Mental Health and the UK Economy

March 2007

Oxford Economics 121, St Aldates, Oxford, OX1 1HB : 01865 268900, : 01865 268906 : www.oxfordeconomics.com

Mental Health and the UK Economy March 2007

Contents
Contents................................................................................................................................................. 2 1 2 Executive summary...................................................................................................................... 3 Introduction................................................................................................................................... 5 2.1 2.2 2.3 3 The brief................................................................................................................................. 5 Definition of mental health used in this study ........................................................................ 5 Report structure ..................................................................................................................... 5

Analysis of the growth in mental health incapacity.................................................................. 7 3.1 3.2 3.3 3.4 Incapacity Benefit claimant due to mental health problems .................................................. 7 Projections of Incapacity Benefit recipients due to mental health reasons ......................... 10 Mental Health Problems for those people in work ............................................................... 11 People in work projection..................................................................................................... 15

4

Evaluation of spending on mental health services................................................................. 16 4.1 4.2 Investment in mental health................................................................................................. 16 Charities’ role in mental health spending............................................................................. 19

5

Impact of government spending on mental health services ................................................. 20 5.1 5.2 5.3 5.4 Introduction .......................................................................................................................... 20 Costs of mental health treatment......................................................................................... 20 Labour market benefits of treatment of mental health problems ......................................... 22 Conclusion ........................................................................................................................... 26

6

Economic Benefit Analysis ....................................................................................................... 27 6.1 6.2 6.3 6.4 6.5 Introduction .......................................................................................................................... 27 Approach.............................................................................................................................. 27 Results ................................................................................................................................. 28 Comparisons with other studies .......................................................................................... 30 Conclusion ........................................................................................................................... 30

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Mental Health and the UK Economy March 2007

1

Executive summary

A substantial number of people in the UK suffer from a mental health illness… • 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. 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. 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.

• •

…affecting people in work as well as those out of work • 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…. • Investment in mental health was nearly £5 billion in 2005/06 and the real average annual growth rate since 2001/02 has been 5.8%.

…but the growth has lagged that of overall health spending over this period • 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). 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… • There are some evaluation studies that point to an improved labour market performance following increases in spending to tackle mental health problems.

…the cost of this support may not be substantial • • • 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. 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 £2,500. 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 • The value from a single person working for a full year, rather than claiming benefits is nearly £20,000 for the Exchequer and over £33,000 for the economy. Over an average persons working 3

Mental Health and the UK Economy March 2007 life this value could amount to over £530,000 for the Exchequer and nearly £900,000 for the economy. • • • • The economic benefits from an individual, of average age, reducing the number of sick days they take due to stress, anxiety or depression could amount to nearly £100,000 over their life time. It total, we estimate that mental health costs the economy over £10 billion, and exerts a negative drag on government finances of over £6 billion. The available evidence suggests that carefully targeted increases in government spending on mental health could bring net benefits to both the economy and Exchequer. Controlled, well designed evaluation studies should be undertaken to provide stronger evidence of the existence, and scale, of these net benefits.

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Mental Health and the UK Economy March 2007

2
2.1

Introduction
The brief

Oxford Economics has been commissioned to undertake a study looking at mental health and the UK economy. Specifically, the study investigates the recent trends in mental health incapacity, government spending on mental health services, and the benefits to both the economy and the Exchequer from supporting a representative individual to gain or retain employment rather than claim Incapacity Benefit. The report does not consider what policies or treatments would be required to achieve this aim although we do comment on some relevant studies in this area.

2.2

Definition of mental health used in this study

There are many problems associated with the term mentally ill, including the lack of any universal agreement as to the point at which normal behaviour becomes mental illness. This study considers 1 individuals with a range of mental health illness; from common health problems such as everyday stresses and bereavement, phobias and anxiety disorders to the more acute forms of depression, and illnesses such as schizophrenia. The final chapter, where we consider the benefits to the economy and Exchequer of supporting an individual with a mental health illness into work, is more relevant to former. However, in all sections of this report we have been constrained in our analysis by the definitions used in the published datasets that we have had access to. For example, in analysing people on Incapacity Benefit we have used Department of Work and Pensions (DWP) statistics where the closest definition of mental health is those individuals with “Mental and Behavioural Disorders”. When analysing those people in work we have used the Self-reported Work related Illness survey (SWI) published by the Health and Safety Executive (HSE), and this survey highlights people suffering from stress, depression and anxiety. Finally, when analysing spending statistics we have used data from the National Survey of Investment in Mental Health which collects data for spending on “mental health services”. We recognise that these data cover a broad, and in some cases differing, subset of people with metal health problems, but are constrained by the publicly available statistics.

2.3

Report structure

The report is structured as follows: • Section 3 analyses the characteristics of Incapacity Benefit recipients due to mental and behavioural disorders, and those people reporting work related illness due to stress, depression and anxiety. Section 4 contains an evaluation of investment in mental health services. Section 5 examines some of the literature on the impact of government spending on mental health services.

• •

Seymour and Grove (2005) define “Common Mental Health Problems” as those that: occur most frequently and are more prevalent; are mostly successfully treated in primary rather than secondary care settings; are least disabling in terms of stigmatising attitudes and discriminatory behaviour.

1

5

Mental Health and the UK Economy March 2007 • Section 6 discusses the benefits to the economy and Exchequer associated with removing barriers to work and enabling a representative individual to no longer claim benefits, or miss fewer days of work.

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Mental Health and the UK Economy March 2007

3

Analysis of the growth in mental health incapacity

Key Points • • • The total number of Incapacity Benefit recipients due to mental and behavioural disorder reasons in 2006 was roughly one million, representing 40% of total Incapacity Benefits recipients. To put this in perspective, there are a similar number of Incapacity Benefit recipients due to mental and behavioural disorder as there are Job Seekers Allowance recipients in the UK. In terms of the age profile of Incapacity Benefit recipients due to mental and behavioural disorder reasons; younger people are least likely to claim, and as people get older, the percentage of recipients within each age-group increases incrementally. The self-reported health related illness survey showed over ten million working days are lost due to stress, depression and anxiety in 2005/06. The professional occupations had the highest prevalence of stress, depression and anxiety while in terms of industry: public administration, education and health had the highest prevalence.

