A new report from the Health Foundation thinktank reveals that restoring the deteriorating health of the UK's population to 2014 levels could boost GDP by 2% and generate a £72bn dividend for public finances. The paper, published on Sunday, argues that the nation's health should be valued as an economic asset by policymakers.
Health as an Economic Asset
The authors state: "Good health enables people to live well for longer and contribute to their communities, helping to build a stronger society. A healthy labour force is also the engine that powers our economy – it determines whether people can participate in employment, how effectively they work and how long they remain in the labour market."
Between 2014 and 2022-24, healthy life expectancy fell by two years, 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 increased from 11.7 million to 15.7 million.
Stark Inequalities
The report highlights significant inequalities: people in the richest 10% of areas can expect up to 20 more years of good health compared to the poorest 10%. Rising ill health increases NHS spending and disability benefit costs, but also leads to lost tax revenue and economic output when sickness prevents people from working.
The Health Foundation's modelling suggests 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 the nation's working-age health to 2014 levels could unlock £57bn in economic output and provide a £72bn boost to the public finances through stronger tax revenues and reduced spending on social security and the NHS."
Policy Implications
Finch added: "Improving health is essential to deliver the good growth in every postcode on which the incoming government's ambitions will depend." Labour has made repairing the NHS a central plank of its government plans, particularly reducing 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 report states: "Improving people's health will not solve every economic challenge, nor is all ill health preventable. But it can play a critical role in strengthening economic performance, improving fiscal sustainability and raising living standards."
Political Context
Andy Burnham, the incoming prime minister, will face pressing issues regarding ill health and its impact on the labour force. 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 tackling 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 that poor health has been as significant a factor driving the UK's 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.
