A recent study by the London School of Economics (LSE) reveals that investing additional funds in mental health services would significantly boost the UK’s economic growth and national wellbeing, outperforming the benefits of new road infrastructure.
The LSE report argues for a shift in government spending priorities, urging policymakers to focus on investments that directly enhance people’s lives, particularly in health, education, and skills development. The findings are intended to influence Chancellor Rachel Reeves ahead of the upcoming budget and comprehensive spending review, where critical spending decisions for the next five years will be made.
The research highlights the cost-effectiveness of targeted mental health and addiction services, which not only improve individual wellbeing but also reduce overall public expenditure. By helping individuals recover and re-enter the workforce, these services generate economic returns, with some interventions expected to pay back within two to three years.
The analysis contrasts these high returns with those from road projects, which the study finds to offer lower benefits relative to their costs. For instance, the proposed Lower Thames Crossing, linking north Kent and south Essex, is estimated to deliver benefits worth only 1.5 times its cost, compared to mental health initiatives that could yield significantly higher returns.
Lord Richard Layard, one of the report’s authors and an emeritus professor of economics at LSE, emphasized that prioritizing mental health could lead to substantial savings by reducing healthcare costs and benefit claims. He noted that the report was inspired by Keir Starmer’s commitment to consider the impact on both national income and wellbeing for every pound spent by the government.
The report, titled “Value for Money,” will be presented at the Institute for Government in London, supported by prominent figures including former civil service head Gus O’Donnell. The findings call for a more strategic use of public funds to maximize societal benefits.
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