Unprotected Nation. A Report by Development Economics. January 2013

Transcription

1 Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services A Report by Development Economics January 2013

2 About the Author Stephen Lucas is an economist with 20 years experience in economic, demographic and social policy and regeneration consulting. His expertise lies in economic impact assessment, economic regeneration, feasibility studies and project appraisal. Stephen is a co-founder and Managing Director of Development Economics Limited, a company that specialises in the economics of regeneration and social development policy. He regularly advises public and private sector clients and partnerships on economic strategy, project feasibility, impact assessment and funding. Recent government clients include: the Department for Communities and Local Government (DCLG), the Department for Work and Pensions (DWP) and the Scottish Government. Stephen has undertaken more than 50 Green Book-compliant economic appraisals and cost-benefit analyses of major infrastructure and development projects over the past eight years, representing total public sector investment of well over 10 billion. He also works extensively with the private sector, where recent clients have included Scottish Widows, Aviva, Visa Europe, Peel Holdings and Gladman Developments. 2 Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

3 Contents Foreword... 4 Executive Summary... 5 Commentary Section 1 Introduction Section 2 Context for the Study Section 3 The Potential Financial Costs to the NHS of Unintended Pregnancies Section 4 Other Public Sector Costs Section 5 Additional Longer-Term Economic Impacts Section 6 The Financial Costs and Wider Impacts of STIs Section 7 Key Findings and Implications Production of this report was funded and developed in partnership with Reckitt Benckiser Healthcare (UK) Ltd. Brook and FPA retained complete editorial control. Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 3

4 Foreword Austerity measures have had an impact on our communities, our health, our education system and our pockets. The nation is in a period of great difficulty and everyone is feeling the pinch. Last year, we learnt from the Advisory Group on Contraception (AGC) about restrictions and cuts to contraceptive and sexual health services. As the UK s leading sexual health charities, Brook and FPA commissioned this report on the long-term financial implications of these cuts. The results have been startling. Policies that cut and restrict contraceptive and sexual health services now will result in greater numbers of unintended pregnancies and sexually transmitted infections (STIs). This will cost billions more in health and welfare expenditure in the future. But it doesn t have to be that way. A policy focus in the past on teenage pregnancy, chlamydia screening, sexual health and HIV means we know what to do to improve sexual health in the UK. That s why we ve launched the XES We Can t Go Backwards campaign to fight cuts and restrictions to services. Ensuring good access for all to contraceptive choices and accurate, evidence-based information on sexual health is essential if we are to improve the nation s health and reduce the cost of unintended pregnancy and STIs. We mustn t return to a time when such choices didn t exist. XES We Can t Go Backwards and this report show what could happen if we do. Simon Blake OBE Chief Executive, Brook Dr Audrey Simpson OBE Acting Chief Executive, FPA 4 Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

5 Executive Summary Access to the full range of contraceptive methods at a location and time that meets the needs of women is vital to minimise the risks and consequences of unintended pregnancy. But according to a report 1 published in April 2012 by the Advisory Group on Contraception (AGC), 3.2 million women aged between 15 and 44 experience restrictions in obtaining sexual health and contraceptive services. Their research found that the average abortion rate was around 9.7% higher in areas where services were restricted, compared with areas with no restrictions. This provides an indication that restrictions to contraceptive services could result in significantly more unintended pregnancies. Concerned by these findings, sexual health charities Brook 2 and FPA 3 launched the XES We Can t Go Backwards campaign to demonstrate the importance of high-quality contraceptive and sexual health services. Unprotected Nation The Financial and Economic Impacts of Restricted Contraception Services was commissioned as part of the XES campaign, and considers the potential financial consequences of increased restrictions on access to contraceptive and sexual health services in the UK. To understand this position in better detail, three scenarios are evaluated. These are based on current, improved and worsened access to services. Key findings based on maintaining current access levels of contraceptive and sexual health services show that, between 2013 and 2020, unintended pregnancy and STIs could cost the UK between 84.4 billion and 127 billion (Table S4) comprising: 11.4 billion (cumulative costs) of NHS costs as a result of unintended pregnancy and STI costs (Tables S1 and S2) between 73 billion and billion (cumulative costs) of wider public sector costs (Table S3). If cuts continue and there is worsened access with more people being denied access to contraceptive methods and information the additional cost to the NHS plus wider public sector costs could total between 8.3 billion and 10 billion (Table S4). To put this in context the total NHS budget for was 108.8bn 4. If on the other hand there is improved access, cost savings to the NHS and public sector of between 3.7 billion and 5.1 billion could be made compared to the current access scenario (Table S4). Worsened access could cost 8.3bn 10bn more by 2020 Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 5