• •

3.1

Incapacity Benefit claimant due to mental health problems

For thousands of people with mental health problems their illness leaves them unable to work. If people are out of work for mental health reasons they can claim Incapacity Benefit – subject to restrictions. The Department of Work & Pensions (DWP) records all recipients, and we have made use of these statistics. In particular, our research has used the data indicating those receiving Incapacity Benefits due to mental and behavioural disorders. These data are broken down by sex, local authority, age and duration of claim. The time-series of these data are relatively short as details are only available on a consistent basis from 1999. However, some trends can be drawn from the data and will be discussed in this section. Figure 3.1: Incapacity Benefit recipients due to mental and behavioural disorders
000s 1,200 Mental & behavioural disorders (Female) Mental & behavioural disorders (Male)

1,000 800 600 400 200 0

Source : DWP

Figure 3.1 shows the level of Incapacity Benefit recipients for mental and behavioural disorders over the period 1999 to 2006. In general, the number of recipients has seen a fairly smooth increase since 1999 with the proportion of female recipients remaining larger than the proportion of male recipients. The annual growth rate for mental and behavioural disorders claims since 2000 is 5.4% with the male 7

9 2 0 9q3 0 2 0 0q1 0 2 0 0q3 0 2 0 1q1 0 2 0 1q3 0 2 0 2q1 0 2 0 2q3 0 2 0 3q1 0 2 0 3q3 0 2 0 4q1 04 2 0 q3 0 2 0 5q1 0 2 0 5q3 06 q1

19

Mental Health and the UK Economy March 2007 annual growth rate running at an average of 5.8% while the female growth rate was lower at 5.1%. This compares with an average annual growth rate of 0.8% for total Incapacity Benefit receipts. The total number of mental and behavioural disorders recipients in the second quarter of 2006 was 977,910. This represented 40% of total Incapacity Benefit recipients. This means that there are a similar number of Incapacity Benefit recipients due to mental and behavioural disorders as there are Job Seekers Allowance recipients in the UK. Figure 3.2: Age breakdown of mental and behavioural disorder and total Incapacity Benefit recipients
% 14

12 10 8 6 4 2 0

Mental & behavioural disorders Incapacity Benefit total

16-17 18-24 25-34 35-44 45-49 50-54 55-59 60-64 Source : DWP

The age breakdown of mental and behavioural disorder and total Incapacity Benefit recipients shows a clear trend. Younger people are least likely to claim, and as people get older a higher percentage of people claim. The largest group of recipients are those aged 55-59 years, with nearly 14% of the population claiming Incapacity Benefit – with around 4% claiming due to mental and behavioural disorders. The proportion of recipients then drops back for the 60-64 age group due to the lower retirement age for women. The rate of increase for total Incapacity Benefit recipients is far steeper than for Incapacity Benefit recipients due to mental and behavioural disorders suggesting that physical illness tends to increase with age whereas the rate of increase with age is much less pronounced for mental illness. Figure 3.3: Growth in Incapacity Benefits and JSA Recipients

annual % change
20 15 10 5 0 -5 -10 -15 2000q3 2000q4 2001q1 2001q2 2001q3 2001q4 2002q1 2002q2 2002q3 2002q4 2003q1 2003q2 2003q3 2003q4 2004q1 2004q2 2004q3 2004q4 2005q1 2005q2 2005q3 2005q4 2006q1 2006q2

Total Incapacity Benefit

IB claimants due to mental and behavioural disorders

Unemployment

Source : DWP/ONS

8

Mental Health and the UK Economy March 2007 The annual growth of Incapacity Benefit recipients due to mental and behavioural disorders reasons has been higher than total Incapacity Benefit recipients over the 1999-2006 time period. Interestingly, the gap does appear to be narrowing over time. There is no noticeable correlation between the growth/contraction in unemployment and Incapacity Benefit growth/contraction for the time period concerned. Figures 3.4 and 3.5 present the geographic spread of recipients once account is taken of population. Figure 4.3 shows the dominance of urban areas; Liverpool, Manchester and Glasgow all in the top ten. Figure 3.5 shows the data for Greater London where Islington has the highest proportion of recipients and Richmond-upon-Thames the lowest. Figure 3.4: Incapacity Benefit recipients due to mental and behavioural disorders per head of population

Sources: DWP, Oxford Economics

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Mental Health and the UK Economy March 2007

Figure 3.5: Incapacity Benefit recipients due to mental and behavioural disorders per head of population – London boroughs

Sources: DWP, Oxford Economics

3.2

Projections of Incapacity Benefit recipients due to mental health reasons

We have produced two projections to investigate how Incapacity Benefit recipients due to mental and behavioural disorders may change over the next ten years. The first projection is based on Government Actuaries’ demographic projections. They do not take into account government forecasts of spending, investment, or other possible economic shocks that may occur. By making use of the age projections we are seeking to capture the implications of an ageing population on Incapacity Benefit recipients. The second projection is based around stated government aspirations. These projections have been preferred to an extrapolation of past trends, partly due to the lack of robust time series data, but also as past growth may not be a good indicator of future trends. Some reasons for this are discussed in box 3.1. Box 3.1: The growth in UK disability recipients A recent paper by economists at the Bank of England “Health, disability insurance and labour force participation” highlighted how disability benefits can distort the labour market.

10

Mental Health and the UK Economy March 2007 The proportion of disability recipients can be due to both labour market conditions and the characteristics of the benefits themselves. In the 1990s in the UK the labour market saw a loss of over half a million working age men. This research suggests that this was due to the structure of the benefits system, with the generosity of the benefits system for long-term illness encouraging workers to leave the labour market. To put it another way, it was more beneficial to claim Incapacity Benefit than to work. The paper shows that during the 1990s the participation rate of prime-age males fell by 2.9%, but by only 0.7% between 1971 and 1989. In addition, the decline was more pronounced in occupations that had few formal qualifications. Indeed, for people with no qualifications the participation rate dropped 13% over the course of the 1990s. The research suggests that there is evidence to show that the decline in participation is almost exactly matched by a rise in disability benefit recipients, while over the same period there was no change in the number of inactive males who do not claim disability benefits. However, the authors propose that this type of out-flow from the labour market is unlikely to happen again, as since the early 1990s the generosity of disability benefits relative to unemployment benefits has fallen considerably.

Figure 3.6: Projection of Incapacity Benefit recipients due to mental and behavioural disorders
Incapacity Benefit recipients due to mental and behavioural disorders, 000s
1,100

1,000 900 800 700 600 500 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020

Demographic based projection

Government aspiration

Source : Oxford Economics/DWP

The blue line in Figure 3.6 shows our projection of how Incapacity Benefit claimants due to mental and behavioural disorders may grow over time given the likely changes in the age structure of the population. As can be seen, the growth is expected to be very modest, in-line with recent slower growth in claims. The red line indicates the type of path that Incapacity Benefit receipts due to mental and behavioural disorders would have to follow to meet the government’s aspiration, as announced in their Green Paper in January last year, “A new deal for welfare: empowering people to work”. Their aspiration is to reduce Incapacity Benefit recipients by one million over the next decade. Mental and behavioural disorders make up approximately 40% of the total Incapacity Benefit numbers.

