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Costing Young Minds: The fiscal consequences of a lack of spending on young adult mental health

This research paper written with methodological support from Mark Connolly, PhD, and Nikos Kotsopoulos, together with a foreword by Norman Lamb, Chair of the Children and Young People’s Mental Health Coalition (CYPMHC), investigates the lost tax contributions to the government from a lack of earlier investment in the prevention of mental ill health in young adults. The research covers the United Kingdom.

The pioneering research compares tax contributions from depressed and non-depressed groups of young people and the effect of having depression on an individual’s employment outcome, usage of health services, receipt of disability benefits, and likelihood of premature mortality. The report defines net tax contributions as the total value of taxes paid to the government minus government expenditures, including both direct taxes (Income Tax, National Insurance Contributions, and council tax) and indirect taxes.

With evidence already emerging that young people have been affected most by the economic damage done since the country went into lockdown due to COVID-19, this paper sends a strong policy message that the government should increase, not decrease, funding of mental health prevention in young people, when the bill for COVID-19 comes to be settled.

Key findings:

  • Having depression between the ages of 16 to 40 years old amounts to a fiscal loss of around £2.9 billion per cohort
  • Which is equivalent to £37,000 in lost net tax contributions for each young adult with depression
  • The research estimates that the government could fund 35 ten-session courses of cognitive behavioural therapy (CBT) for EACH depressed person using the amount of money it is losing in net tax contributions.
  • By increasing spending on depression earlier in life, in a way that halves the size of the impact that depression has on the likelihood of becoming NEET, the government could retrieve lost net tax contributions of £1.74 billion per cohort.
  • Norman Lamb comments, “I have seen first-hand some decision-makers’ reluctance to embrace prevention. But the evidence is clear: if a Government’s goal is to allocate resources as effectively as possible, there is no better deal than preventing mental health problems occurring and worsening.”

On average, people with depression throughout adulthood are four times more likely to fall into NEET status (not in employment, education or training) than the non-depressed population. Fifty percent of all mental health disorders start by 14 years of age, and 75% by 24 years of age. Twenty six percent of children referred to specialist children’s mental health services were rejected in 2018/19. Furthermore, children had to wait an average of two months before treatment commenced in 2019, with some children actually removed from waiting lists during the COVID-19 crisis, such as those under the care of Norfolk and Suffolk NHS Foundation Trust.