UK needs to tackle high cost of mental-ill health, says OECD


10/02/2014 - Mental health issues cost the UK around GBP 70 billion every year, or roughly 4.5% of GDP, in lost productivity at work, benefit payments and health care expenditure. Better policies and practices by employers and the health system are needed to help people deal with mental health issues and get back to work, according to a new OECD report.


Mental Health and Work: The United Kingdom says that around one million claimants on Employment and Support Allowance (ESA), and as many on Jobseeker’s Allowance (JSA) and other working-age benefits, have a mental disorder such as anxiety and depression that is hurting their prospects of finding work.


Acting early is the best way to prevent poor mental health leading to benefit dependency, both when people are still at work and early on during the sick-leave period, the report argues. Retaining a job is easier than finding a new one. Up to 370,000 Britons move onto disability benefit every year (1% of the working-age population), the highest rate in the developed world and twice the OECD average. The leading cause for such benefit claims is mental illness, now accounting for around 40% of all new claims.


Some of the recent UK welfare reforms designed to tackle stubbornly high disability benefit caseloads go in the right direction. However, further improvements are needed to ensure that reforms live up to their promise to bring people into work. If welfare cuts are to be made, they need to be matched by increased efforts to address the barriers to finding and remaining in work, says the report.


The new Work Programme is struggling to place ESA and JSA claimants with mental health problems into work. People with a mental illness continue to fare badly compared to their counterparts without such illness: their unemployment rate is more than double the overall rate; and the risk of falling below the poverty threshold is almost double the overall risk.  Indeed, the risk of poverty among people with mental health problems is the highest in a comparison of ten OECD countries including seven other European countries, Australia and the US.


The majority of benefit claimants with mental health problems need a combination of health and employment interventions to improve their chances of finding a suitable job. The health sector has increased services, so that access to common mental health treatments is much better than it was five years ago, but waiting lists are still too long in some parts of the country. Positive changes are also taking place to inform general practitioners about common mental disorders and return-to-work issues, but more systematic action in dealing with workplace matters is needed through a revised training curriculum.


The OECD recommends that the UK authorities:

  • Ensure that the new Health and Work Service, announced to start in 2014, is implemented quickly and universally, with a strong focus on mental health and those still in work and with much stronger involvement of employers.
  • Increase the attention to mental health and its impact on employability and work capacity in all parts of the welfare system.
  • Increase resources and refine financial incentives for employment service providers to ensure better employment outcomes for customers with mental health problems.
  • Build on recently improved integration of health and employment services to make sure that integrated health and employment interventions for those with mental health issues are widely available.
  • Further expand access to psychological therapies for those with a common mental disorder.


For further information, journalists should contact Shruti Singh, the author of the new OECD report (tel. + 331 4524 1948) or Spencer Wilson from OECD’s Media division (tel. + 331 4524 8118). For a copy of the report, journalists should contact [email protected].


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