3.3

Mental Health Problems for those people in work

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Mental Health and the UK Economy March 2007 Even if people have mental health problems that do not inhibit their ability to work their performance at work may suffer through time-off, lower productivity, or other associated problems. The main data source for people suffering from a work related illness is the Self-reported Health Related Illness (SWI) study published by the Health and Safety Executive (HSE). This has been surveyed as part of the Labour Force Survey. The survey covers a wide range of injuries and ailments although in this section we have made use of the statistics for stress, depression and anxiety. This part of the survey is broken down by age, region, occupation, and industry. The SWI data is comprehensive, but changes in survey structure, as well as sample size and timing of collection have meant that some of the data are not comparable. The data are comprehensive and comparable for 2001/02, 2003/04 and 2004/05. Before these data points the survey methodology and timing changed, but we do have some data available for 1990, 1995 and 1998/99 which are presented, with interpolated data, in Figure 3.7. Figure 3.7: Prevalence of SWI and Stress, Depression and Anxiety
Number of people reporting, 000s
2500 2000 1500 1000 500 0 1990

Self reported work related illness

Stress, depression and anxiety

1994

1998

2001/2002

2005/2006

Source : HSE

The prevalence of stress, depression and anxiety does appear to rise somewhat in the late 1990s, peaking at 557,000 cases in 2003/04 although some of the increase in the latter part of the last decade may be due to a different survey methodology being used. The overall number of people reporting SWI seems to have been trending upwards, although the data are quite volatile. The survey also reports the numbers of days lost and states that around twenty seven million days are lost annually due to self-reported work related illness, while over ten million are lost annually due to stress, depression and anxiety. This equates to around one day off per person per year for the former and under a half a day per person per year for the latter. To put this in perspective, the CBI 2 survey of workplace absence estimates that a hundred and sixty one million days are lost per year (6.6 days per employee) through all types of absence. Therefore, work related illness accounts for around a sixth of all absence.

2

CBI (2006). “Absence Minded, absence and labour turnover” 12

Mental Health and the UK Economy March 2007

Figure 3.8: Work related illness - working days lost
Working days lost 000s

35000 30000 25000 20000 15000 10000 5000 0 2003/2004 2004/2005

Total Stress, depression & anxiety

2005/2006

Sources : Oxford Economics/SWI

The CBI also reports the sectors with the highest absence levels, with transport & communications reporting the highest, followed by utilities and then banking, finance and insurance. Meanwhile, the regional breakdown of the report shows that Yorkshire and Humberside is the region with the highest absence followed by Wales. At the other end of the scale the two regions with the lowest absence are Northern Ireland and Greater London. Nevertheless, the CBI report is not used in detail in this study, as it doesn’t separate absence by reason, which is imperative for the purpose of this report. Figure 3.9: Prevalence of Stress, Depression and Anxiety by Government Region
% of population suffering stress, depression and anxiety % of workforce suffering stress, depression and anxiety

Scotland Wales South West South East London East West Midlands East Midlands Yorks & Humber North West North East 0.0 1.0 2.0

3.0

%

Source : HSE

Figure 3.9 shows two different indicators for the prevalence of stress, depression and anxiety in the latest year available - 2004/05. The purple bars show the prevalence of work related stress, depression and anxiety across the population and the blue bars show the data across the workforce. As can be seen, the data are fairly consistent across all regions with the exception of London, which has a lower prevalence of work related stress, depression and anxiety than any other region. 13

Mental Health and the UK Economy March 2007 One interesting aspect of the data is to look at the prevalence by occupation and by industry. Figure 3.10 shows the prevalence of stress, depression and anxiety by occupation. Each occupation’s caseload was divided by the employment in that occupation to give a percentage of stress, depression and anxiety in each occupation. Figure 3.10: Prevalence of stress, depression and anxiety by occupation
Skilled Trades Occupations Elementary Occupations Personal Service Occupations Process, Plant & Machine Operatives Sales & Customer Service Admin & Secretarial Managers & Senior Officials Associate Prof & Tech Professional
% of stress,depression and Anxiety in each occupation

%

Source : HSE

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5

As can be seen from the figure above, the professional occupations had the highest prevalence of stress, depression and anxiety (2.9%), followed by the associate professionals (2.4%). The lowest prevalence of stress, depression and anxiety was in the skilled trade occupations, whose prevalence was as low as 0.8%. The data on prevalence of stress, depression and anxiety can also be broken down by industry. Here again, the number of sufferers was divided by the numbers employed in each of the industries to give a more accurate measure of prevalence in each of the industries. Figure 3.11: Prevalence of stress, depression and anxiety by industry
Construction Other service Distribution, hotels & restaurants Manufacturing Transport & communication Banking, finance & insurance etc Public admin, education & health

% of stress,depression and anxiety in each industry

Source : HSE

0.0 0.5 1.0 1.5 2.0 2.5 3.0

%

The highest prevalence of stress, depression and anxiety is in the public administration, education and health category, which has 2.8% of its employees reporting to be sufferers. The figures may, in 14

Mental Health and the UK Economy March 2007 part, reflect the different culture and attitudes to stress, depression and anxiety within different sectors of the economy. In terms of the age and sex of the people reporting stress, depression and anxiety (in 2004/05), for the former, the highest prevalence per head of population is in the 45-54 year old age group. The age band with the lowest prevalence of stress, depression and anxiety is the over 55’s. Elsewhere, 45% of males and 55% of females reported stress, depression and anxiety in 2004/05.

3.4

People in work projection

To project the numbers reporting stress, depression and anxiety in the coming years we used Oxford Economics employment forecast by occupation. We have assumed that reporting stress, depression and anxiety is more likely to be a function of your occupation rather than the industry you work in. Therefore, the projections are based on the percentages of prevalence in each of the occupations combined with the forecasts of employment in each of these occupations. It must be noted that these are simple projections that do not take into account changes in government spending, treatment, incidence of mental illness, economic shocks, or other events that could change the projections. Figure 3.12: Projections of reported stress, depression and anxiety

000s
600 550 500 450 400 350 300 1999

Number of people reporting stress, depression and anxiety

2001

2003

2005

2007

2009

2011

2013

2015

Source : HSE/Oxford Economics

Figure 3.12 shows a sharp rise in reported stress, depression and anxiety in the early part of this decade, but in the past two years the numbers have fallen considerably. Based solely on the forecasts of employment in the nine different main occupations we may expect to see a gradual rise in reports of stress, depression and anxiety over the coming years, as employment shifts towards professional and service sector occupations where the prevalence of stress, depression and anxiety is reportedly higher.

