Restoring UK health to 2014 levels could add 2% to GDP, thinktank says
Research indicates that improving public health in the UK back to 2014 levels could boost GDP by 2% and generate a £72bn dividend for public finances.
Restoring the deteriorating health of the UK's population to the level of 2014 would boost GDP by 2% and generate a £72bn dividend for the public finances, according to a paper by the Health Foundation thinktank published on Sunday. The authors argue that good health should be valued as an economic asset, enabling people to live well longer and contribute to the economy.
They calculate that healthy life expectancy fell by two years in the decade to 2022-24, with the UK being one of only five of the world's 21 richest countries to see a deterioration. Over the same period, the number of working-age people with a long-term health condition rose from 11.7 million to 15.7 million.
The report also highlights stark inequalities: people living in the richest 10% of areas can expect up to 20 more years of good health compared with those in the poorest 10%.
Rising ill health increases NHS spending and disability benefit costs, but the Health Foundation points out that costs also include lost tax revenue and economic output when sickness prevents work. Their modelling suggests that reducing ill health to 2014 levels could increase economic output by £57bn, or 2% of GDP.
David Finch, interim director of health and inequalities at the Health Foundation, said restoring working-age health to 2014 levels could unlock £57bn in economic output and provide a £72bn boost to public finances through stronger tax revenues and reduced spending on social security and the NHS. He added that improving health is essential for delivering good growth in every postcode, which the incoming government's ambitions depend on.
Labour has put repairing the NHS at the heart of its plans, particularly promising to cut waiting lists. However, the Health Foundation argues that treating health as an asset would shift policymakers' focus towards prevention and public health measures, alongside treatment. The paper states that while improving health won't solve every economic challenge, it can play a critical role in strengthening economic performance, improving fiscal sustainability, and raising living standards.
Tackling ill-health and its impact on the labour force will be a pressing issue for incoming Prime Minister Andy Burnham. He is set to receive two reports in the autumn: from Alan Milburn on the 1 million young people not in education, employment, or training, many for health reasons; and from Stephen Timms on reforming disability benefits. Burnham has also prioritized addressing the social care crisis, potentially bringing forward the deadline for Baroness Louise Casey's commission, which is currently not due to report until 2028.
The Health Foundation's research echoes a recent warning from the Resolution Foundation thinktank that poor health has been as significant a factor driving the UK's tricky public finances as demographics. With much of the additional tax revenue from Rachel Reeves's two budgets going to the NHS, the Resolution Foundation noted that health-related spending now accounts for £1 in every £4 of government spending, excluding debt interest costs.
