Health For Wealth - Northern Health Science Alliance

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Health for WealthBuilding a Healthier Northern Powerhouse for UK Productivity

Authors: Clare Bambra, Luke Munford, Heather Brown, Anna Wilding, Tomos Robinson,Paula Holland, Ben Barr, Harry Hill, Martyn Regan, Nigel Rice, Matthew Sutton.Cite as: Bambra, Munford, Brown et al (2018) Health for Wealth: Building a Healthier Northern Powerhouse for UK Productivity,Northern Health Sciences Alliance, Newcastle.Acknowledgements: Simon Dixon, Jennifer Roberts

3ContentsExecutive Summary60 Second SummaryKey FindingsChallengesRecommendations to Central GovernmentRecommendations to Local and Regional Stakeholders44566Foreword71. Introduction1.1 Productivity in the Northern Powerhouse1.2 Health in the Northern Powerhouse1.3 Health for Wealth in the Northern Powerhouse889102. Regional Health Inequalities and the UK Productivity Gap2.1 Introduction2.2 Key Research Questions2.3 Methods2.4 Results2.5 Discussion2.6 Conclusion121212121214143. Long-Term Health Conditions and the UK Productivity Gap3.1 Introduction3.2 Key Research Questions3.3 Methods3.4 Results3.5 Discussion3.6 Conclusion161616161718204. The NHS and the UK Productivity Gap4.1 Introduction4.2 Key Research Questions4.3 Methods4.4 Results4.5 Discussion4.6 Conclusion222222222223245. Increasing UK Productivity by Reducing Regional Health Inequalities 255.1 Introduction255.2 Key Research Questions255.3 Methods255.4 Results265.5 Discussion275.6 Conclusion296. Conclusion: Health for Wealth5.1 Key Findings5.2 Challenges5.3 Recommendations to Central Government5.4 Recommendations to Local and Regional StakeholdersReferencesTechnical Appendices30303030313234

ExecutiveSummary60 Second SummaryThere is a well-known productivity gap between theNorthern Powerhouse and the rest of England of 4 perperson-per-hour. There is also a substantial health gapbetween the Northern Powerhouse and the rest of England,with average life expectancy 2 years lower in the North.Given that both health and productivity are lower in theNorthern Powerhouse, the NHSA commissioned this reportfrom six of its eight university members (Newcastle,Manchester, Lancaster, Liverpool, Sheffield and York) tounderstand the impact of poor health on productivity and toexplore the opportunities for improving UK productivity byunlocking inclusive, green, regional growth through healthimprovement. Our report shows the importance of healthand the NHS for productivity in the Northern Powerhouse.So, as it develops its post-Brexit industrial strategy, centralgovernment should pay particular attention to the importance of improving health in the Northern Powerhouse as aroute to increased wealth.Key findings Productivity is lower in the North A key reason is that health is also worse in the North Long-term health conditions lead to economic inactivity Spells of ill health increase the risk of job loss and lead to lower wages when people return to work Improving health in the North would lead to substantial economic gains Improving health would reduce the 4 gap in productivity per-person per-hour between the Northern Powerhouse and therest of England by 30% or 1.20 per-person per-hour, generating an additional 13.2 billion in UK GVAProductivity is A key reasonis that healthlower in theis also worseNorthin the NorthLong-term healthconditions leadto economicinactivitySpells of ill health increase the risk of job loss andlead to lower wages when people return to workImproving health in the North wouldlead to substantial economic gains30% of the 4 per person per hour gap in productivity (or 1.20 per hour)between the Northern Powerhouse and the rest of England is due toill-health. Reducing this health gap would generate an additional 13.2bnin UK GVA

