IPPR - Revealed: 8bn hit to UK prosperity as long-Covid and illness drives 400,000 more people from the workforce

From: Think Tanks
Published: Wed Apr 27 2022

Lack of government action to improve nation's health is holding back UK economy' according to report launching new cross-party IPPR Health and Prosperity Commission

Launch report reveals huge economic potential' of taking bolder action to tackle burning health inequalities' that limit lives and livelihoods

A new IPPR report, published to mark the launch of a new Commission on Health and Prosperity, warns that the UK's deep health inequalities and ineffective policies mean people are living shorter lives, with more years spent in poor health, and face greater barriers to staying in and getting on at work.

New IPPR analysis shows that there are now more than a million workers missing from the workforce compared to the pre-pandemic trend and about 400,000 of these are no longer working because of health factors, such as long Covid, disruption to health care and declining mental health. Unresolved, this will drag down economic activity this year by an estimated 8 billion, the researchers warn.

The report shows that the relationship between health and the economy goes much further than just keeping workers away from their jobs, it is also a decisive factor in the UK's terminally low productivity, low growth, and vast regional inequalities.

New analysis by IPPR and leading health analytics company Lane, Clark & Peacock (LCP) shows that health and the economy are two sides of the same coin:

  • Health and regional inequality - People living in the most economically deprived parts of the country - including Blackpool, Knowsley and Barking & Dagenham - can on average also expect to fall into poor health in just their late 50s, five years earlier than the national average and 12 years sooner than people living in the healthiest area in the country, Wokingham. This is largely down to factors like low quality housing, bad jobs, low wages and chronic stress, the report argues.
  • Health and productivity - Local level analysis reveals that someone living in North East Lincolnshire can expect to fall into bad health eight years earlier than the UK average, while the output of their work is also valued at 8 less an hour than the average. The report argues this is a vicious cycle - factors like lack of job opportunity and poverty can harm people's health; in turn, poor health can undermine people's work and a place's productivity.
  • Health and poverty - If rates of child poverty and unemployment in the unhealthiest local authorities (e.g. Blackpool, Kingston upon Hull, Stoke) met rates in the healthiest local authorities (e.g. Windsor & Maidenhead, Wokingham, Richmond upon Thames, we would see 430,000 less children in poverty and 420,000 more adults in work.

To remedy this injustice, IPPR calls for a new post-pandemic approach to the nation's health to ensure people can enjoy living healthy lives longer and to heal the nation's fractured and anaemic economy. The think tank is launching a new cross-party Health and Prosperity Commission to explore how good health can be the foundation for a fair and prosperous economy.

The researchers argue that for too long politicians have treated spending on health as a cost to be contained, rather than as a keystone of a thriving, prosperous economy.

Huge economic potential

New modelling by IPPR shows the economic potential that decisive government action to improve health could bring:

  • Levelling up - If health standards in all local authorities were brought up to be at least in line with the healthiest 10 per cent of places, we would see gross value added per hour worked increase by 1.5 per cent - or 46 pence per hour worked, by each worker, on average. Given the UK's stagnant productivity growth, this would be a major increase. The most significant productivity gains would be seen in places like Blackpool (3.9 per cent boost to GVA/hour worked), Kingston upon Hull (3.8 per cent) and Inverclyde (3.7 per cent).
  • Boosting the national economy - In the 1960s, Japan was the least healthy G7 nation, but is now the healthiest. If the UK met the health outcomes of Japan, people would stay in good health for four additional years on average. As a result, the UK's overall productivity could be boosted by 1.2 per cent.

The UK's poor health outcomes and unequal stagnant economy are not inevitable, or the result of anything innate about the country or its people, but the result of policy choices, according to IPPR. Policy makers must now set about putting the building blocks of good health in place - good work, quality housing, local public health services, a well-funded and staffed NHS - to improve people's lives and wellbeing, and to unlock the UK's full economic potential.

The IPPR Health and Prosperity Commission, chaired by leading surgeon Lord Ara Darzi and former chief medical officer Dame Sally Davies, will now work for two years to better understand the interconnections between health and the economy and to set out a blueprint to harness the full potential of better health for all. Other members of the cross-party commission include Greater Manchester Mayor Andy Burnham and former chancellor of the Duchy of Lancaster Sir Oliver Letwin, along with senior figures from health, business, economics, and trade unions (full list of commissioners in notes).

Dame Sally Davies, former Chief Medical Officer and co-chair of the Commission on Health and Prosperity, said:

A fairer country is a healthier one, and a healthier country is a more prosperous one. While the restrictions have eased, the scars of the pandemic still remain deep on the nation's health and our economy. Not only are we facing a severe cost of living crisis, driven in part by pandemic induced inflation, we're also experiencing a workforce shortage driven by poor health that's holding back the economy. It has never been more important to put good health at the heart of our society and economy - and our commission will bring forward a plan to do just that.

Lord Ara Darzi, a leading surgeon, independent peer and co-chair of the Commission on Health and Prosperity, said:

As we begin to emerge from the pandemic, we find ourselves at a crossroads. We can continue with a trajectory of poor health, low public investment, and poor growth. Or we can commit to driving a rapid improvement in total health and, in turn, leverage that health for greater prosperity and security. The commission will represent a broad coalition from health and care sector leaders, to economists, business leaders, politicians and scientists to demonstrate the wellbeing and massive economic benefits of better health for all.