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4

Evaluation of spending on mental health services

Key Points • • • The annual average growth rate for mental health investment has been 5.8% over the last five years; a slower rate than for the total health resource budget at 7.1%. In 2005/06 the growth rate for investment in mental health fell to 3.1%. The Healthcare Commission performance ratings (2004) showed that mental health trusts had the highest number of no star trusts; funding constraints were often cited as a reason for difficulties. The biggest proportion of mental health investment comes from clinical services which accounts for 22-26% of all direct service investment. The highest investment per head is in London with over £180 being spent per weighted head of population. Charities’ spending is a small proportion of total mental health investment accounting for around 2-5% of overall investment.

• • •

4.1

Investment in mental health

Key to the ‘health offer’ of mental health services is the investment in these services. It is important to assess whether the spending on mental health services has been in-line with other health service spending and Government spending in general. The main source for mental health spending/investment data used here is the National Survey of Investment in Mental Health Services (NSIMHS). This survey is carried out by Mental Health Strategies on behalf of the Department of Health. Figure 4.1 shows the level of reported mental health investment over the time-series available for these data (2001/02 to 2005/06). There has been a marked increase in mental health spending over the past few years with a slight dip last financial year. Figure 4.1: Reported mental health investment
£bn at 2005/06 price and pay levels
4.9 4.7 4.5 4.3 4.1 3.9 3.7 3.5 2001/02

Source : NSIMHS

2002/03

2003/04

2004/05

2005/06

16

Mental Health and the UK Economy March 2007 The national trend is fairly clear with more money being invested in mental health services. However, it is important to put this growth in the context of overall growth in government spending. Table 4.1 shows the average growth in government resource budgets (total and health) compared with mental health investment over the past five financial years. Table 4.1: Growth in Government spending, health and mental health investment (2001/02 to 2005/06) Average annual growth 5.8% 7.1% 4.1%

Mental health investment Health resource budget Total government resource budget Sources: NSIMHS, PESA, Haver

The main point that comes across from the Table 4.1 is that mental health investment has been growing at a slower rate than the total health resource budget. Indeed, the difference between the annual growth rates in the health budget compared with growth in mental health investment is around 1.3%. Nevertheless, mental health investment has been growing faster than the overall government 3 resource budget which in turn has been above GDP growth . However, there have been reports that the investment in mental health has not necessarily been reaching mental health services. Rethink, a leading mental health charity, published a report in May of 4 2006 suggesting that there have been budget cuts in mental health services across a number of regions in the UK. They provide anecdotal evidence that suggests that due to some overall deficits in healthcare trusts some mental health budgets, which were in surplus, have had to be cut to make up the shortfall. Furthermore, they detail £30m of cuts in over thirty areas across the UK. Indeed, according to the Institute for Public Policy Research and Rethink, the standard of mental health trusts is, on the whole, lower than average health trusts. As an explanation for the highest number of no star trusts in the Healthcare Commissions performance ratings for 2004, mental health trusts often cite funding constraints as causes for difficulties. This reported investment in mental health can be split into broad cost categories: direct, indirect, overheads, and capital charges. For the direct category we have a more detailed breakdown of how the investment is distributed, see Table 4.2.

3

Current price data on mental illness expenditure as a percentage of NHS spend indicates only a small fall from 8.46% in 2002/03 to 8.41% in 2005/06. Source: Audited summarisation schedules of primary care trusts. 4 Rethink (2006) “A cut too far: a Rethink report into budget cuts affecting mental health services.” 17

Mental Health and the UK Economy March 2007 Table 4.2: Planned real terms investment in direct service categories (£ million)
Expenditure by service category Communitty mental health teams Access and crisis services Clinical services including acute inpatient care Secure and high dependency provision Continuing care Services for mentally disordered offenders Other community and hospital professional team/specialists Psychological therapy services Home support services Day services Support services Services for carers Accommodation Mental health promotion Direct payments Personality Disorder Services Total 2001/02 2002/03 2003/04 2004/05 2005/06 483 526 530 570 549 170 203 254 316 369 764 754 811 878 838 330 376 474 621 661 349 372 380 404 384 35 33 53 43 38 52 50 47 67 86 125 142 143 149 142 59 63 70 108 91 178 163 172 156 151 37 47 43 43 43 10 11 15 18 19 301 315 369 366 362 6 3 3 2 3 6 3 6 3 2 1 4 10 2,905 3,061 3,371 3,748 3,748

Source: “The 2005/06 National Survey of Investment in Mental Health Services” prepared by Mental Health Strategies As can be seen from Table 4.2, the largest proportion of mental health investment is spent on clinical services including acute patient care, which account for 22-26% of all direct service investment. The second largest category in 2005/06 was secure and high dependency provision. Both these are targeted at sufferers of more severe mental health problems. Figure 4.2: Mental health spending by Government Office region per head of weighted population (2005/06)
South West South East London East West Midlands East Midlands Yorkshire and the Humber North West North East England
0 25 50 75 100 125 150 175 200 225

Source : Oxford Economics/NSIMHS £ per head of weighted population

Figure 4.2 shows areas of England ranked by the mental health investment they received per head of weighted population. The results show that the highest investment per head is in London, with over £180 being spent per weighted head of population. At the other end of the scale, the lowest is in the North West, where the spending was £137 per head of weighted population in 2005/06. The average investment across England was just over £150 per head of weighted population in 2005/06. 18

Mental Health and the UK Economy March 2007 4.2 Charities’ role in mental health spending

There are a number of mental health charities that provide key support to sufferers with mental health problems. Table 4.3, although by no means comprehensive, provides data for some of the key charities in the sector and their most recent expenditure as reported to the Charities Commission. Table 4.3: Mental health charities’ Expenditure Charity Rethink (National Schizophrenia Fellowship) Together working for wellbeing (Mental After Care Association) Mind The Sainsbury Centre For Mental Health The Mental Health Foundation Young Minds Sane Source: Charities Commission As can be seen from Table 4.3, three of the UK’s larger mental health charities (Rethink, Together Working for Wellbeing and Mind) have a combined expenditure of approx £80million, while the other four charities on this list bring the combined total to roughly £90 million. Obviously, this list does not include all of the mental health charities, but it does give some indication of the expenditure of mental health charities. To give some background on some of the larger charities in this list; Rethink (formerly known as the national Schizophrenia Fellowship) is the largest voluntary sector provider of mental health services in the UK. Rethink provides support to people with severe mental illness. Mind, meanwhile, provides an information and legal service nationwide and is one of the UK’s leading mental health charities. Finally, Together Working for Wellbeing (formerly known as the Mental After Care Association) provides community support, employment schemes, advocacy and assertive outreach. Year 2005/06 2004/05 2005/06 2004/05 2004/05 2004/05 2004/05 Expenditure £45 million £19 million £15 million £5 million £4 million £2 million £2 million

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5

Impact of government spending on mental health services

Key Points • • There is a small body of research that points to an improved labour market performance that result from increases in spending to tackle mental health problems. Our statistical analysis indicates that on average spending £2,500 on treatment enables someone with anxiety, depression or stress to feel well enough to start looking for and successfully obtain a job. However, given the range of conditions that can be described as a mental health related illness, ranging from anxiety to schizophrenia, the cost of supporting someone in work, or helping them return to work, will vary enormously. But there are, in particular, people with more common mental health problems that, with appropriate support, could make a valuable contribution to the economy and Exchequer.

