As Rishi Sunak considers a tightening of public sector spending, evidence of the cost of ill health to the nation’s economy is showing that a squeeze on NHS funding would be a false economy.

In her seven weeks in the job the noted smoker Thérèse Coffey had already signaled her intention to ditch a tobacco control plan, and it remains to be seen whether this lurch toward libertarianism will be continued by her successor Steve Barclay, as he returns to the health and social care brief – that he only left in September.

In his time away Barclay may have missed research published earlier this month quantifying how investment in health boosts labour productivity and therefore economic activity. Analysis commissioned by the NHS Confederation and conducted by consultancy Carnall Farrar showed that for every taxpayer pound invested in the health service, four times that amount is recouped through gains in productivity stemming from increased participation in the labour market.

Two reports published earlier in the year, both relating to mental health, drew similar conclusions, after calculating the negative costs to the UK economy of the failure to invest adequately in the provision of support services.

In March the Mental Health Foundation and the LSE jointly released a report outlining how mental health problems were costing the economy around £118bn annually – approximately five per cent of the UK’s GDP. This research revealed that almost three quarters of that figure relates to the lost productivity of people living with mental health conditions, and the costs incurred by unpaid informal carers.

And the figure of £118bn may not even reflect the true cost. The LSE’s David McDaid, the lead author of the report, said, “Our estimate of the economic impacts of mental health conditions, much of which is felt well beyond the health and social care sector, is a conservative estimate.”

The report went on to explain, “Health service costs are based on the number of people receiving treatment and do not consider the many people who would benefit from treatment but either do not receive it because of pressure on services, or do not seek help. Additionally, no costs are included for reduced performance at work due to mental health problems, costs to criminal justice and housing systems linked to poor mental health, costs associated with addiction issues, or the costs associated with self-harm and suicide.”

Other studies quoted in the report noted the return on investment in parenting programmes (up to £15.80 in long-term savings for every £1 spent on one particular programme, for example) and in workplace interventions (savings of £5 for every £1 invested in supporting mental health).

A month later, in April, came another report, this time from Deloitte. The accounting firm estimated that the overall costs of poor mental health to employers – based on the combined costs of absenteeism, presenteeism (attending work despite illness and so not performing at full capacity) and labour turnover – had increased by 25 per cent since 2019, and now totalled between £53-56bn. 

Deloitte’s research also mirrored the return on investment estimate contained in the other reports, claiming that employers who invest in measures and initiatives to tackle mental health problems can expect to see an average of £5.30 for every £1 invested – leading it to conclude that, “Investing in workforce mental health and wellbeing not only benefits employees, it can also yield positive financial returns for employers.”

Minsters should already understand theses issues from work done within government. Three years ago Public Health England (PHE) noted that mental health conditions such as stress, depression and anxiety accounted for 14.3m working days lost per year (almost eight per cent of sickness absence), and the estimated cost of these absences to UK employers was £7.9bn. 

Research published by the DWP in 2016, estimated the cost of ill health to the government – in benefit payments, additional health costs, and forgone taxes and National Insurance – to be around £50bn a year. The total economic cost of sickness absence, lost productivity through worklessness, informal care giving and health-related productivity losses, was estimated to be more than £100bn annually.

The economic, as well as the health and societal benefits of investing in the NHS have surely never been any clearer.

And the next time the ex-health secretary lights up a cigar, she may also want to consider an estimate in 2019 from the charity Action on Smoking and Health, which put the cost of smoking to employers in England, through increased sickness absence and smoking breaks, at £4.6bn a year. Continued investment in both ill health and its causes is sorely needed. 


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