6 Methodology To generate the findings presented in this report: an extensive review was undertaken of national and international trends in unintended pregnancy and STI rates, the health spending associated with these, and with the children born as a result of unintended pregnancy; a review was undertaken of available data on rates and trends for conceptions, abortions, miscarriages and STIs, and of Office for National Statistics (ONS) projections of the UK population; a range of plausible future scenarios for unintended pregnancy and the various alternative outcomes (abortions, live births etc) was developed; these scenarios were used to generate estimates of future health-related and nonhealth public expenditure. Three scenarios were used to consider the impact of restrictions to contraceptive services: i. the current access scenario considers the impact of maintaining (2011) rates and trends in unintended pregnancy and STIs; ii. an improved access scenario considers the impact of removing restrictions to contraceptive services, or improving the prevention of STIs; iii. a worsened access scenario considers the potential impact of increasing restrictions to contraceptive advice and methods, or increased diagnosis of STIs. NHS Costs Unintended Pregnancies Numbers of abortions, miscarriages and live births expected under each of the three scenarios, and the costs of these, were considered and these are shown in Table S1 overleaf. Based on current access levels, the annual costs of unintended pregnancies to the NHS between 2013 and 2020 will be 662 million; a cumulative total of more than 5.2 billion over 8 years (Table S1). 299m additional costs to the NHS from an increase in unintended pregnancies To put this figure in context, the costs for alone amount to more than 2 billion, representing just over 10% of the 20 billion of efficiency savings the NHS needs to find by If there was an improved access scenario with fewer restrictions on access to contraceptive services, the cost of unintended pregnancies to the NHS would be reduced by 24 million each year; cumulative savings of almost 196 million between 2013 and If there is worsened access, these costs could rise by around 299 million (6%) by Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

7 Table S1: Unintended Pregnancy: Expected Outcomes and Cumulative Costs Under the Three Scenarios (based on 2011 prices) Indicator Scenario 1 Current Access Scenario 2 Improved Access Scenario 3 Worsened Access Number of unintended pregnancies ( ), leading to: 3,544,596 3,467,430 3,601,570 Abortions (NHS only) Miscarriages Live Births 1,411, ,415 1,665,944 1,358, ,718 1,604,203 1,537, ,469 1,665,944 Cumulative costs ,294m 5,098m 5,593m Average annual cost m 637m 699m Source: Development Economics STIs (excluding HIV) STI diagnoses in England increased by 49% between 2002 and 2011, though this increase can partly be accounted for by improvements in surveillance and diagnosis. For example, the significant increase in the number of cases of chlamydia that occurred in 2008 was largely the result of the introduction of more efficient methods of surveillance. Potential to save 1.13bn through better access to services Around 510,000 new STI diagnoses were made in the UK in , with estimated treatment costs of 620 million. 7 This report considers three scenarios for future STI rates in the UK, as follows: If current rates of infections continue between 2013 and 2020, total public health spending of around 6.04 billion can be expected. Worsened access to services could lead to an increase in public health spending of 314 million to 6.35 billion, while improved access to services could result in cost savings of around 1.13 billion by (Table S2 overleaf) Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 7

8 Table S2: Summary of Cumulative Scenario STI Costs, , Scenarios 1 3 (based on 2011 prices) STI Scenario 1 Current Access Scenario 2 Improved Access Scenario 3 Worsened Access Chlamydia 2,320m 1,518m 2,560m Syphilis 13m 11m 14m Gonorrhoea 34m 34m 35m Anogenital warts 1,568m 1,363m 1,601m Anogenital herpes 313m 273m 338m Other STIs 1,792m 1,715m 1,807m Total 6,040m 4,914m 6,354m Source: Development Economics Combined Impact of Unintended Pregnancy and STIs If there is worsened access, the combined costs to the NHS of unintended pregnancy and STIs could be as high as 781 million by (Tables S1, S2 and post-natal healthcare figures from Table S3) Conversely, improved access to services could result in savings of up to 1.45 billion by (Tables S1, S2 and post-natal healthcare figures from Table S3) 8 Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

9 Public Sector Costs The medical costs of unintended pregnancy and STIs pale almost into insignificance compared to the wider public sector costs. For example, the cumulative medical costs based on current levels of access between 2013 and 2020 are an estimated billion (Table S1), while public sector costs range from billion to billion (Table S3). Though this report considers costs between 2013 and 2020, education costs for children from unintended pregnancies apply to age 18, and could range from 98.7 billion (with worsened access) to 90.5 billion (with improved access). 8 Long-term spending requirements associated with unintended pregnancies such as policing, justice and antisocial behaviour are not covered by this report. Table S3: Cumulative Wider Public Sector Cost, Scenarios 1 3, (based on 2011 prices) Indicator Scenario 1 Current Access Scenario 2 Improved Access Scenario 3 Worsened Access Expenditure area Minimum Maximum Minimum Maximum Minimum Maximum Social welfare 52,347m 66,996m 50,488m 64,588m 58,993m 74,147m Personalised social services 5,764m 23,650m 5,586m 22,933m 6,001m 24,602m Education 8,717m 10,374m 8,525m 10,145m 9,335m 11,109m Post-natal healthcare 2,264m 4,121m 2,194m 3,993m 2,357m 4,290m Housing 1,658m 7,894m 1,607m 7,650m 1,726m 8,219m Anti-poverty programmes 2,328m 2,328m 2,266m 2,266m 2,409 2,409m Total 73,079m 115,363m 70,665m 111,576m 80,821m 124,776m Source: Development Economics Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 9

