The IFS findings, which were funded by the Joseph Rowntree Foundation and The Health Foundation, showed real term spending in health spending increased by £12bn in the UK between 2019-20 and 2023-24, while falling or remaining flat in comparable countries.
Eduin Latimer, research economist at IFS and an author of the report, said: ‘The recent rise in health-related benefit claims is creating a fiscal headache for the Government, and of course is a bad sign about population health. Two simple candidate explanations – that this is just driven by the pandemic or the cost-of-living crisis – are hard to square with the lack of similar trends elsewhere.
‘It seems likely that these shocks have played a role, but it may be that they have an outsized effect in the UK – perhaps because of difficulties in accessing NHS treatments, or the relatively low level of basic unemployment support in the UK. The crucial point is that it is not yet known what factors are driving this increase. Figuring out what is behind the recent rise must surely be a top priority for the Government if it is going to be able to respond appropriately.'
The number of working age people receiving health-related benefits in England and Wales rose from 2.8m (7.5% of the working age population) in 2019-20 to 3.9m (10% of the working age population) in 2023-24, growth of 38%.
Claims increased in every local authority (apart from City of London) with rises concentrated in areas with a high number of claimants before the pandemic.
In Merthyr Tydfil and Blackpool, for example, the percentage of 16 to 64-year-olds receiving health-related benefits grew from 15% to 19%. In contrast, Windsor & Maidenhead and Wokingham claimant numbers rose from 3% to 4%.
There were 20 local authorities where more than 15% of 16- to 64-year-olds claimed health-related benefits, up from two before the pandemic.
By contrast, the health-related benefit caseload fell or remained flat in most comparable countries (Australia, Austria, Canada, France, Germany, Ireland, the Netherlands, Norway, Sweden and the US) with Denmark the only other country with significant growth, though still far less than the UK, at 13% since 2019.
UK spending on working-age related benefits, at 1.7% of GDP, up from 1.3% pre-pandemic, remained similar to comparable countries, however, but will be higher if trends continue.
The analysis also revealed a shit towards claims from younger people and those with mental health conditions.
Claimants of new disability benefit awards for under 40s grew by 150% from 4,500 a month to 11,500 a month, while 40 to 64-year-old claims rose 82% from 11,000 to 20,000. The proportion of mental health claims rose 28% pre-pandemic to 37%.
Matthew Taylor, chief executive of the NHS Confederation, said: 'We welcomed the secretary of state's pledge that his department will deliver billions of pounds in economic growth. We have got to change the argument about health and demonstrate that it is an investible proposition. But reform will not come for free. The Darzi review has highlighted that NHS is in desperate need of capital investment, which will be key to boosting productivity.
'What we also want to see is cross-government co-operation, collaboration and investment on health policy, recognising that that most policy that impacts people's health is made outside the NHS. This should be focused not just on the NHS, but across the social determinants of health to improve the health of our nation as part of the prevention agenda that Darzi rightly underscores.'