5Summary of Detailed Findings Health is important for productivity: improvinghealth could reduce the 4 gap in productivitybetween the Northern Powerhouse and the rest ofEngland by 30% or 1.20 per-person per-hour,generating an additional 13.2 billion in UK GVA Reducing the number of working age people withlimiting long-term health conditions by 10% woulddecrease rates of economic inactivity by3 percentage points in the Northern Powerhouse Increasing the NHS budget by 10% in the NorthernPowerhouse will decrease economic inactivity ratesby 3 percentage points If they experience a spell of ill health, workingpeople in the Northern Powerhouse are 39% morelikely to lose their job compared to their counterparts in the rest of England. If they subsequentlyget back into work, then their wages are 66% lowerthan 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 ingross value added (GVA) per-head between theNorthern Powerhouse and the rest of England by10%. Increasing the proportion of people in goodhealth in the Northern Powerhouse by 3.5% wouldreduce the employment gap between the NorthernPowerhouse and the rest of England by 10% So, given the relationship between health, healthcare and productivity in the Northern Powerhouse,then in order to improve UK productivity, we need toimprove health in the North.10%Increasing the NHS budget byin the Northern Powerhousewill decrease economicinactivity rates by3 percentage points39%If they experience a spell of ill health, working people inthe Northern Powerhouse aremore likely to lose their job compared to their counterparts inthe rest of England. If they subsequently get back into work,then their wages are 66% lower than a similar individual in therest of England.ChallengesAlthough these findings demonstrate the scale of the health and economic challenges facing the NorthernPowerhouse, they also provide a blueprint to overcome the problem: in order to improve UK productivity, weneed to improve health in the North. However, there are challenges which need to be addressed: Expenditure on public health and prevention services hasalways lagged behind spend on the treatment of existingconditions. In 2017/18 in England, 3.4 billion was spent by localauthorities on public health. This was dwarfed by Department ofHealth and Social Care spend of over 124 billion, the vast majorityof which went on hospital-based treatment services. Public healthbudgets are estimated to experience real-term cuts averaging 3.9per cent each year between 2016/17 and 2020/21. Austerity presents a real challenge for Northern agencies toimplement approaches to improving health. Local authoritieshave faced disproportionally larger cuts and reductions in socialwelfare since 2010 have also had more of an impact in theNorthern Powerhouse. Exiting the European Union is a challenge for the NHS in termsof the supply of highly skilled workers. Uncertainties overpost-Brexit NHS and local authority public health budgetsettlements are also a challenge for planning prevention andhealth and social care services particularly in the NorthernPowerhouse. Health research funding in the UK is heavily concentrated inthe so-called ‘golden triangle’: London, the South East and theEast of England receive over 60% of funding. This is exacerbated by the fact that the Northern Powerhouse’s strengths are inapplied health research, for which there is high need in theregion but much less funding available nationally and regionally. Uncertainty around the effectiveness of public health interventions means that more applied research is needed to develop,pilot and evaluate and scale-up interventions to improve health –particularly in areas of high need such as the Northern Powerhouse. Green and Inclusive Growth is required given the well-documented threats posed by climate change. It cannot be the caseof ‘business as usual’ for an industrial strategy to increaseproductivity in the North, innovation is required to ensurecarbon-free growth. Growth in the North also needs to besocially inclusive - reaching all places in the region and peoplefrom all social backgrounds.60%Health research funding in the UK is heavily concentrated inthe so-called ‘golden triangle’: London, the South East andthe East of England receive overof funding. This is exacerbated by the fact that the NorthernPowerhouse’s strengths are in applied health research, forwhich there is high need in the region but much less fundingavailable nationally and regionally.

6Recommendations to Central GovernmentAs it develops its post-Brexit industrial strategy, central governmentshould pay particular attention to the importance of health forproductivity in the Northern Powerhouse. Specifically, we make fourkey proposals to central government:1) To improve health in the North by increasing investment inplace-based public health in Northern Powerhouse local authorities.2) To improve labour market participation and job retention amongstpeople with a health condition in the Northern Powerhouse.3) To increase NHS funding in the Northern Powerhouse – to be spenton prevention services and health science research.4) To reduce economic inequality between the North and the rest ofEngland by implementing an inclusive, green industrial strategy.Recommendations to Northern PowerhouseLocal and Regional StakeholdersWe make four key proposals to Northern Powerhouse local andregional stakeholders:1) Health and Wellbeing boards and the emerging NHS integratedcare systems should commission more health promotion, conditionmanagement and prevention services.2) Local enterprise partnerships, local authorities and devolvedNorthern regions should develop locally tailored ‘health-first’programmes in partnership with the local NHS and third sectorproviders.3) Local enterprise partnerships, local authorities and devolvedNorthern regions should scale-up their place-based public healthprogrammes across the life course: ‘starting well’, ‘living well’ and‘ageing well’.4) Local businesses should support job retention and healthpromotion interventions across the Northern Powerhouse workforceand Northern city regions and Northern NHS integrated care systemsshould lead by example.

