Investing in the public health grant What it is and why greater investment is needed

What is the public health grant and how is it used? 

The public health grant is paid to local authorities from the Department for Health and Social Care (DHSC) budget. It is used to provide vital preventative services that help to support health. This includes smoking cessation, drug and alcohol services, children's health services and sexual health services, as well as broader public health support across local authorities and the NHS.

Additional time-limited funding has been allocated to local authorities for drug and alcohol treatment and smoking services and support. The drug and alcohol funding has been allocated for 2022/23 to 2024/25, the smoking services and support funding will be allocated for 2024/25 to 2028/29. We have included this additional funding in our estimates. (We've assumed that all additional smoking services and support funding goes to smoking services, but local areas only need to maintain 2022/23 spend levels so this could free up funds to reallocate elsewhere across public health provision. We have also assumed that all of the additional drug and alcohol funding goes to drug and alcohol services for adults.)

The allocation for the public health grant in 2024/25 is £3.6bn (£3.9bn including additional drug and alcohol treatment and stop smoking services funding). Figure 1 shows the expected expenditure by element of public health provision. The largest areas of planned spend are expected to be on:

• services for children age 0–5 years – which is largely health visitors for infants and mothers (£0.9bn)
• drug and alcohol services for adults (£0.9bn, of which £0.3bn is from additional funding)
• sexual health services (£0.5bn).

How has the value of the public health grant changed over the past decade? 

While DHSC spend on NHS England has increased in real terms over the past decade, there has been a 28% real-terms per person cut in the value of the grant between the initial allocations for 2015/16 and 2024/25. 

The change in the real-terms value of the public health grant is shown in Figure 2. The latest available projection of a GDP deflator to assess real-terms changes in public spend was published by the OBR in March 2024. 

Additional but time-limited funding for drug and alcohol treatment has been allocated to local authorities from 2022/23 onwards. Time-limited funding to stop smoking services and support will also be provided from 2024/25 onwards. Taking account of this additional spend leaves broader public health funding 21% lower on a real-terms per person basis since 2015/16. 

The 2021 Spending Review committed to maintain the public health grant in real terms until 2024/25. Higher than expected inflation means it was lower in real terms in 2022/23, continued to decrease in 2023/24 and it will increase slightly in real terms in 2024/25. The grant has reduced by 5% in real terms since 2021/22.

Including the additional but time-limited drug and alcohol treatment and smoking services support funding provides a real-terms increase in 2024/25 and a real terms increase of 3% since 2021/22.

Using economic assumptions from March 2024 we estimate that restoring the public health grant to its 2015/16 real-terms per person value would require an additional £1bn in 2023/24 price terms in 2024/25.

Which elements of public health provision have been most hit by cuts? 

Figure 3 shows how the reduction in grant allocations feed through into spend on different elements of public health provision. It shows the expected change in real-terms spend between 2015/16 and 2024/25. Some of the largest reductions in spend over the period are expected to be for: 

• sexual health services (40%)
• public health advice (35%)
• children's services (30% for both 0–5 and 5–19 year olds).

Our estimate indicates a similarly large cut in 'drug and alcohol services – youth'. However, the cut for this specific service might be lower than we expect, depending on how councils use and record the additional drug and alcohol treatment funding. 

Public health grant allocations have been made just before the start of the financial year for the past 4 years. Additional funding has come in the form of relatively small time-limited pots. On top of the large real-terms reductions in the grant, the lack of certainty this creates can make it difficult for local authorities to effectively plan and implement services for the longer term.

Why invest in public health?

Local authority public health interventions funded by the grant provide excellent value for money. Research shows that each additional year of good health achieved in the population by public health interventions costs £3,800, measured using Quality Adjusted Life Years (QALYs). This is three to four times lower than the cost resulting from NHS interventions of £13,500 (per additional year of good health).

A review by the University of Cambridge, commissioned by the Health Foundation, has found a considerable evidence base demonstrating the effectiveness and cost effectiveness of public health and preventative interventions. Not all public health interventions are equally effective or cost effective, and their impact on health inequalities can differ. Public health teams need to determine the combinations of services to commission and deliver to best improve health and reduce inequalities in their local areas.

Which local areas have seen the biggest reduction in the grant?

Poor health is strongly associated with living in socioeconomic deprivation. There is a 20-year gap in the number of years a girl born in the most deprived 10% of areas can expect to live in good health, compared with a girl born in the least deprived 10% of local areas. These underlying health inequalities contributed to the COVID-19 mortality rate for those younger than 65 years being nearly four times higher in the most deprived areas than for those in the least deprived. 

However, cuts to the grant have been greater in more deprived areas. Figure 4 compares the real-terms per person cut in public health grant allocations (accounting for additional drug and alcohol treatment and stop smoking services funding) between 2015/16 and 2024/25 to the deprivation score in each local authority. It shows that per person reductions in the public health grant tend to be largest in more deprived areas. In Blackpool, ranked as the most deprived upper tier local authority in England, the per person cut to the grant has been one of the largest – at £27 per person.

Conclusion

Investment in prevention represents excellent value for money compared with health care spend. Yet recent announcements have continued the trend of disinvesting in the wider funding that helps to maintain and improve people’s health.

It is clear that opportunities to prevent the early deterioration of health are being missed, while the need for such interventions is increasing. Failure to invest in vital preventive services will mean health worsening further, widening health inequalities, and the costs of dealing with this poor health will be felt across society and the economy. For instance, preventing people falling into poor health in the first place could help to reduce economic inactivity, increasing the number of people in work. 

A coordinated whole-government strategy is required to improve the nation’s health and tackle health inequalities. But, more immediately, the evidence points to increasing public health budgets to boost investment in vital local public health services.