Chris Thomas, head of the Commission on Health and Prosperity, said:

As the government moves to a living with Covid' strategy, politicians must not forget how intrinsically linked our health is to our economic fortunes. Policymakers can take immediate steps to make it easier for people dealing with long-Covid and other health complications back to work, but they must also take decisive action to improve our health overall and tackle our nation's burning health and economic inequalities. An unthinking return to the status quo would be a grotesque injustice to all who have lost their lives and livelihoods. We must build back better.

Andy Burnham, Mayor of Greater Manchester and member of the Commission on Health and Prosperity, said:

Good health is at the heart of a just society. One of the fundamental beliefs of the British public is that everyone should have access to good health, irrespective of their means and location. But currently we see grave inequalities in health and opportunity across the country. Good health must be built into all the places people live across the whole country and communities must be supported to take greater control of their health and wellbeing. By doing this health can be the foundation of a just and equal economy.

Sir Oliver Letwin, former cabinet member and member of the Commission on Health and Prosperity, said:

Historically, Britain has succeeded economically when it has combined innovative technology with improvements in public health. The Victorians made huge investments in sanitation and public health partly as a way of promoting social justice, but also as a way of boosting productivity. It is time to rekindle that spirit and deliver a new era of better health, greater health equality and greater prosperity.

IPPR experts are available for interview on request


Robin Harvey, Senior Digital and Media Officer: 07779 204798 r.harvey@ippr.org


The IPPR paper, Health and prosperity: Introducing the Commission on Health and Prosperity by Chris Thomas, Carsten Jung, Rachel Statham, Dr Parth Patel, Harry Quilter-Pinner with analysis from Jonathan Pearson-Stuttard, Dr Danielle Robinson and Dr Rebecca Sloan from LCP, will be published at 0001 on Wednesday 27 April. It will be available for download at: http://www.ippr.org/research/publications/health-and-prosperity

Figure 2.1: Local Authority areas with the highest incomes in England were also those that ranked highest on health outcomes

Commission membership:

  • Lord Ara Darzi (co-chair) Paul Hamlyn Chair of Surgery, Imperial College London; former health minister
  • Dame Sally Davies (co-chair) Master of Trinity College Cambridge; former CMO
  • Andy Burnham, Mayor of Greater Manchester; former Secretary of State for Health
  • Sir Oliver Letwin, Former Chancellor of the Duchy of Lancaster; former Shadow Chancellor
  • Professor Anne Case, Alexander Stewart 1886 Professor of Economics and Public Affairs, Princeton University
  • Simon Wren-Lewis, Professor of Economics, University of Oxford
  • Kieron Boyle, CEO, Impact on Urban Health
  • Matthew Taylor, CEO, NHS Confederation; former head of the Number 10 Policy unit
  • Carys Roberts, Executive Director, IPPR
  • Professor Clare Bambra, Professor of Public Health, Newcastle University
  • Professor Donna Hall, Chair, New Local; Former CEO of Wigan Council
  • Marie Gabriel CBE, Chair, NHS Race and Health Observatory
  • John Godfrey, Corporate Affairs Director, Legal & General; Executive Chairman, Business for Health; former Head of Policy, Number 10
  • Christina McAnea, General Secretary, Unison
  • Dr Halima Begum, Chief Executive, Runnymede Trust
  • Jordan Cummins, Director of Health, CBI
  • Kamran Mallick, CEO, Disability Rights UK
  • Dr Fiona Carragher, Director of Research, Alzheimer's Society; former deputy Chief Scientific Officer, NHS England
  • Dr Charmaine Griffiths, CEO, British Heart Foundation
  • Sophie Howe, Future Generations Commissioner, Wales
  • Jonathan Pearson-Stuttard, Head of Health Analytics, LCP; Chair Elect, RSPH
  • Tom Kibasi, SVP, Strategy, Flagship Pioneering

The missing workforce methodology: The values of missing workers refer to the difference to what inactivity and employment would have been if the five-year pre pandemic trend would have continued, following the methodology of IES (2022). This is combined with ONS statistics on reasons for labour force inactivity and an ONS survey on reasons for retirement. We connect this to the OBR's March 2022 estimate for how large the economic scarring from a smaller labour force is.

The productivity gains from a healthier country methodology: We estimate the productivity impact of a healthier workforce based on the regression results of Bambara et al (2018) who provide an estimate for the impact of reduced morbidity on GVA per head. To do so, for the Japan scenario, we calculate the morbidity structure of the UK across age groups and estimate how much overall morbidity would be reduced. This also allows us to calculate an estimate for the associated increase in HLE and GVA. For the levelling up scenario, we use this estimate and apply it to all authorities who are below the top 10th HLE percentile. To get the national average we weigh these authorities by their total GVA contribution. The levelling up calculations are based on the UK's male HLE.

IPPR is the UK's pre-eminent progressive think tank. With more than 40 staff in offices in London, Manchester and Edinburgh, IPPR is Britain's only national think tank with a truly national presence. www.ippr.org

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