5.1

Introduction

In this section we seek to assess the potential impact that additional government spending on mental health might have on incapacity in the work place. We are not medical experts and we do not attempt to medically assess individual programmes. Instead we review some of the existing evidence on the costs and labour market benefits of mental health treatments. The majority of the studies on the benefits from successful treatment focus on interventions to help those still in employment. Most focus on company-based initiatives abroad. To support the literature review, and to further investigate the impact of government spending on mental health on the numbers on Incapacity Benefit, we undertake an econometric study based on UK data between 2003/4 and 2005/6.

5.2

Costs of mental health treatment

The Department of Health publishes information on the average costs of numerous types of medical 5 procedures undertaken by the National Health Service . For example, the national average unit cost of inpatient adult rehabilitation is £240, and the equivalent unit cost for a psychologist’s domiciliary visit is £256. In practice, these data on average costs are only of limited use as most suffers of mental health problems are not treated in hospitals or secure units. It is only the most severe cases which receive this type of treatment. Moreover, those with the most severe problems are least likely to be assimilated back into the workforce. An alternative way of calculating an average treatment cost is to divide total expenditure by total number of treatments. Unfortunately, while information is available on expenditure plans (for example, Wanless (2002)), there is usually little publicly available information on what treatments this delivers. Although we have explored this method of calculating an average treatment cost, it has ultimately proved unsuccessful. Additional evidence for the costs of treatments can be gathered by considering some of the factors which are important for successful job retention or return to work for people with mental health problems. A summary of findings from a literature review conducted by Thomas, Secker & Grove are
5

Department of Health (2006), ‘NHS Trust and PCT combined reference cost schedules’ 20

Mental Health and the UK Economy March 2007 shown in table 5.1. Some of these solutions are not necessarily expensive and could provide 6 significant results, for example, providing vocational and mental health counselling . In addition, topics such as symptom management, building self-esteem and the employees’ perspective on their illness could also be addressed. Another important aspect of retention is communication; with communication between the employer and employee paramount in issues such as time off work, return to work plans, and in trying to keep all parties informed i.e. GP, employee, employer and linemanager. A case study undertaken in Avon & Wiltshire and published in The British Journal of General Practice showed that out of the thirteen clients who agreed to take part in a work retention scheme, seven retained employment with their original company and all seven cited the work retention team’s involvement in keeping their job or getting back to their job more quickly. Four managed to get new jobs that they felt were more appropriate and only two were still looking for work. Therefore, out of the thirteen only two failed to secure a job. Obviously, this is a very small sample, but it does indicate how vocational counselling, mental health interventions, and ongoing support at work can help people retain jobs or find more appropriate ones. Table 5.1: Summary of findings from Thomas, Secker & Grove literature review Barriers to job retention for people with mental health problems Overcoming the stigma of mental illness in the workplace and in the community Fear of disclosure Lack of awareness of one’s rights under the DDA Managing workplace adjustments without advice or support Managing one’s own stress and symptoms within the workplace Managing ongoing adverse reactions and events within the workplace Overcoming negative and low expectations of mental health providers Factors which are important for successful job retention and return to work for people with a mental health problem Promoting positive and realistic perspectives on mental illness and employment amongst individuals with mental health problems Considering the job satisfaction preferences of employees and job
7

Promoting healthy workplaces for all employees Facilitating natural supports in the workplace Providing supportive management/supervision and well-trained and

Promoting modified work programs facilitating workplace adjustments

Facilitating early intervention and minimal time off work

Source: Job Retention & Mental Health: A Review of the Literature (2002), Dr Tina Thomas Dr Jenny Secker & Dr Bob Grove In his paper presented at the No.10 Strategy Unit Seminar on Mental Health in January 2005, Layard (2005) uses a figure of a £1000 per patient for either ongoing drug treatment or sixteen sessions of cognitive behavioural therapy (including overheads). This figure is based on the National Institute for Health and Clinical Excellence (NICE) Guidelines on the treatment of depression. Although this is a
6 7

Thomas T, Secker J and Grove B (2002). Job retention & Mental health: A review of the literature Thomas T, Secker J and Grove B (2005). “Qualitative evaluation of a job retention pilot for people with mental health problems” The British Journal of General Practice Vol 55(516) pp546-547 21

Mental Health and the UK Economy March 2007 simplification, as treatment costs are likely to vary across type of mental health problems, severity of the problem and treatment or services types, it does provide an indication of potential costs for some services.

5.3 5.3.1

Labour market benefits of treatment of mental health problems Sufferers still in employment

Van der Klink, Blonk, Schene and van Dijk (2001) review the available academic evidence on whether treatment interventions have been effective in reducing work-related stress. They review forty eight studies undertaken between 1977 and 1996. Table 5.2 summarises the results of five interventiontypes aimed at reducing stress on seven outcomes. The ticks indicate statistically significant difference in the means between the group receiving the treatment and those who are not (at the 90%, 95% and 99% confidence intervals). The analysis suggests that treatments focused on the individual are more successful than organizational-based ones (e.g. changes in working patterns or loads). Of the three types of individual-focused treatments cognitive-behavioural approaches are found to be more effective than relaxation techniques and tend to be more effective than multimodal programs. Across all intervention types, the effect sizes found for the outcome categories (quality of work, psycho-logic responses and resources, physiology, complaints, and absenteeism) were all correctly signed. All the effect sizes were statistically significant at the 95% confidence level, except absenteeism. Table 5.2: Summary of the results from van der Klink, Blonk, Schene and van Dijk (2001) Organizational Quality of work Psychologic responses and resources Physiology Complaints - o/w symptoms - o/w symptoms Absenteeism
1 1

Cognitive Behavioural

Relaxation

Multimodal

Individual Focus

Anxiety

-

Depressive

,

and

indicate statistical ignorance at the 99%, 95% and 90% confidence interval.

The same authors found a stronger result for treatments’ impact on sick leave in a subsequent study. Van der Klink, Blonk, Schene and van Dijk (2003) looked at staff absenteeism due to mental health problems at Royal KPN (a firm employing 100,000 in the Netherlands which provides postal and telecom services). They found treatment by a form of cognitive behavioural therapy was successful in shortening sick leave duration. The size of the effects was a 25%-30% reduction in the duration of absenteeism compared with that of care as usual.

