Oxygen Finance

UK Public Sector Spend on Mental Health Services Expected to Reach a New High in 2022

After the 2020/21 financial year saw public sector spending on mental health services reach its lowest level since Oxygen’s records began almost a decade ago, early indications are that figures for 2021/22 will show that expenditure on these services has reached a new high.

Following the previous high of £4.76Bn seen in 2019/20, 2020/21 saw spend on mental health services fall by over 14% to £4.08Bn. However, by the end of 2021 spend recorded by Oxygen’s public sector spend Insights was almost 27% higher than at the end of the previous year, meaning that the 2021/22 financial year was set to see spend on mental health services reach record levels:


Public sector spend on Mental Health Services by year 2013 to 2021


In 2020/21, almost 20% (£805.5M) of public sector spend on mental health services went to private/third sector providers. Of this total, spend with the leading private/third sector provider alone accounted for just over 27%, whilst combined spend with the top three providers accounted for over 52%. However, the emerging picture for 2021/22 is slightly different, with just under 11% of total public sector spend on mental health services going to private/third sector providers at the end of December 2021.

With the vast majority of public sector spend on mental health services coming from NHS organisations, it is also possible to look at the emerging picture for 2021/22 from a regional perspective, with the chart below showing how total spend is split between the regions:


Spend by NHS organisations on Mental Health services by region – 1st April 2021 to 31st December 2021


Of the above regions, the East Midlands is the only one in which spend by NHS organisations on mental health services is not set to have increased in 2021/22, whilst the greatest increase looks set to be seen in the West Midlands.

The World Health Organisation (WHO) previously warned that the Covid-19 pandemic had “disrupted or halted critical mental health services in 93% of countries” at a time when demand was increasing and the emerging spend data certainly seems to paint a picture of significant pent-up demand in the wake of 2020/21’s record low spending figure.

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