NHS will pay a high price for short-term mental health cuts, warns charity

A new economic report, published today by the charity Rethink Mental Illness and the London School of Economics, has found that investing in quality care and support for people with schizophrenia and psychosis, results in huge savings in the long-term.

Investing in Recovery makes the business case for investment in a number of different types of care for people with schizophrenia and psychosis including peer support, family therapy and Cognitive Behavioural Therapy (CBT).

It shows how investing in proven services such as Early Intervention (1), can generate significant cost-savings for the NHS because it reduces the need for hospital beds. The analysis found that £15 is saved for every £1 spent on Early Intervention.

The report also highlights the fact that too great a proportion (54%) of the current psychosis budget is being spent on inpatient care, rather than on community services which help prevent people becoming seriously unwell in the first place.

The findings will be presented to Ministers and NHS leaders from across England today at the country’s first ever National Psychosis Summit, to be held in London.

The aim of the summit is to bring NHS leaders together to identify problems in the system which are preventing investment in quality services for people with schizophrenia and psychosis, and for them to work together to find solutions.

Rethink Mental Illness is calling for more money to be invested in community services, which will reduce the need for expensive hospital beds. It costs an average of £13 a day to support someone in the community, compared to £350 a day in hospital.

Victoria Bleazard, Associate Director of Campaigns and Policy for Rethink Mental Illness said: “Mental health is chronically underfunded. It accounts for 23% of the disease burden in England, but gets just 13% of the budget. On top of this, NHS spending has been essentially frozen in real terms until around 2020 and NHS England recently decided to disproportionately cut mental health, despite the Government’s commitment to equality between mental and physical health.

“Not only do we want to see mental health getting a fairer share of the budget, but we also need to make sure that the money that is available, is spent as efficiently as possible. In this climate, it makes no sense to cut mental health services which generate cost-savings and save lives. Short-term cuts only store up bigger costs for the future.

“The earlier we can detect and treat schizophrenia and psychosis, the better the chances are of recovery for the individual and the cheaper it is for the system in the long term. We’ve seen this shift in other areas of medicine such as cancer treatment, where swift, early treatment is a priority. We need to see the same change in emphasis for people with schizophrenia and psychosis.”

The economic report and today’s National Psychosis Summit are being supported by the Department of Health.

Key points from the report:

·         Over a ten year period, every £1 spent on Early Intervention Services saves society £15


·         Every £1 invested in peer support saves £4.76 due to a reduced need for expensive hospital care


·         Over 2-5 years, early detection services – which help people get access to treatment as quickly as possible – save over £50 million per year


·         Each person who receives family therapy saves the NHS more than £4,000 over a three-year period.


·         Over £14 million could be saved every year if Crisis Resolution and Home Treatment teams had the capacity to support just 50% of people at risk of needing hospital admission for mental illness. In some areas, they are currently only in touch with about 5% of this group.


·         The health and social care system saves £989 for every patient who receives Cogitative Behavioural Therapy (CBT) due to reduced hospital admissions.

Professor Martin Knapp, report author and Director of the Personal Social Services Research Unit at the LSE said: “Much needs to be done to improve the lives of people with schizophrenia and psychosis. At the same time – as our report shows – there is also much that can be done to improve NHS efficiency, and even for some interventions to generate savings.”

The summit and new economic modelling are part of Rethink Mental Illness’ ongoing work to improve the care and treatment for people with schizophrenia and psychosis, following on from the Schizophrenia Commission report ‘The Abandoned Illness’ in 2012, which highlighted major problems with the state of care for this group. 

The Centre for Mental Health also contributed to the report.


For a copy of the report or more information, please contact Rachel Hobbs, Media Manager for Rethink Mental Illness Rachel.hobbs@rethink.org or call 0207 840 3138


1.    Early Intervention in Psychosis (EIP) services help young people aged 14-35 to recover from a first episode of psychosis, and to gain a good quality of life. They offer support from a wide range of health professionals, including psychiatrists, psychologists, community mental health nurses, social workers and support workers. EIP services take a holistic approach to helping young people, including supporting them with their physical health, education or employment, social skills and family relationships.


Rethink Mental Illness


Rethink Mental Illness is a charity that believes a better life is possible for people affected by mental illness. Since 1972 we have brought people together to support each other. We run services and support groups that change people’s lives and challenge attitudes about mental illness. We support almost 60,000 people every year across England to get through crises, live independently and realise they are not alone. We give information and advice to 500,000 more and change policy for millions. For more information go to www.rethink.org

Professor Martin Knapp

Professor Martin Knapp is Director of the Personal Social Services Research Unit at the London School of Economics and Political Science. His research expertise is in child and adult mental health, dementia, autism and long-term social care, with much of his work having an economic focus and a significant impact on UK and international health policy. Professor Knapp has published more than 450 peer-reviewed articles and 15 books.

Rachel Hobbs 
News and Media Manager, Rethink Mental Illness
0207 840 3138
Tweet me! @Rachel_Rethink