the differences remains a setback for ministers, central bank officials and others using labour market data to guide policy and interest rate decisions.

Budget pressure is adding to the challenge. The ONS says running two labour force surveys at the same time is increasingly constraining data quality and limiting its ability to invest in broader statistical improvements, as it also scales up work on the 2031 census after dropping plans last year to move to admin-based estimates.

Our earlier article on the ONS’s timetable for switching from the Labour Force Survey to the Transformed Labour Force Survey explained that the agency is working toward a defined transition plan to replace a dataset hit by persistent quality issues. It highlighted that running both surveys in parallel is creating cost and data-quality pressures, and that the eventual switch will be important for policymakers, employers and investors who rely on UK labour market indicators.

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