ForewordThe vision for the NorthernPowerhouse was built in theknowledge that if weharnessed the potential of thegreat cities of the North wewould be increasing theeconomic strength of theUnited Kingdom. The North’scities and towns led theIndustrial Revolution and theirdecline has seen a markedshift downwards into lowerwages compared to theSouth, with lowerproductivity.Henri Murison,Director of the NorthernPowerhouse PartnershipLinking up Liverpool, Manchester, Sheffield, Leeds, Hull andNewcastle with high-speed, integrated transport systems andcutting-edge digital connectivity would allow those cities tocollaborate and contribute more than the sum of their parts,creating a single market. Only with this joined-up approachcould the sluggish productivity of the Northern Powerhouse bestimulated and allow our businesses to thrive.Transport is a vital component of the Northern Powerhouse,with Northern Powerhouse Rail (NPR) promising the world-classtransport network our commuters, families and businessesdeserve. Reducing journey times, enhancing capacity andincreasing frequency are all compelling reasons to build thenetwork, but potentially more important is the opportunity foreconomic growth NPR would create. Reversing decades ofstagnation takes time, but opening up new labour markets andopportunities for our young people would have atransformational effect.In addition, our businesses need access to the skilledworkforce they need to embrace the digital revolution,embedding emerging technology such as robotics, AI, 3Dprinting and VR into everything they do.Our education system requires major interventions, as set outin our Educating the North report, particularly tacklingentrenched disadvantage leading to our children falling behindtheir peers in other parts of the country.Until now health has not had the profile it should have in theNorthern Powerhouse, despite its undoubted importance.Life expectancy is on average two years lower in the Norththan the South, and there is a productivity gap between theNorthern Powerhouse and the rest of England of 4per-person-per-hour. In this report, led by the Northern HealthScience Alliance (NHSA), the link between the two is set outacross the North for the first time.People in the North are more likely to leave work due tosickness than those in the South, and when they leave they areless likely than those in the South to go back into work. Thisreport, put together by leading academics from six Northernuniversities, shows that ill health in the North accounts for over30% of the productivity gap with the rest of England. What’smore, the report’s findings show that the NHS allocatedbudgets explain over 18% of this productivity gap.Importantly, improving health in the North could reduce theexisting gap in GVA of 4 per-person-per-hour between theNorthern Powerhouse and the rest of England by up to 1.20.Improving health in the North increases the whole country’sproductivity.To tackle the poor health and increase productivity in theNorthern Powerhouse we need proportional interventions tothe scale of the opportunity from those who can drive itforward: industry, central and local government.The Mayor, Andy Burnham, a former Labour Health Secretary,will now be able to fully integrate health and social careutilising health devolution. Newcastle University was funded tocreate the National Centre for Ageing which can have animpact across the North, and in Leeds the presence of NHSDigital and a major cluster of health data businesses is ofglobal significance.From Liverpool to the new Mayor of the North of Tyne to beelected in May, health should be the next major transfer ofpower which government offers pro-actively, and without it,unlocking productivity and our economic potential will be heldback.The economic arguments for the Northern Powerhouse areignored at the United Kingdom’s risk. We need to strengthenour country’s economic performance in every way we can,particularly when we leave the European Union.The businesses of the Northern Powerhouse require ahealthy, productive workforce. Addressing ill health wouldsupport a workforce which is fit and able, and – allied withimproved connectivity, education and skills – could create theright conditions for a thriving Northern Powerhouse.Government, as it looks to allocate additional NHS spending,here has the evidence needed for how that investment canalso be financed sustainably through increased productivity inthe Northern Powerhouse. Spending more on health here,through more efficient devolved arrangements will close thegap in fiscal terms of what the North contributes to the UKeconomy, generating increased revenues for the Treasury tomake the NHS in the long term more financially sustainablenationally for decades to come.

