Funders could help to reduce the £67bn annual cost to society of mental health problems, according to a report by New Philanthropy Capital. It identifies charities and interventions that have been proven to reduce costs and improve people’s lives.

One of the report’s authors, Iona Joy, says: “With tighter public spending, private funding is needed more than ever to support efforts to get people with mental health problems into work. We have identified cost-effective solutions that can get people with mental health problems back to work - taking them off benefits, getting them contributing to society, and improving their health.”

To illustrate the scale of the cost to society, Joy points out that £67bn is equivalent to the amount the government spent on bailing out the banks. She says £45bn of the cost to society specifically relates to mental-health related employment issues including unemployment, sick leave, and low productivity at work.

Job well done: Employment and mental health problems – a guide for funders is based on research commissioned by private banking arm, Barclays Wealth. The report recommends that funders should consider what group of people and what point of intervention they are interested in supporting. They should also consider the risks, returns and opportunities of different funding options. The report suggests funders should put at least 6% of a grant towards evaluation of the effectiveness of interventions.

NPC proposes four key options for funders:

1.    Fund employment advisors within mental health services

2.    Fund tailored employment support for people with mental health problems

3.    Train government employment advisors to deliver effective support

4.    Scale up charities that are helping to make workplaces mental health friendly

A table in the report outlines the type of funding opportunity, the cost, return and risk of each of these interventions.

NPC particularly recommends interventions that follow a model known as Individual Placement and Support (IPS). This proven approach places a specialist employment adviser within a mental health team, to ensure that employment support and treatment are integrated. This can be delivered by employment advisers who are supported by charities such as Mind, Rethink or the Shaw Trust. The report says more work is needed to embed the IPS approach, and charities are showing increasing interest in helping to do so.

Employment services that deliver IPS in the United States have, on average, helped 42% of participants to find and stay in employment and in some areas they have helped 61% of participants. Joy says: “We are asking funders to champion this approach and fund charities who can deliver it on the ground.”

Funders who are interested in the second option could provide grants for charities to deliver employment support. However, the report says: “Given the huge variation in the success of different charities, funders will need to scrutinise evidence of impact.”

Joy adds that there is a role for funders to help charities build the evidence base. “It would be good if charities could be funded to collaborate to provide larger sample sizes and gather evidence.” The report says: “If charities can demonstrate that their new interventions work, they are much more likely to attract additional funding and be spread more widely.”

The report points to various charities that provide tailored employment support including Rethink, the Shaw Trust and Mind. It particularly recommends Mental Health Matters, as it provided “evidence of above-average employment outcomes”.

In terms of the third option, the report recommends the Centre for Mental Health Regional Trainer  programme. It provides intensive support that strictly follows an IPS model that has been trialled across East and West Sussex. Funders could provide grants to scale up such services, by supporting charities to run pilots and roll it out more widely. The report says: “In time, there would be a case for government to take over funding.”

NPC calculates that the return on investment for the regional trainer programme is £17 for every £1 spent. This is based on figures from the pilot of the Centre for Mental Health’s Regional Trainer programme in Sussex. Employment advisers trained in this way  more than doubled the number of people getting into employment.  Each additional employment outcome is calculated to be worth £11,563, based on the minimum wage. On an increase of 98 people employed, this creates a return of £1.1m with the training provided costing £65,000.

NPC says the fourth option could involve supporting charities to get more businesses to improve mental health in the workplace. Joy adds: “This is a particularly good opportunity for corporate funders. They may even want to sponsor programmes in their own workplaces. Employers could save millions through reduced absenteeism and increased productivity.”

Mind, Stand to Reason and the Centre for Mental Health all offer training to line managers on mental health awareness. So corporate funders could either buy their services for themselves, or, as the report suggests, provide “additional grant funding and social investment to help increase their rate of expansion and uptake by employers.” NPC estimates that employers could save £2.50 for every £1 they spend.

As well as traditional grantmaking, NPC is calling on social investors to make long-term, low interest loans or social impact bonds to help charities scale up their services.

This report is part of an ongoing programme sponsored by Barclays Wealth to identify the UK's costliest social problems, and the most effective charitable interventions to address them. Last year, NPC published Early interventions: An economic approach to charitable giving, identifying the three most costly issues in the UK: chaotic families, children with conduct disorders and mental health and employment. Reports on how to reduce costs in the other two areas will be published later in the year.

To download the report for free click here