Closing the health gap between the North and the rest of England could put an extra £18.4 billion into the economy per year, according to new research.
A report released today (November 20, 2025) by Health Equity North (HEN) reveals that the relationship between health and productivity has become stronger over the last seven years, placing a huge financial burden on the economy and stagnating possible productivity growth.
The scale of the health-related economic inactivity crisis is greater in the North of England, with workers more likely to lose their job due to ill health, and those without educational qualifications facing a ninefold higher risk of losing their job if they become ill.
‘Health for Wealth 2025: Building a Healthier North to boost UK Productivity’ revisits the issues exposed in the landmark 2018 Health for Wealth report and explores how the landscape has changed over the last seven years.
It shows that regional inequalities in health, wages and economic inactivity have deepened since the 2018 report – a trend that began even before the COVID pandemic. This sharp rise in economic inactivity due to ill health, now at a record high, underscores the urgent need to put health at the heart of any strategy for sustainable economic growth.
However, there are some ‘good news stories’ in the North, with productivity growth strong in areas such as Greater Manchester, Cumbria and parts of Yorkshire over the past few years.
In 2018, the Northern Health Science Alliance’s Health for Wealth report highlighted the link between the North’s poor health and poor productivity for the first time, and revealed that tackling health inequalities between the North and the South could generate an additional £13.2bn per year. Today’s analysis show that this figure has risen to £18.4bn per year.
Findings also show that improving physical and mental health through a variety of policy changes, proactive health programmes and empowering local authorities, could deliver transformative economic benefits – particularly in regions such as the North East, where improving population mental health alone could add £6.6bn to the economy.
The report, authored by HEN academics from Newcastle University, The University of Manchester, Lancaster University and Teesside University, shows that:
If the health of the North was matched to the rest of the country, it could generate an additional £18.4bn a year – a 13% increase in economic gains found in the previous Health for Wealth report published in 2018 when accounting for inflation.
People living in the North are two times more likely to lose their job following a spell of ill-health than those in the rest of England.
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In the North, workers with no educational qualifications are nine times less likely to remain employed following a spell of ill health compared with those with at least an A-level qualification, whereas in the rest of England, there is no statistically significant relationship between worsening health and remaining employed by educational attainment.
The relative gap in productivity (as measured by GVA per head) has decreased by 2%, owing to the relatively greater increases in the North, particularly since the pandemic. However, the gap remains large, with 26% lower productivity in the North than in the rest of England in 2023. In particular, Greater Manchester and some parts of Yorkshire experienced the highest increases in productivity growth over the past two decades, with accelerated improvements since the pandemic.
However, other parts of the North – including the majority of the North East – are continuing to be left-behind.
The new report suggests that unless decisive action is taken, the North-South health and productivity divide will continue to widen, limiting the UK’s ability to deliver inclusive, sustainable growth.
Lead report author Dr Julija Simpson, Research Associate at Newcastle University, said: “Since the last Health for Wealth report in 2018, the health divide between the North and the rest of England has not only persisted but deepened. This growing inequality is not inevitable, nor is it the fault of individuals – it’s the result of policy choices. Addressing this gap must be central to the government’s growth and wealth agendas.
“Health and economic performance are deeply intertwined: when communities are healthier, they are more productive, more resilient, and better able to contribute to long-term prosperity. Health policy is economic policy – and investing in the health of people in the North is one of the most effective ways to unlock the country’s full economic potential.”
Dr Luke Munford, Academic Co-director of Health Equity North and Senior Lecturer in Health Economics, The University of Manchester, said: “Investing in public health delivers extraordinary value for money. For every £1 spent, society can expect to see a return of around £14 in broader health and socio-economic benefits. That means every pound we invest in preventing illness, improving mental health, and tackling health inequalities pays dividends in higher productivity, stronger local economies, and reduced strain on the NHS.
“The evidence is clear: the government’s approach to health should not be seen as a cost, but an investment. By prioritising prevention and supporting healthier communities, we create the conditions for long-term economic growth and prosperity across the North and the nation as a whole.
“There are things we can learn from Greater Manchester. Since devolution of health and social care, we have seen improvements in life expectancy, and this is now beginning to track through to increases in productivity and economic growth.”
