Why reducing obesity could help to tackle the UK’s productivity problem
www.nesta.org.uk/blog/why-reducing-obesity-could-help-to-tackle-the-uks-productivity-problem/
www.nesta.org.uk/blog/why-reducing-obesity-could-help-to-tackle-the-uks-productivity-problem/
New Nesta-commissioned research by Frontier Economics shows that excess weight – overweight and obesity – is costing the UK around £31 billion a year in lost productivity alone, with a total annual economic and societal cost of around £126 billion. This highlights that investing in the prevention of obesity is not only an effective strategy for improving health outcomes, it’s also a smart investment in the UK’s economic future.
Today, two-thirds of people in the UK are living with excess weight, and more than a quarter with obesity. Since 1990, obesity rates in the UK have doubled, despite nearly 700 policy initiatives from successive governments aimed at addressing the issue over the same period. One core reason for this failure is that interventions tended to rely on individual behaviour change (such as through weight-management programmes, media campaigns, or information provision), largely ignoring the food environment that influences our eating habits and drives people to over-consume.
An effective prevention strategy must include reshaping the food environment to support healthier choices alongside wider action to address the root causes of ill health. So at Nesta, we’re pleased that as part of its 10 Year Health Plan, the UK government has recently announced the healthy food standard, which will set targets for food businesses including supermarkets to improve the healthiness of the products they sell. Nesta has set out how this policy can work in supermarkets, and our modelling estimates that it has the potential to reduce obesity rates by a fifth and avert nearly £5 billion a year in lost productivity. This policy is just one part of the solution to obesity, but it’s a crucial one.
Rising economic productivity, a country’s output relative to the amount of people and other resources used to produce it, is the cornerstone of economic prosperity, high wages, and high standards of living. While many countries have seen slower productivity growth since the 2008 financial crisis, the UK’s stagnation has been especially severe. UK productivity lags considerably behind G7 peers France and Germany, and remains around 20% lower than in the United States.
One of the UK Government’s five missions is to kickstart economic growth. Addressing the UK’s productivity challenges is central to achieving that goal. This will require not only investment in skills, technology and infrastructure but also in population health, which is often overlooked. Better population health would mean fewer people unemployed, fewer sick days taken, and an improvement in efficiency at work. Nesta’s new research shows that reducing excess weight can make a meaningful contribution to ‘getting Britain working again’, unlocking billions in economic output. It provides a compelling economic case for the UK government’s commitment to shifting from a focus on treating sickness to preventing it.
Excess weight costs the UK a staggering £126 billion per year. Of that, the productivity cost makes up around £31 billion – that’s equivalent to a 3p cut in the rate of income tax. This does not include the £10 billion cost to taxpayers from obesity-related sickness benefits. Together, these figures demonstrate the scale of the prize on offer for the economy and businesses if governments can take effective action to tackle obesity.
These new estimates build on previous work by the Tony Blair Institute and Frontier Economics, which valued annual excess weight related costs at £98 billion; with around £15 billion of this associated with lost productivity. Our updated analysis estimates productivity losses at twice that figure. This reflects the inclusion of two additional factors: people being less productive while at work, and lost working years due to people dying earlier (early mortality). These are considered alongside more people being unemployed (economic inactivity) and people taking more sick days (absenteeism), which were the primary focus of the earlier study. We have also updated the methodology to better reflect the causal relationship between obesity and employment rates – meaning these estimates are more likely to reflect real-world impacts.
The contribution of these factors to the total productivity cost of obesity and excess weight is as follows:
These costs are large and potentially headline grabbing, but we’ve taken a deliberately cautious approach in our estimates. For example, an earlier iteration of our model estimated the costs associated with economic inactivity, based on a US cross-sectional study, to be eight times larger than our final estimate, which is based on a more recent UK-based study using a method that allows us to better establish causation and hence be more robust.
The two largest contributors to excess weight-related productivity losses are more people being unemployed (£12.1 billion) and people being less productive while at work (£9.7 billion). The latter is often overlooked, yet it has a major impact on productivity. Most people living with obesity remain in work, so even small, ongoing reductions in day-to-day performance can accumulate into significant economic costs across the workforce. For example, workers living with excess weight may experience arthritis or other musculoskeletal disorders which limit efficiency in manual labour roles, or suffer from sleep apnoea leading to lower sleep quality which can make it difficult to maintain concentration.
