The £51 billion case for improving children’s mental health

Reversing a decade of decline in children’s mental health is worth £51 billion, including reductions in SEN support demand worth £606 million, and £17 million in the cost of school exclusions, according to economists from Pro Bono Economics (PBE). Improvements in GCSE attainment and higher lifetime earnings, reductions in school exclusions and the need for SEN support in schools make early investment in children’s mental health support economic sense, according to a new report from think tank PBE.

One in five UK children aged 8 to 16 is now likely to have a probable mental health condition (NHS Digital, 2023). ‘The happy childhood dividend’ report reveals the extent of decline in children’s mental health over the past decade and presents new economic analysis that shows just how costly inaction has become – for families, schools, and the public purse.

The report highlights that despite repeated government commitments to prevention, the NHS remains overwhelmed; just 36% of children referred for NHS mental health care are seen within four weeks, and tens of thousands wait over two years. But today’s findings show that acting earlier – particularly in schools – isn’t just morally right, it’s economically smart.

Using the Millennium Cohort Study, a long-running research project tracking young people born between 2000 and 2002, PBE economists found that even modest improvements in children’s mental health can significantly improve life chances and reduce the need for intensive and costly support.

Key findings

Reversing the past decade’s decline in mental health could:

• Boost GCSE attainment by up to 1.6 grades per child.
• Reduce the likelihood of school exclusion by up to 0.4 percentage points.
• Reduce the need for Special Educational Needs (SEN) support by up to 1.1 percentage points.

What do these findings mean?

In economic terms, this equates to a £51 billion lifetime benefit across the current school-aged population. This works out as an average of £5,300 per child, and is achieved through higher earnings (£50bn), lower exclusion costs (worth £17m) and redistributed SEN support (worth £606m).

The report sets out what a shift from treatment to prevention means for mental health support in schools. Mental Health Support Teams and Early Support Hubs will help, but with 40% of school leaders citing staff capacity as a barrier to making the most of these services, it is clear that we need a range of support offers to meet the scale and diversity of needs children and young people have.

The authors argue that the NHS cannot carry this burden alone. Instead, a cross-sector approach is required that integrates public services with the work of charities like us, who deliver a range of school-based mental health services in over 650 UK schools reaching children who don’t meet clinical thresholds but urgently need help.

Read the report