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Mental Health and the UK Economy 2.3

Mental Health and the UK Economy 2.3

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Mental Health and the UK Economy
March 2007
Oxford Economics
121, St Aldates, Oxford, OX1 1HB
\ue000: 01865 268900, \ue001: 01865 268906
\ue000:www.oxfordeconomics.com
Mental Health and the UK Economy
March 2007
2
Contents
Contents................................................................................................................................................. 2
1
Executive summary...................................................................................................................... 3
2
Introduction................................................................................................................................... 5
2.1
The brief................................................................................................................................. 5
2.2
Definition of mental health used in this study........................................................................ 5
2.3
Report structure..................................................................................................................... 5
3
Analysis of the growth in mental health incapacity.................................................................. 7
3.1
Incapacity Benefit claimant due to mental health problems.................................................. 7
3.2
Projections of Incapacity Benefit recipients due to mental health reasons......................... 10
3.3
Mental Health Problems for those people in work............................................................... 11
3.4
People in work projection..................................................................................................... 15
4
Evaluation of spending on mental health services................................................................. 16
4.1
Investment in mental health................................................................................................. 16
4.2
Charities\u2019 role in mental health spending............................................................................. 19
5
Impact of government spending on mental health services................................................. 20
5.1
Introduction.......................................................................................................................... 20
5.2
Costs of mental health treatment......................................................................................... 20
5.3
Labour market benefits of treatment of mental health problems......................................... 22
5.4
Conclusion........................................................................................................................... 26
6
Economic Benefit Analysis....................................................................................................... 27
6.1
Introduction.......................................................................................................................... 27
6.2
Approach.............................................................................................................................. 27
6.3
Results................................................................................................................................. 28
6.4
Comparisons with other studies.......................................................................................... 30
6.5
Conclusion........................................................................................................................... 30
Mental Health and the UK Economy
March 2007
3
1 Executive summary
A substantial number of people in the UK suffer from a mental health illness\u2026
\u2022

In 2006 there were nearly one million recipients of Incapacity Benefit due to mental and behavioural disorders. This is 40% of total Incapacity Benefit recipients. This is similar to the total number of unemployment benefits claims in the UK.

\u2022
The annual average growth rate for mental and behavioural disorders claims since 2000 is 5.4%.
This compares to 0.8% for overall Incapacity Benefit claims.
\u2022

The government has an aspiration to reduce Incapacity Benefits recipients, in total, by one million over the next ten years. This implies, on a pro rata basis, a reduction of 400,000 Incapacity Benefit recipients due to mental and behavioural disorders.

\u2026affecting people in work as well as those out of work
\u2022

The self-reported health related illness survey showed over ten million working days were lost due to stress, depression and anxiety. This is most prevalent in professional occupations and the public sector.

Spending on mental health services has grown significantly in the last 5 years\u2026.
\u2022
Investment in mental health was nearly \u00a35 billion in 2005/06 and the real average annual growth
rate since 2001/02 has been 5.8%.
\u2026but the growth has lagged that of overall health spending over this period
\u2022

Whilst this level of growth is above that of total government spending it has lagged someway behind overall health spending, and the growth rate fell back significantly in the last year (2005/06).

\u2022

There are concerns that not all reported investment ends up being spent on mental health services; the high number of no star mental health trusts has been attributed to funding constraints.

Studies demonstrate that people suffering from a mental health illness can be supported to
gain or retain employment\u2026
\u2022
There are some evaluation studies that point to an improved labour market performance following
increases in spending to tackle mental health problems.
\u2026the cost of this support may not be substantial
\u2022
Some of the factors that are important for successful job retention and return to work for people
with a mental health problem are not necessarily expensive.
\u2022
Our own statistical research supports the view that the costs of helping someone with a common
mental health problem to gain or retain a job may be as low as \u00a32,500.
\u2022
However, given the range of illnesses that can be described as a mental health related illness, the
cost of support will vary enormously between individual cases.
The benefits to both the economy and Exchequer from supporting someone with a mental
health illness to gain or retain a job are significant
\u2022
The value from a single person working for a full year, rather than claiming benefits is nearly
\u00a320,000 for the Exchequer and over \u00a333,000 for the economy. Over an average persons working

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