22

Mental Health and the UK Economy March 2007 Grime (2004) investigates the effectiveness of a computer-based cognitive behavioural therapy course ‘Beating the Blues’ on NHS and local authority staff in London who were absent for ten or more cumulative days due to stress, anxiety or depression in 1999 to 2000. Participants were randomly treated by conventional methods or conventional methods plus the computer based course. The patients undertaking the computer-based course were found to have significantly lower depression and negative attributional style scores at the end of treatment and one month later relative to those treated by conventional methods. The intervention group also had lower anxiety scores one month after treatment. Differences were not statistically significant three and six months post treatment. Fleten and Johnsen (2006) investigate whether a minimal postal intervention (a letter and questionnaire) had any effect on the length of sick leave of four hundred and ninety-five sick-listed people in Norway in 1997 and 1998. They find it led to a statistically significant reduction in the length of sick leave taken by those suffering from mental disorders. Schoenbaum, Unützer, Sherbourne, Duan, Rubenstein, Miranda, Meredith, Carney, Wells (2001) look at the cost-effectiveness of two quality improvement interventions to improve treatment of depression in primary care and their effects on patient employment. The study focuses on 1,356 patients with current depression attending primary care clinics in the US between June 1996 to July 1999. The first enhanced treatment increased average health care costs by $419 but resulted in 17.9 days more employment. The second improved technique cost $485 extra and 20.9 more days during the study period. Seymour and Grove in their review of evidence of the effectiveness of workplace interventions for 9 people with common mental health problems, find that a number of studies have strong evidence for the effectiveness of cognitive behavioural therapy (CBT). Layard (2005) calculates that over a two and a half year period, ongoing drug treatment or sixteen sessions of CBT (including overheads) can be estimated as roughly eight additional months free of depression (compared with no treatment). He assumes that the additional months free of depression could lead to two months additional work although this link between CBT and increased working months is assumption rather than evidence based. In the UK, the government have been implementing strategies aimed at reducing stress for employees in the public sector. The recent implementation of stress management standards have already led to a 3% fall in days lost due to stress related illness. There is also a view across all sectors of the economy that there is an important role for line managers to play in supporting staff, but it was important they received suitable Training, advice and guidelines packages. Box 5.1: Case study – Early intervention in the workplace “The two-stage approach incorporates an employee risk assessment, together with the need, in a smaller number of difficult cases, for psychosocial risk assessment and rehabilitation management, carried out by a counselling, health or clinical psychologist. …early intervention studies show that this two-phased approach has been successful in helping employees to remain in work and that there are significant financial benefits to be achieved from such a systematic process. The Royal and Sun Alliance introduced this approach to managing stress and other mental health absences in 2000.
8

8

‘Workplace Interventions for People with Common mental Health problems’ (2005), Linda Seymour, Bob Grove Grime (2004), Van der Klink (2003), Van der Klink (2001) and Barkham & Shapiro (1990) 23

9

Mental Health and the UK Economy March 2007 The evaluation of the programme, which was presented at the Chartered Institute of Personnel and Development, has highlighted significant financial and clinical success with benefits both for the employer and their employees. Early results have shown a 3:1 return on investment. Success was also reflected in the reduction of long-term sickness absence levels, and the satisfaction levels of staff, managers and HR. Psychosocial risk assessments were found to have facilitated the resolution of many of their complex long-term absence cases, with 37% of participants successfully returned to work. Cases where employees had not returned to work were resolved through resignation, redundancy, early retirement or termination on the grounds of capability. Clinically, these results demonstrate statistically significant reductions in levels of anxiety and depression within the participant group of employees.” Source: http://www.personneltoday.com/Articles/2005/07/01/29772/getting-back-on-track.html 5.3.2 Suffers on Incapacity Benefit

There is very little, if any, academic evidence on the impact of spending on mental health on the numbers of people claiming Incapacity Benefit due to mental and behavioural disorders. However, according to the DWP 90% of people moving onto Incapacity Benefit (IB) aspire to return to work, and of people with long term mental health problems who are economically inactive, 35% would like to get back to work, as compared to 28% for other health problems. Further, a Healthcare Commission survey of mental health service users found that 79% of respondents were not in work and that half of those that said they wanted help to get back to work did not receive that help. The results from a study , that analysed empirical evidence of the effectiveness of a scheme working to help hard to reach groups of people suffering with multiple deprivation return to the labour market, show that the scheme cost, on average, £1,289 per person with a success rate of 15% finding work. The actual figure may be far higher, but 25% of participants could not be traced, reflecting the difficulties of monitoring a large number of people. A condition management programme run in NHS Argyll and Clyde and its five council areas, where 79% of participants had mental health problems, helped 1,600 people into employment and brought about a 4.4% reduction in Incapacity Benefit recipients. Whilst no details were available to us on the cost of this programme it does demonstrate a significant labour market affect can be achieved. Box 5.2: Case study – Workplace programmes in Australia “In Australia, a steady increase in rehabilitation and return to work programmes led to the number of people returning to work increasing to 86% in 2003-04 from 83% in 2002-03 while the proportion of injured workers with employment as their main source of income has risen to 74% in 2003-04 from 69% in 2001-02. A cost-benefit analysis of Australia’s rehabilitation services in 2003 found substantial savings.” Source: Improving Health in the Workplace – December 2005, Association of British Insurers In order to supplement the existing research on the link between mental health spending and labour market affects we have undertaken some regression analyses. Specifically, we have looked at the impact of spending on mental health on outflows from Incapacity Benefit (where the recipients have mental or behavioural disorders). To undertake this task we collected data on the number of
10 10

The price of Exclusion, European Social Fund: a potential response for those furthest from the labour market 24

Mental Health and the UK Economy March 2007 Incapacity Benefit recipients due to mental and behavioural disorders, numbers employed, and numbers unemployed (claiming Job Seekers Allowance) in each local area in England between 2003 and 2006. Data are available from the Department of Health on expenditure on mental health by each primary care trust (PCT). We have mapped PCTs into local areas using the Office of National Statistics mapping data. Where a PCT spanned more than one local area’s boundaries and vice-aversa we have dropped this observation. This leaves us with data on 113 local areas over three years (or 339 observations in total). Figure 5.1 plots the relationship between spending on mental health services and outflows from Incapacity Benefit (due to mental and behavioural disorders). Each point on the chart represents a different geographical location in each of the three years for which we have data. The chart indicates a (weak) positive correlation between the variables. The available expenditure data is not ideal as most goes on services for severe mental health problems whereas those people with the higher likelihood of returning to work are those with less severe conditions who may need different interventions. However, despite the absence of an ideal data set, we have proceeded to explore the relationship between the spending data and off flows from incapacity benefit econometrically. This is discussed in greater detail below. Figure 5.1: Spending and outflows from Incapacity Benefit across all geographies
Spending on mental health (£ million) 180 160 140 120 100 80 60 40 20 0 -400 -300 -200 -100 0 100 200 300 400 500 600 700 Outflows from Incapacity Benefit by mental health claimants

We estimate Equation 1 using a linear fixed effects model . This seeks to explain the outflow from Incapacity Benefit of people with mental health problems in each local area, by spending on mental health, a measure for the growth of economic activity, and the fixed effects dummies. The coefficient 2 is expected to be positive, suggesting the greater the spending on mental health treatment in a county the more people will recover sufficiently to leave Incapacity Benefit and gain employment. The coefficient 3 is expected to be positive, as stronger economic growth in a locality should lead to greater employment opportunities increasing the potential outflow from Incapacity Benefit.

