24th March 2025 Blog

All change: the impact of NHS & welfare changes on mental health

Policy and politics •

McPin co-founder and research director Vanessa Pinfold reflects on what the proposed changes by the Labour government might mean for the sector.

Vanessa Pinfold

The Cinderella of the health service

For a long time mental health was described as the Cinderella of the health service, with lower levels of investment than the ‘burden of health challenges’ warranted – for example, of about 1 in 4 are often mentioned, and 1 in 100 for psychosis.

This had started to change in recent years, partly through awareness-raising programmes like Time to Change addressing stigma and discrimination.

Government investment in innovation also helped, such as the community mental health transformation programme, the Patient and Carer Race Equity Framework (PCREF) led by NHS England, and reform of the Mental Health Act led by the Department of Health and Social Care (DHSC).

In the research sector we have seen increased investment in mental health research through Wellcome Trust, UKRI and NIHR.

The tide was turning, we were no longer Cinderella. The Covid-19 pandemic shone a very bright light on the importance of mental health for all, interacting with many health conditions and social factors, and particularly impacting young people.

Campaigns have since really emphasised the importance of a mentally healthier nation – including the need for a cross-government plan.

We took part in the recent Health Select Committee inquiry into community mental health services for people with severe mental illness. The mood music was positive.

However, over the last couple of weeks, an icy cold wind has started blowing towards the mental health community and – although it was somewhat expected, because change was promised – the framing was a surprise and shock to many.

This matters as a lot of the mental health reforms over the past five years have been led by this ‘quango’, including training programmes for frontline staff and model pathways for complex emotional needs.

NHS England changes announced

First it was announced NHS England will be dissolved over the next two years.

This matters as a lot of the mental health reforms over the past five years have been led by this ‘quango’, including training programmes for frontline staff and model pathways for complex emotional health needs (also known as borderline personality disorder), depression and anxiety, autism, and early intervention in psychosis.

Secondly, it has been announced that we can expect welfare reforms in about 18 months’ time, underpinned by the need to save money because the government’s bill is rising rapidly, with 1 in 10 working-age adults off work due to illness.

According to the BBC website: “Three million people are out of work for health reasons, and one in eight young people not currently in work, education or training.”

Inactivity due to poor mental health

Much has been made of how a large and growing proportion of inactivity in the workplace is due to poor mental health.

This has at least two impacts.

First, those with mental health issues claiming disability benefits are concerned and worried that their support will be affected by these changes.

Since the launch of the green paper this does seem to be a valid concern.

Second, mental health is again stigmatised, and blamed for rising welfare costs. Little is being said about the impact of long Covid or a cost-of-living crisis and global tensions/conflicts, which all fuel poor mental health.

The reasons why Britain’s health is declining will be complex, and mental health often interacts with other physical health conditions and disabilities.

Language is important

It feels like an ambush, with statements from Wes Streeting, Health Secretary, on how mental health issues are being “over diagnosed”.

Language is important here, and although not everyone agrees diagnosis is accurate or even useful when addressing trauma and complex mental health needs, most evidence points to rising levels of mental illness and mental distress:

  • Data from the Mental Health Services Data Set (MHSDS) shows that the number of people in contact with secondary mental health services increased by 43% between March 2019 and March 2024, which cannot be accounted for by population growth alone (CQC,13 March 2025).
  • The Big Mental Health Report – Mind (November 2024) put the cost of poor mental health at £300 billion per year including over 6,000 suicides and 1.6 million people waiting for NHS treatment. In England, 11% of 8-16 year olds with a mental health issue had missed more than 15 days of school in one term.

Does the government believe that if they say that the system is ‘over diagnosing’ then somehow they can remove people from waiting lists, reduce access to benefits and get Britain back to work quicker?

We would like to see the focus being on working out how to effectively support young people who have been affected by disrupted schooling, bullying, rising youth violence, food poverty and social media influences.

Wider-reaching impacts of less support

Regardless of the cost to individuals, families and communities, we risk denying people who need treatment and care access to timely and appropriate support, with more people reaching crisis.

It goes against the strategy to prioritise prevention. We need to build upon programmes like Access to Work, which we’ve seen the benefits of among our team at McPin.

We would like to see the focus being on working out how to effectively support young people who have been affected by disrupted schooling, bullying, rising youth violence, food poverty and social media influences; helping young people gain the skills and confidence they need to thrive in the workplace.

But that is what NHS England has been doing, alongside the Department for Health and Social Care and Department of Education – though with 9,000 jobs on the line it sounds like it might be a harder task.

Let’s work together and create a more mentally healthy society – one which we can afford, built upon compassion and kindness, within-workplace support, and free from stigma.

Concerns within the mental health community

Across the mental health community there are deep concerns about the changes to welfare benefits and the restructuring of the NHS without a clear plan for what follows.

Yes, let’s work together and create a more mentally healthy society – one which we can afford, built upon compassion and kindness, within-workplace support, and free from stigma.

We know change is necessary, but let’s not waste the progress that’s been made for headlines.