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IEA releases report showing the net cost of obesity to public services is less than £2.5 billion a year

Ageing population is the real ticking time bomb, says report from the IEA

A new report from the Institute of Economic Affairs finds that, contrary to popular belief, the net cost of obesity to taxpayers is only 0.3 per cent of government spending – less than half of the most commonly cited estimate and a fraction of the amount claimed by some campaigners.

In recent years the overweight and obese have become the scapegoats blamed for draining NHS resources. Politicians, public health bodies and campaigners have constructed a narrative that NHS shortfalls are caused by an obesity ‘epidemic’. This both justifies regressive policies, such as a tax on sugar, and irresponsibly incites resentment of the obese, who are a vulnerable group.

In reality the healthcare costs of treating those who live into their 80s and 90s – ages which more and more of us are now reaching – are far higher than the costs of treating the obese. This is because the elderly often require lengthy and expensive treatments for chronic conditions, or full time care. The government should be focusing on how to deal with the ageing population and the systemic problems of the NHS, rather than stigmatising the obese.

The obese are not a ‘drain on the taxpayer’:

• The economic burden of obesity has been exaggerated by focusing on costs while ignoring savings. The IEA’s report finds that savings on pensions, healthcare and other benefit payments total £3.6 billion per annum.
• This figure allows us to calculate the net cost of the overweight and obese to the government for the first time. Last year this was £2.47 billion – 1.8 per cent of the NHS budget and 0.3 percent of government spending.
• The claim that £16 billion a year is spent on obesity-related conditions is false because it includes all cases of Type 1 and 2 diabetes. Type 1 diabetes is not caused by obesity and many cases of Type 2 diabetes are not caused by obesity. The error is compounded by adding these costs (£10 billion) to a cost of obesity estimate that already included all cases of obesity-related diabetes (£6 billion).

The ageing population is the real ‘time bomb’:

• Our ageing population means there are more and more people who require healthcare for longer.
• Healthcare costs, social care costs, pension payments and cash transfers paid to more people who are living longer are far greater than the costs of obesity.
• The average government spending on a retiree, net of taxes, is £10,947 per annum
• Average annual healthcare costs for the over-65s are £5,813 per person (obesity-related care removed) – this figure increases for those aged 85 and over.

Commenting on the report, Mark Tovey, author of Obesity and the Public Purse, said:

“The public deserve better than shoddy guesstimates and exaggerations. Our rigorous, step-by-step estimate of the net cost of obesity on government finances shows the real figure to be less than £2.5 billion. This is not a trivial amount of money, but it is only 0.3 per cent of government spending. Despite the claims of some of the more excitable campaigners, obesity is not going to bankrupt the NHS.”

Christopher Snowdon, Head of Lifestyle Economics at the IEA, said:

“Given the NHS is currently in the icy grip of a winter-related spike in demand, the topic of healthcare costs could not be more pertinent. Every year, the public price of increased longevity is brought into focus as the cold weather drives a growing number of frail pensioners en masse into ailing A&E departments around the country.

“It is good news that we are living longer, but we must get to grips with the financial consequences of this, rather than making scapegoats of people who happen to be fat.”

Notes to editors: 

For media enquiries please contact Nerissa Chesterfield, Communications Officer: nchesterfield@iea.org.uk or 020 7799 8920 or 07791 390 268.

The Institute of Economic Affairs report on the cost of obesity, Obesity and the Public Purse, can be downloaded here.

The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.

The IEA is a registered educational charity and independent of all political parties.