11

11

Outflows from Incapacity Benefit (due to mental health problems) are proxied by the change in stock of recipients (due in to mental health problems), since no outflow data has been forthcoming from the Department of Work and Pensions (DWP). We tried two proxies for economic activity (the annual change in the employment and unemployment). The change in employment was preferred as it appeared a cleaner measure of economic activity. The difference in those receiving Job Seekers’ Allowance may be contaminated by people switching between benefits to avoid screening. The local authority fixed effects may control difference in the health of the population (due for example to higher income or education levels, or a preponderance of former mining or heavy industry jobs). 25

Mental Health and the UK Economy March 2007 Equation 1

Outflows from IB due to mental healthit = β 1i + β 2 Spending on mental healthit − n +

β 3∆ Economic conditionsit −n + error
The results suggest spending an extra £1 million pounds on mental health would reduce the number of people claiming Incapacity Benefit due to mental and behavioural problems by 404 people. Or put another way, on average spending £2,500 on treatment enables someone with anxiety, depression or stress to feel well enough to start looking for and successfully obtain a job. The analysis does not indicate how long any individual stays in employment. The results should not be interpreted as a rule on the relationship between mental health spending and Incapacity Benefit recipients as how the money is spent and the severity of the mental health illness will be the determining factors. However, the results do provide some support to the anecdotal evidence discussed above that increased spending can help improve the employment prospects of people claiming Incapacity Benefit due to mental health reasons. This is likely to be particularly true for those individuals with less severe conditions.

5.4

Conclusion

This chapter presents evidence of the effectiveness of mental health treatments on helping people return to work, stay in work, or reduce the number of working days lost due to sickness. Clearly, given the range of illnesses that can be described as a mental health related illness, from anxiety to schizophrenia, the cost of supporting someone in work or helping them return to work will vary enormously. However, there are people with more common mental health problems who, with appropriate support, could make a valuable contribution to the economy. The potential value of this contribution is explored further in the next section.

26

Mental Health and the UK Economy March 2007

6

Economic Benefit Analysis

Key Points • • • The benefit from a single person working for a full year, rather than claiming Incapacity Benefit is, in total, around £20,000 for the Exchequer and over £33,000 for the economy. The benefit, from someone of average age, working the rest of their life is over £530,000 for the Exchequer and nearly £900,000 for the economy. The economic benefits from an individual of average age reducing the number of days that they are absent from work due to stress, anxiety or depression could amount to nearly £100,000 over their life time. It total, we estimate that mental health costs the economy over £10 billion and exerts a negative drag on government finances of over £6 billion. There are a lack of controlled, well designed studies evaluating the costs and benefits of programmes designed to improve the labour market prospects of those individuals with a mental health illness. However, the evidence that is available suggests that it is likely that there are ways in which carefully targeted increases in government spending could bring net benefits to both the economy and Exchequer.

• •

6.1

Introduction

This section of the report discusses the benefits associated with helping people with mental health problems retain or gain paid employment. The approach adopted is similar to that previously used by both Oxford Economics and the National Audit Office (NAO) in assessing the benefit to the economy and Exchequer from a number of schemes aimed at assisting disabled people back into 12 employment . When considering the benefits for the Exchequer from helping someone gain or retain paid employment included in the analysis are the reduction in the payment of welfare benefits, the tax revenue (income and National Insurance) earned from participants’ employment, the additional indirect tax (including VAT) from participants’ spending out of the extra income they receive in employment, and the additional tax paid by companies (including corporation tax and NI). For the economy as a whole, the NAO count the economic benefits as the increased income of those gaining jobs and the profits firms receive from the sale of their production. Clearly, the value of the benefits will depend on the length of time the person works; we present the results for one year, and also for the rest of an individual’s life.

6.2

Approach

12

National Audit Office VFM Report (2005), “Gaining and retaining a job: the Department for Work and Pensions’ support for disabled people Cost Benefit Analysis – detail” and “Gaining and retaining a job: the Department for Work and Pensions’ support for disabled people Cost Benefit Analysis – background”. 27

Mental Health and the UK Economy March 2007 Figure 6.1: Flow diagram summarising our approach

Exchequer benefits
Increase in employment

Economy benefits
Increase in employment /decrease in working days lost Increase GDP Economic multiplier and displacement

Increase tax – VAT, corporation, NI & income Decrease benefits – Incapacity Benefit and housing/council tax

In our analysis, for illustrative purposes, we have tracked the benefits that would accrue to the economy and Exchequer from one individual retaining work and another individual having a lower absence rate. We have assumed that both our individuals are of average age, thirty nine years old, and earn an average salary for someone of their age - £26,739, according to the Annual Survey of Hours and Earnings (ASHE). In order to calculate the welfare benefits our individual, let us call him Mr Smith, would receive from the government if he were to lose his job, we have based our analysis on DWP research. They show, approximately 33% of those receiving Incapacity Benefit also receive Housing Benefit and Council Tax Benefit. In order to calculate income tax and National Insurance (NI) receipts we have used current thresholds. To calculate the additional amount of indirect tax revenue flowing to the Exchequer we have assumed that Mr Smith saves 10% of his salary and spends the rest. To calculate the profits firms earn on participants’ production we have assumed, in line with the NAO, that 26.1% of the value of each employee’s salary accrues to the firm. The percentage comes from the DWP’s model. We have not only calculated the value to the Exchequer and economy today, but also over the rest of Mr Smith’s life. We have assumed no changes in taxation policy. Furthermore, we have assumed that any growth in earnings is offset by discounting of future benefits. We have assumed that whilst Mr Smith is working he is contributing to a private pension, and during retirement his private pension will mean he is not eligible for pension credit, although he will still receive his state pension. When considering our other representative person, let us call her Mrs Jones, missing fewer days work due to stress we calculate the value of her economic output per extra day in work. On average people with stress, anxiety or depression at work miss twenty-five days work a year.

