The NHS aims to save £20 billion on existing activities in order to finance new activities. There is a strong case for extra spending in mental health, where there is massive unmet need and new treatments which are only beginning to be rolled out.

Mental illness is now nearly a half of all ill health suffered by people in Britain aged under 65, and accounts for 23 per cent of the total burden of disease. Yet, only a quarter of those experiencing mental health problems receive any form of treatment. Despite the existence of cost-effective treatments, mental health receives only 13 per cent of NHS health expenditure.

How mental health illness loses out in the NHS, a report from the ESRC Centre for Economic Performance, has examined the needs, costs and potential savings of an improved NHS mental health service.

Therapies such as Cognitive Behavioural Therapy lead to rapid recovery from depression or anxiety disorders in over 40 per cent of cases. If these therapies were more widely available, it would cost the NHS little because of the savings on physical healthcare. The cost would also be fully covered by savings on incapacity benefits and lost taxes.

The report shows that the Improving Access to Psychological Therapies (IAPT) six-year programme, which started in 2008, has markedly improved NHS treatment of mental illness. But in some areas the programme has not been followed up with the necessary expansion - with local commissioners even cutting mental health provision, despite receiving funding for IAPT roll-out.

Key findings

  • Among people under 65, nearly half of all ill health is mental illness.
  • Mental illness is generally more debilitating than most chronic physical conditions. Yet only a quarter of all those with mental illness are in treatment, compared with the vast majority of those with physical conditions.
  • Many mental health treatments show high clinical effectiveness, and compare favourably with treatment of physical illness in terms of cost-effectiveness.
  • More expenditure on the most common mental disorders would almost certainly cost the NHS nothing - mainly because the costs of psychological therapy are low and recovery rates are high. This applies much less to most other NHS expenditures.
  • Effective mental health treatment can also generate other large savings to the government. The IAPT programme is likely to have paid for itself through reduced disability benefits and extra tax receipts. Likewise, the costs of treating children for conduct disorder are almost certainly repaid in full through savings in criminal justice, education and social services.

Policy relevance and implications

  • The Government’s announced mental health policies should be implemented on the ground. Local commissioners have been given £400 million in their baseline budgets for 2011-14 to complete the national roll-out of IAPT – but many local commissioners are not using their budgets for the intended purpose.
  • The expansion of IAPT should continue for a further period after 2015, with a strong focus on therapies relevant to people with physical symptoms.
  • The Children and Young Person’s IAPT, launched in 2011, will need to continue for at least six years, to ensure that Child and Adolescent Mental Health Services (CAMHS) work follows NICE guidelines.
  • The training of GPs will need to change and include a rotation in an IAPT or CAMHS service.
  • Recruitment to psychiatry should be increased, if we are to properly handle the more complex cases of mental illness.