Extra cash for mental health would help UK more than new roads, study says
An academic investigation found that investing more money in mental health services would have a greater positive impact on the country’s economic growth and well-being than constructing new roads.
The London School of Economics (LSE) paper makes the case that Whitehall has to reconsider its approach to spending decisions and put more of an emphasis on how the money genuinely enhances people’s lives, especially in terms of wellbeing.
In an effort to persuade Rachel Reeves to prioritize funding for skills, health, and education over expensive transportation projects like the Lower Thames Crossing, researchers evaluated the cost-benefit ratio of policies in a number of departments.
Next month, the chancellor is expected to provide a budget and thorough expenditure review that will outline the government’s spending priorities for the ensuing five years.
It is anticipated that Reeves will make significant cuts to some Whitehall spending in order to adhere to budgetary restrictions left over from the previous Conservative government. Numerous significant road projects have already been shelved, notably the A303 tunnel that was supposed to run close to Stonehenge.
The LSE researchers evaluated the benefits of individual spending decisions in relation to their returns in terms of cash savings and money-equivalent well-being benefits.
They determined that specific funding for addiction and mental health programs would benefit those in need while also lowering the overall cost of welfare and health care and bringing money back into the public coffers as more people went back to work.
Additionally, they discovered that job help for individuals with moderate mental illness and psychological therapy services for addiction would pay for itself in two to three years.
Some programs, such as the promise to guarantee everyone’s entitlement to an apprenticeship, were found to generate benefits worth 14 times more than their costs, even though they were also found to increase overall government spending.
Similarly, they discovered that the benefits of having more police officers—a reduced crime rate—would outweigh their costs by a factor of ten when it comes to the welfare of the populace.
In contrast, an evaluation of road projects found that, on average, the advantages of a scheme only tripled the cost; by comparison, the benefits of the proposed Lower Thames Crossing, which would connect south Essex and north Kent, were estimated to be just 1.5 times higher.
One of the report’s authors, Richard Layard, stated that the savings from people returning to work earlier, claiming fewer benefits, and experiencing fewer health issues were worthwhile to prioritize because they lower the government’s overall costs.
Emeritus professor of economics at the London School of Economics and a former government adviser, Lord Layard, said that Keir Starmer’s pledge, made during his time as opposition leader, that “with every pound spent on your behalf, we would expect the Treasury to weigh not just its effect on national income but also its effect on wellbeing” served as the impetus for the report, Value for Money.
With backing from Amanda Rowlatt, a former top analyst at the Department for Transport, and former head of the civil service Gus O’Donnell, the report will be released on Tuesday at the think tank’s headquarters in central London.
According to Layard, the LSE team’s approach was modeled after the National Institute for Health and Care Excellence’s (Nice) cost-benefit analysis, which evaluates the value for money that new medications and treatments provide to the NHS.
“The next spending review should be based on benefit-cost ratios, as we now have the science to estimate for the majority of policies,” he continued.
“This is an extraordinarily important report,” stated O’Donnell. It ought to result in significant adjustments to the way the government spends our money to enhance lives.
