Money

Funding the NHS quadruples overall investment, new report reveals

A new report commissioned by the NHS Confederation has found the first direct correlation between investment in the NHS and the growth of the UK economy.

The analysis found that for every £1 invested in the NHS, £4 is made back through increases in productivity and boosted participation – upsides that are especially pertinent given the current state of the labour market post-COVID-19.

More than 200,000 people have left the labour market since the pandemic due to ill health and now a record-high 2.5 million people are inactive as a result of their long-term sicknesses – a fifth of adults aged between 50-65 who have left work are also on NHS waiting lists.

This new report shows how a 1% decrease in the proportion of workers inactive due to long-term illness is linked to an additional 180,000 people joining the UK’s workforce, as well as further demonstrating how increased investment in the NHS would mean a reduction in both A&E attendances and people reporting long-term sickness.

The NHS is the largest employer in England and is one of the main sources of employment in several towns and cities up and down the country, meaning the NHS’s economic contribution could be even more significant if the funding were provided to fill the 132,000 vacancies currently handicapping the health sector.

This, in turn, would mean that better healthcare could be delivered, which would slash waiting lists and enable those who have had a prolonged absence from work due to their health, the ability to return to the workforce.

NHS Confederation say that the analysis demonstrates how the “economic value of ensuring the NHS has enough funding to help keep local communities as healthy as possible goes above and beyond the range of services people receive in being able to access healthcare and sets out how the NHS is an investable proposition.”

Commenting on the findings, Matthew Taylor, chief executive of the NHS Confederation, said: “The Government’s priority is economic growth but that won’t be achieved unless it finds a way of boosting the numbers of people available to work.

“Over 200,000 people have left the labour market since the pandemic because of ill health, with a record high 2.5 million people who are now inactive due to long term sickness. The independent analysis we have commissioned shows that reducing the number of people not in work due to ill-health, bringing them back into the labour market, and growing investment in the NHS has a clear relationship with economic growth. This means that spending on the NHS should be regarded as an investment, not a cost. 

“This will require investment in the NHS to reduce the number of people languishing on waiting lists or experiencing other conditions that mean they can’t work. This analysis therefore debunks the myth that the NHS is a drain on public resources – in fact, it’s a key driver of labour productivity and wider economic activity. And as one of the largest employers across the country, the NHS often not only provides the main source of employment in many areas, but it also acts as a lifeline for local businesses.

“We encourage the new Chancellor to ensure investment in the NHS is not forgotten in his first fiscal announcement.  As this analysis shows, a pound invested in health results in £4 back in wider economic activity. That’s why we believe the NHS should be considered an essential building block of any national and local plan for growth.

 “This would give a significant boost to the UK economy at a time of ongoing challenges in labour market participation, widespread labour and skills shortages and set against a backdrop of the increasing cost of living.”

More information about the new analysis is available here.

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