The initiative is aimed at getting people back to work and away from long-term sickness benefits, minister for welfare reform Lord Freud has announced.

It is hoped that the scheme will save employers up to £160 million a year in statutory sick pay and increase economic output by up to £900 million a year.

Currently, only 10 per cent of employees of small firms have access to an occupational health service, compared with more than half of staff in larger firms.

The new service will provide employers with bespoke, independent advice for cases of sickness absence lasting more than four weeks. Experts agree this approach will help to stop thousands of people falling out of work and onto long-term sickness benefits, says the government.

Lord Freud says that long-term sickness absence is a burden to business, to the taxpayer and to the thousands of people who get trapped on benefits when they could actually work.

‘So for the first time, all employers, big or small, will have access to a service that offers the early support they need to keep people in work and fulfil their aspirations.

‘It’s further proof that this government is confronting all the challenges facing Britain and making sure we compete and thrive in the global race.’

Dr Adam Marshall, director of policy at the British Chambers of Commerce says, ‘Sickness absence accounts for more than 300,000 people being out of work each year, costing employers and taxpayers tens of billions of pounds. Business will welcome the pragmatic approach being taken to tackle what is a very complex problem, and will push government for bold implementation of the Review’s recommendations.’