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Major new report connects North’s poor health with poor productivity

Posted on 19 November 2018

Poor health has been linked with the North’s poor productivity for the first time, according to a major new report involving research by the University of York.

Improving health in the North would lead to substantial economic gains

Health for Wealth: Building a Healthier Northern Powerhouse for UK Productivity was commissioned by the Northern Health Science Alliance to look at the relationship between the North’s poorer health and its poorer productivity.

Tackling health inequalities between the North and South would put an extra £13.2bn into the economy, according to the report.

Economic gains

Improving health in the North would lead to substantial economic gains, reducing the £4 gap in productivity per-person per-hour between the Northern Powerhouse and the rest of England by 30% or £1.20 per-person per-hour.

Nigel Rice, Professor of Health Economics at the University of York and one of the academics involved in the study, said: “Health is intrinsic in enabling individuals to flourish and lead productive lives.

“An important element of this is allowing people to actively and fully participate in the labour market.

“We know that there exists a large health disparity between the Northern Powerhouse and the rest of England.

“There is also a substantial difference in economic productivity. The findings of this research strongly suggest that investments in health in the North will deliver long term economic gains contributing to the reduction of the productivity gap between the North and the rest of England.”

Professor of Public Health at Newcastle University, Clare Bambra, added: “For the Northern Powerhouse to reach its potential there needs to be increased investment in place-based public health in local authorities across the area. There needs to be increased NHS funding in the North, spent on prevention services and health science research.

“Work needs to be done to improve labour market participation and job retention among people with a health condition in the region. Northern poor health affects the entire country’s economy, a healthier Northern Powerhouse means a healthier UK economy.”

Key report findings

• Reducing the number of working aged people with limiting long term health conditions by 10% would decrease rates of economic inactivity by 3 percentage points in the Northern Powerhouse
• Increasing the NHS budget by 10% in the Northern Powerhouse will decrease economic inactivity rates by 3 percentage points
• If they experience a spell of ill health, working people in the Northern Powerhouse are 39% more likely to lose their job compared to their counterparts in the Rest of England. If they subsequently get back into work, then their wages are 66% lower than a similar individual in the rest of England.
• Decreasing rates of ill health by 1.2% and decreasing mortality rates by 0.7% would reduce the gap in gross value added (GVA) per-head between the Northern Powerhouse and the Rest of England by 10%.
• Increasing of the proportion of people in good health in the Northern Powerhouse by 3.5% would reduce the employment gap between the Northern Powerhouse and the rest of England by 10%.
• Given the relationship between health, health care and productivity in the Northern Powerhouse, then in order to improve UK productivity, we need to improve health in the North.

The authors of the report have made a series of recommendations, including implementing an inclusive, green industrial strategy to reduce economic inequality between the North and the rest of England.

Investment in health

Dr Hakim Yadi, CEO of the Northern Health Science Alliance, said: “We’re missing out on £13.2bn in the North’s economy by not being smart with investment in health.

“Post-Brexit we need to build a stronger, healthier UK economy and the North of England is a key part of this. By improving health we can also make a direct impact on productivity and that is something no government should ignore.”

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