6.3 6.3.1

Results Impact of gaining or retaining a job – Mr Smith case study

28

Mental Health and the UK Economy March 2007 If Mr Smith works for a full year rather than claiming Incapacity Benefit he will contribute an extra £19,600 to the Exchequer through paying tax and not claiming benefit. If Mr Smith stays in employment for the rest of his life, recall we assume he is of average age – thirty nine years old, then he will contribute an extra £530,000 to the Exchequer. Over this same period he will contribute £880,000 to the economy. Although the costs of supporting an individual with a mental health illness into work will vary enormously, those with more common mental health problems, who may be more easily supported, could generate considerable net benefits for both the Exchequer and the economy. Individuals with a more severe illness, who may be more costly to support, could also generate net economic benefits, in particular, once the benefits outlined in section 6.3.3 are included. Table 6.1: Summary of results: benefits Mr Smith Economic benefits from 1 years work Exchequer benefits from 1 years work Economic benefits from working for the rest of his life Exchequer benefits from working for the rest of his life £33,700 £19,600 £880,000 £530,000

6.3.2

Impact of missing fewer days of work – Mrs Jones Case Study

If Mrs Jones is treated effectively for her stress and no longer misses any days work then she will contribute an additional £3,500 per year to the economy and an extra £90,000 over the rest of her working life (recall we have assumed Mrs Jones is thirty nine years old). These benefits do not take into account some of the more subtle effects such as; higher staff turnover, family medical leave, and lower on the job productivity. Equally, they assume that the economic output is ‘lost’ when she is not at work. These figures demonstrate the large potential benefit to the UK economy from supporting sufferers of stress, anxiety and depression in being able to work throughout the year. Table 6.2: Summary of results: benefits Mrs Jones Economic benefits from fewer sick days in 1 year Economic benefits from fewer sick days every year for the rest of her life £3,500 £90,000

6.3.3

Other Impacts

There are a number of benefits that have not been quantified as part of this study. These additional benefits accrue to both the individuals concerned and society as a whole, and can be substantial. They include: Additional benefits to the Exchequer if either of our representative individuals has children or carers. Additional savings to the Exchequer if anyone supported into employment would otherwise have required government funded day care. 29

Mental Health and the UK Economy March 2007 Although not quantified as part of standard economic accounts, there may be considerable benefits even if people did not gain or retain paid employment, but instead undertook unpaid work (e.g. housekeeping). Additional benefits would accrue if the support given to people with mental health problems reduced premature mortality. Increases in an individuals well-being, happiness and quality of life. Increases in an individuals financial independence.

6.4

Comparisons with other studies

In this section of the report we have scaled up our results from our individual to consider the total benefits to the UK economy and Exchequer from reducing Incapacity Benefit recipients due to mental and behavioural disorders and eliminating working days lost due to stress, depression and anxiety. We have assessed the total benefits by assuming that recipients of Incapacity Benefit due to mental and behavioural disorders that have been receiving benefit for less than two years become employed at the same rate as the rest of the population, and those who have been in receipt for longer than two years become employed at a far lower rate. Further, in line with the other studies, we have calculated the benefit for a single year. Drawing comparisons with other recent studies of the economic and social costs of mental illness in the UK provides a useful cross-check on our estimates. There are two studies which have been carried out recently, which provide a good base for comparisons. The first is a report carried out by the Sainsbury Centre for Mental Health in 2003, called “The economic and social costs of mental illness.” The second, a report by Richard Layard called “Mental health: Britain’s Biggest Social Problem.” These two studies differ in exactly what they are attempting to measure, although both make some attempt at quantifying the costs of sickness and non-employment. As can be seen from the table below our estimates for non-employment and Exchequer benefits are approximately in line with these other studies. Table 6.3: Costs of mental health £ billion Economy - sickness Economy - non-employment Exchequer Sainsbury 3.9 9.4 N/A Layard 4 9.4 7 Oxford Economics 1.4 10.8 6.3

We believe that the reason that our ‘sickness’ estimate is much lower than the other studies is that the Sainsbury’s and Layard study use the lost days estimate from the CBI study which includes all types of illness scaled down to mental health whereas we use the work related illness figures which directly relate to mental health, and the numbers are much lower.

6.5

Conclusion

There are substantial benefits to both the economy and the Exchequer from helping people either gain or retain a job or miss fewer working days due to sickness. Evaluating whether these benefits out 30

Mental Health and the UK Economy March 2007 -weigh the costs will clearly depend on the details of the proposed medical intervention and the individuals concerned. And there are a lack of controlled, well designed studies evaluating the costs and benefits of programmes designed to improve the labour market prospects of those individuals with a mental health illness. We do not attempt such an evaluation as part of the study. However, our econometric analysis, and results from the research that does exist, indicates that it is likely that many schemes have been, or could be, of net value to both the economy and Exchequer. This will not be the case for all people on Incapacity Benefit due to mental health reasons. But, given the large numbers claiming - currently just under one million, of whom over 150,000 have been claiming for less than a year, along with the large number of people missing days at work due to stress, depression and anxiety - those with less severe illnesses, who are likely to cost less to support, are most likely to be beneficial to the economy and Exchequer. By spending in a targeted way the evidence suggests that small increases in spending could generate positive returns for the economy and Exchequer. Whilst the focus of this section of the report has been on the monetary benefits to the economy and Exchequer we also recognise the strong arguments for providing employment opportunities to everyone. The quote below, from Dr Bob Grove, Director of the Employment Programme, at the Sainsbury Centre for Mental Health, points out the crucial role the benefits system plays in this process. “In the right circumstances and with the right support almost anyone who wants to work is employable. The keys are hope and self-belief. For those who are deemed to be unemployable this will in effect say to them that they can abandon all hope of a normal life. It is vital that everyone is aware of and has access to employment support and the hope that this represents. Many severely disabled people, including those with severe mental health problems, have excellent employment 13 records. It is vital that the benefits system offers hope, support and belief to everyone.”

13

http://www.scmh.org.uk/80256FBD004F6342/vWeb/pcKHAL6NYK8N 31

Mental Health and the UK Economy March 2007

References
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Mental Health and the UK Economy March 2007 Van der Klink, J J L, Blonk, R W B, Schene, A H, and van Dijk, F J H, (2001), ‘The benefits of interventions for work-related stress’, American Journal of Public Health, Volume 91, No 2, pages 270-276. Van der Klink, J J L, Blonk, R W B, Schene, A H, and van Dijk, F J H, (2003), ‘Reducing long term sickness absence by an activating intervention in adjustment disorders: a cluster randomised controlled design’, Occupational Environmental Medicine, Volume 60, pages 429-437. Wanless, D (2002), ‘Securing our future health: Taking a long-term view’, Final Report, April.

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