talWomenMenNorthern PowerhouseRest of EnglandFig 1.3: Job density by region, 2015 20,211Figure 1.1: The outh WestSouth EastEnglandEastNorth WestWest MidlandsYorkshire and HumberEast Midlands0.5North East0.55Northern Powerhouse1.1 Productivity in the Northern PowerhouseThe UK’s productivity crisis is well-documented and entrenched.While labour productivity grew at its fastest rate for a decade inthe second half of last year, Britain’s annual productivity rateremains well below its pre-crisis peak. Nowhere is this declinemore pronounced than in the North – where job growth since2004 has been less than 1% compared to over 12% in London, theSouth East and the South West.3 The North has not beenbenefiting from economic growth: The North of England generated over 327 billion Gross ValueAdded (GVA)4 to the UK economy in 2015 – around 20% of totalUK GVA.5 However, the Northern Powerhouse accounts for 25% of the UKpopulation (16 million people - of which 63% are of working age)6so GVA per worker is well below that of the rest of the UK The average GVA output per worker in the NorthernPowerhouse is 44,850 - 13% less than the national average.7 GVA per hour worked was 28 in the Northern Powerhousecompared to 32 nationally.8 There are some places in the North that do better, such asCheshire, but generally, productivity is lower in the North.9 Average annual earnings in the Northern Powerhouse are morethan 10% lower than the rest of England (Figure 2).10 Economic activity rates are also lower with higher rates ofunemployment, economic inactivity and worklessness. For example, in 2018, economic inactivity rates were 25.8% in theNorth East compared to 18.8% in the South East.11 Relatedly, poverty rates are also over 5 percentage points higherin the Northern Powerhouse than the rest of England. For example,child poverty rates are 29% in the North East, 31% in the NorthWest and 30% in Yorkshire and Humber, compared to 21% in theSouth East.12 The North East (21%) and North West (19%) also have some of thehighest levels of fuel poverty in England, whilst the South East (11%)0.95Job densityThis introductory chapterprovides background onproductivity and health in theNorthern Powerhouse.Fig 1.2: Average regional annual pay, median, gross 2015 17Average annual pay ( )There is a well-known productivity gap between the NorthernPowerhouse (Figure 1) and the rest of England of 4per-person-per-hour.1 There is also a high health gap betweenthe Northern Powerhouse and the rest of England, with lifeexpectancy 2 years lower in the North. Given that both healthand productivity are lower in theNorthern Powerhouse, theNHSA commissioned this reportfrom six (Newcastle,Manchester, Lancaster,Liverpool, Sheffield and York) ofits eight university members tounderstand the impact of poorhealth on productivity and toexplore the opportunities forimproving UK productivity byunlocking regional growththrough health improvement.has the lowest.13 The economy of the Northern Powerhouse has around 23% ofthe UK’s jobs, but the job density rate14 for the NorthernPowerhouse is 0.78 compared to the national average of 0.83 andthe London rate of 0.98 (as shown in Figure 1.3).15 16So, productivity in the North is consistently below the UKaverage. This indicates clear potential for improvement - ifproductivity in the Northern Powerhouse increased to match theUK average, it would equate to a potential 44 billion real termsgain to UK GDP.18 The 2016 Northern Powerhouse IndependentEconomic Review concluded that a step change in economicperformance in the North is required for UK growth. Increasing

erYorkPrestonStaffordTamworthPrestonBristolBath nrithDoncasterWiganNewcastleCarlisleKeyLife expectancy abovethe English averageLife expectancy aroundthe English averageLife expectancy belowthe English windonChippenhamStevenageLondon Kings CrossLondonReading Slough EustonLondonPaddingtonBristolBath n Kings CrossLondonReading Slough re 1.4: An English Journey – life expectancy for men alongthe East Coast, Great Western and West Coast Mainlines27productivity in the North by 4% by 2050 would increase GVA by15% and create around 850,000 additional jobs in the North.19Northern productivity must be a priority if the UK wants to return tothe rates of productivity last seen before 2008 and to grow allparts of the country.1.2 Health in the Northern PowerhouseThere are deep-rooted and persistent regional inequalities inhealth across England, with people in the North consistently foundto be less healthy than those in the South - across all social groupsand am

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