Long-term sickness has made economy 10pc smaller

Telegraph

10-06-2025

The long-term sickness crisis means Britain's economy is 10 per cent smaller than it otherwise would be, according to a report produced for the NHS.
Tackling ill-health, increasing employment rates and preventing premature deaths by making better use of innovation in the health service would give Britain a £246 billion boost – equivalent to around a 10th of GDP – according to research by Frontier Economics, a consultancy firm.
Wes Streeting, the Health Secretary, hailed the 'landmark study' as evidence of what the NHS could achieve 'if we harness the massive potential at our fingertips'.
It comes as Rachel Reeves, the Chancellor, is set to gamble on the NHS to boost growth in this week's spending review, with a £30 billion funding uplift at the expense of other public services.
This equates to an around £17 billion real-terms increase over the next three years and comes after a £22 billion rise was announced in October, with Sir Keir Starmer having pinned the success of his premiership on eliminating the 7.42 million NHS backlog.
The new research found the 'size of the prize' for getting the 4.2 million unemployed people with long-term sickness back into work would increase GDP by £125 billion alone.
It further found that reducing the number of sick days employees take, in particular those on long-term sick leave from work, would provide an extra £45 billion.
It said that 'reducing long-term absences by 20 per cent would be worth nearly £10 billion', for example.
The remainder of the economic benefits came through delaying the 132,000 early deaths that occur to working-age people each year because of preventable diseases such as heart attacks, increasing the hours of people who work part-time because of a 'work-limiting health condition', and reducing the 'in-work productivity' lost to sickness.
It means the 'total productivity impact of reducing ill-health on the UK economy is up to £246 billion', which equates to '9.62 per cent of GDP', the researchers said.
The study, commissioned by the Health Innovation Network, which includes NHS and health industry leaders, said there were four major causes of sickness impacting the health service and driving worklessness.
These were mental health, which alone accounts for almost £50 billion in lost productivity, musculoskeletal conditions such as arthritis and back pain, heart disease and lung-related conditions.
Simple measures to identify and treat high cholesterol and high blood pressure, for example, could add more than £2 billion to the economy, it said, which could include treating more people with cheap statins sooner.
It also found potential productivity gains increased to £278 billion if the UK could reduce sickness and absence among the NHS workforce and increase the amount of foreign investment.
It said the UK was lagging behind France and Germany when it comes to research and clinical trials, as well as the number of skilled workers and pharmaceutical employees.
Mr Streeting said: 'We often talk about the challenges associated with health care in this country, but this report shows there are lots of opportunities too if we harness the massive potential at our fingertips.
'The NHS is uniquely placed to take advantage of innovation, and this landmark study reveals the prize on offer – potential benefits worth £246 billion annually and the ability to free up 233 million hours for our NHS workforce, proving that health innovation isn't just good for patients, it's vital for our economy and the taxpayer.
'By focusing on key conditions like mental health and cardiovascular disease, and embracing AI, telemedicine and genomic research, we can improve patient outcomes while creating high-skilled jobs and attracting global investment.'
He said the findings of the research would 'help inform our mission to build a health service that delivers for patients and contributes to a stronger economy'.
One of the key health issues driving increases in heart disease, cancer and joint and bone conditions is obesity.
A new trial revealed by The Telegraph last year is examining whether weight-loss jab Mounjaro can reduce unemployment and workplace absence levels in Greater Manchester.
That study, led by Health Innovation Manchester and pharmaceutical firm Lilly, is part of plans to explore how to reduce the £3.2 billion impact of obesity on Manchester's economy.
Professor Ben Bridgewater, chief executive of Health Innovation Manchester, said: 'There is so much potential for health innovation to make lives better for people, save the NHS money and increase the country's workforce productivity.
'We know that the massive impact innovation in obesity can make for the people and economy of Greater Manchester. We are excited about this new report that quantifies just how large an opportunity exists nationally from innovation in health care.'
The new research paper, called Defining the Size of the Health Innovation Prize, also said that as ill-health is predicted to increase with time, the potential productivity gains from preventing it and keeping people in work increases too.
The researchers estimate by 2035 the GDP lost to ill-health - as things stand - will be between £283 billion and £332 billion.
Matthew Taylor, chief executive of the NHS Confederation, said the report showed what could be achieved, but that 'more needs to be done to fully realise the potential of innovation' and that NHS leaders had told them 'a lack of time, funding that supports long-term implementation and scaling along with inadequate infrastructure is limiting their ability to seek new ideas and embed at scale those already in the system'.
He said innovation 'needs be managed in a way that works for those working across the NHS' and would 'require a skilled digital and innovation team and a wider workforce to support adoption' and appropriate infrastructure.