The productivity costs from excess weight are primarily from obesity rather than from overweight – £24 billion compared to £6.9 billion. Rates of obesity are higher in poorer areas but salaries are on average lower. However, overall economic costs are concentrated more in poorer areas. The cost of obesity is £440,000 per 1,000 people in the most deprived 20% of neighbourhoods, compared with £360,000 per 1,000 people in the least deprived 20% of places. Tackling obesity would therefore raise economic growth, and reduce not only health inequalities, but economic inequality.
Obesity-related costs are likely to continue to rise over the next decade. By 2035, this report estimates that the annual costs of excess weight will reach £150 billion (in 2025 prices), with productivity losses of £36 billion – an 18% increase over the next 10 years in real terms.
Without meaningful action, obesity rates and the associated economic and health costs will keep rising, placing increasing strain on individuals, our health system, and the wider economy. Tackling obesity isn’t just a health imperative; it’s an opportunity to boost economic productivity, raise living standards, and unlock resources that could be redirected to improve healthcare for a range of long-term conditions.
As an order of magnitude, if obesity were to fall by 5% (and overweight 0.5%) each year for the next five years, reducing obesity prevalence from 32% to 25% by 2030, the UK would see productivity gains of nearly £24 billion over five years.
As noted above, attempts by previous governments to tackle obesity have floundered, largely because they haven’t focussed on the solutions and policies that have the highest potential impact. But the government’s new healthy food standard marks a different approach.
The policy is based on Nesta’s proposal to introduce mandatory healthy food sales targets for the UK’s biggest supermarkets. It will lead to lots of small changes to how food is promoted, developed and stocked over time. When Nesta modelled the impact of the policy, we estimated that it could reduce obesity by around a fifth at a cost to governments of just £0.2 million over five years, by helping to get more healthy food on shelves and in people’s diets without extra costs to the consumer. Considering the impact on obesity alone, this policy could deliver an estimated boost to UK economic output of nearly £5 billion each year.
In our blueprint to halve obesity, which allows policymakers to compare the effectiveness of different obesity-reduction strategies, our proposed ‘prevention and treatment package’ includes a range of policies which evidence shows are likely to be effective at tackling obesity. Alongside health targets for supermarkets, it also includes increased access to weight loss medications for the 150,000 people who are most likely to benefit, among other measures.
As part of our toolkit, we modelled alternative strategies, including making weight-loss drugs much more widely available to 3 million people. While we found this could reduce obesity levels by around 40%, we also found that doing so would be prohibitively expensive: over £42 billion over five years, vastly more than the £3 billion projected cost of implementing Nesta’s prevention and treatment package.
Alongside analysing the impact of obesity and excess weight on productivity, this new study updates estimates of its toll on our health and care systems. Treating conditions linked to obesity and excess weight is estimated to cost the NHS around £12 billion in 2025, with a further £1.2 billion falling on formal social care.
These figures are lower than the 2023 estimates from the Tony Blair Institute and Frontier Economics report because our approach uses refined methods. We include only diagnosed cases of obesity and excess-weight-related illnesses – steering clear of assumptions about undiagnosed illness – and we base cost estimates on evidence showing that annual healthcare spending is 12% higher for people who are overweight and 36% higher for those living with obesity.
The financial hit extends well beyond public budgets. Our report estimates that family and friends provide about £10 billion worth of unpaid care each year to loved ones affected by obesity and excess weight, and the loss of quality and length of life is valued at £71 billion. Cutting obesity would therefore relieve pressure on the NHS and social care services while enabling millions to live longer, healthier lives.
Action on obesity isn’t just imperative for the nation’s health: it can also unlock billions in economic output, raise living standards and support the government’s ambition to generate economic growth. The healthy food standard marks a new chapter in obesity prevention, and the focus must turn to designing and implementing the policy to be as effective as possible, in partnership with the sector. We hope it will be paired with further bold measures to prevent and treat obesity. Now is the time to act. Tackling obesity needs to be a public health priority.
