Analysing the Budget: will it increase or decrease the prevalence of mental health problems in Britain?

10 July 2015

On Wednesday, the Chancellor George Osborne delivered the first fully majority Conservative Budget in 18 years. In contrast to David Cameron’s first speech post-election, this occasion saw very little mention of health. The Government reaffirmed its obligation to the NHS ‘Five Year Forward View’ by committing £8bn on top of the £2bn already pledged by 2020. This is a step in the right direction toward achieving parity between mental and physical health, however, many argue that it is an insufficient amount, including the Institute for Fiscal Studies (IFS).

The free childcare entitlement will be doubled from 15 hours to 30 hours a week for working parents of three and four year olds can only be seen as a positive move, removing a barrier to work for many parents. Access and support into appropriate work is good for our mental health, as the Government recognises “the workplace provides an important opportunity for people to build resilience, develop social networks and develop their own social capital”, and free child care is a key element enabling many parents to work. Moreover, free child care is likely to have a positive effect in the single most important determinant of mental health: poverty. Indeed, in the short term through supporting child care costs and enabling parents to work reductions in poverty are likely to be achieved.

However, there is concern in the significant cuts announced in the welfare bill - from reduced tax credits, reduced benefits for certain people claiming Employment and Support Allowance (ESA), the freezing of working-age benefits for a further four years and the lowering of the benefit cap. A wealth of evidence suggests that significant reductions in income, high levels of debt and poor housing can lead to lower well-being and resilience and more mental health needs. These measures are likely to put at further strain the mental health of a significant proportion of the population, according to the IFS changes to universal credit, cutting the amount workers are allowed to earn before their benefits start to be withdrawn, would cost 3 million families an average £1,000 a year. Meanwhile, we second Mind’s concern that changes to the ESA will negatively impact people with long term fluctuating mental health conditions and could hinder their ability to return back to work.

Moreover, earlier in July the four UK Children’s Commissioners raised concerns over austerity measures, given the effect that the benefit cap, the bedroom tax, benefits sanctions and other measures have already had on the household income for families already living in states of deprivation. The End Child Poverty Coalition review of evidence found that being born into poverty puts children at greater risk of mental health problems and for many, this will lead to negative consequences through their lives, affecting educational attainment and social relationships, and can be cumulative. In particular, a blanket removal of housing benefit for under 21s is only likely to result in more stress and anxiety for young people who are already vulnerable, such as young parents and looked after children, who at the age of 18 might end up without suitable permanent housing option.

Mental health problems cost the UK economy between £70 and £100 billion per year, making up 28% of all illnesses in the UK, and back in 2014, the Organisation for Economic Co-Operation and Development (OECD) warned that poorly designed welfare reforms could lead to greater financial and social costs in the medium to long-term. The OECD also highlighted the overlap between mental illness, disability benefit and the receipt of other social benefits – namely income support and housing benefit – and the importance of finding a careful balance between limiting welfare spending and supporting those most in need.

It is yet to be seen what the full implications of this budget will be on the mental health and wellbeing of the country, but the effect of cuts to welfare are likely to widen the inequality gap in society, affecting those already at their most vulnerable.