10 Combined Costs Compared to the current access scenario, the additional cost of worsened access to contraceptive and sexual health services could lie between 8.3 billion and 10.0 billion by 2020, while improved access could save between 3.7 billion and 5.1 billion. (Table S4) By 2020, providing services to support children from unintended pregnancy could account for between 10% and 15% of the UK s anticipated social welfare spending bn 5.1bn could be saved by 2020 by improving access to contraceptive and sexual health services Table S4: Cumulative Overall Public Sector Costs, Unintended Pregnancies and STIs, Scenarios 1 3, (based on 2011 prices) Indicator Expenditure area Abortions, miscarriages, births Wider public costs STIs Total Scenario 1 Current Access Scenario 2 Improved Access Scenario 3 Worsened Access Minimum Maximum Minimum Maximum Minimum Maximum 5,294m 5,294m 5,098m 5,098m 5,592m 5,592m 73,079m 115,363m 70,665m 111,576m 80,821m 124,776m 6,040m 6,040m 4,914m 4,914m 6,354m 6,354m 84,413m 126,697m 80,677m 121,588m 92,767m 136,722m Source: Development Economics 10 Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

11 Impacts on Earnings and Poverty This report also considers the potential impact of unintended motherhood on the medium to long-term earnings of the mother. The table below summarises the potential loss of earnings under each of the three scenarios, including an estimate of lost income tax and national insurance contributions. Table S5: Potential Loss of Earnings and Income-related Tax Revenues, (based on 2011 prices) Scenario Scenario 1 Current Access Scenario 2 Improved Access Scenario 3 Worsened Access Aggregate Annual Lost Earnings by 2020 Cumulative Lost Earnings Cumulative Lost Tax Revenues by m - 2,511m - 803m - 370m - 2,421m - 775m - 424m - 2,633m - 843m Source: Development Economics If current rates of unintended pregnancy continue, cumulative earnings lost between 2013 and 2020 will total just over 2.51 billion. Worsened access would mean a rise in lost earnings of 122 million by 2020, while improved access would mean a 90 million reduction in lost earnings. This estimated loss of earnings could have a knock-on impact on the UK economy of between 3.52 billion and 3.81 billion from 2013 to bn 3.81bn lost to UK economy by 2020 through loss of earnings Under the current access scenario, cumulative lost income tax and national insurance contributions would be around 803 million by If restrictions increase, losses could rise by 40 million by 2020; if access is improved, lost revenues will fall by 28 million. Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 11

12 Conclusions This report was prompted by concerns that mounting financial pressures combined with imminent changes to commissioning structures are leading to reduced access to contraception and sexual health services around the UK. Our research clearly shows the significant cost of pursuing this approach. The financial implications of unintended pregnancy and STIs go far beyond short-term medical costs: they have a major impact on the medium- to long-term financial health of our country, and the physical health of its people. Commentary Anne Connolly, GP: Ridge Medical Practice, Bradford and Chair of the Primary Care Women's Health Forum Those of us who work on the front line of primary care and contraceptive services should be concerned about the impact of the imminent changes to commissioning, not least because decisions based in cost-efficiency will have direct implications for people s wellbeing. A significant amount of work has been undertaken since the teen pregnancy reduction target was set in 1998, with good results, but we continue to have high rates of unplanned pregnancies and increasing STIs due to the changing pattern of sexual behaviour. Restricted contraception services are already in evidence across the UK, with visible consequences. Recent work by the AGC demonstrated that in areas where restrictions on contraceptive availability are present, abortion rates are 9.7% higher than areas with no restrictions. This report reveals for the first time just how far-reaching these consequences are, and makes clear that continuing the progress made by decades of good work requires investment including better sex and relationships education in schools, and access to a full range of contraceptive methods through a number of providers. This report by Brook and FPA not only makes stark reading for clinicians concerned about the impact of increased restrictions on people s lives, but is also extremely relevant to those who are making the financial decisions, as the projected long-term ramifications for NHS and welfare budgets testify. The projected costs for continuing to increase restrictions are frightening, but if we are brave enough to invest money at a time when there is pressure to disinvest, and to ensure the money is spent wisely, this report provides compelling evidence that there are significant cost savings, as well as quality-of-life improvements, as the reward. 12 Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

13 References of Executive Summary 1 Sex, Lives and Commissioning identified that around one third of women aged between 15 and 44 in England don t have access to comprehensive contraceptive and sexual health advisory services. 2 Brook is a registered charity that provides free sexual health services and advice to people under FPA, formerly the Family Planning Association, is a charitable organisation whose mission is to educate and inform about matters to do with sexual health and sexual health services in the UK HM Treasury, Spending Review, Unprotected Nation: The Financial and Economic Impacts of Restricted Contraception Services, Table 6-3, FPA and Brook (Based on data from Health Protection Agency 2012 and ONS 2012). 7 Unprotected Nation: The Financial and Economic Impacts of Restricted Contraception Services, Table 6-5, FPA and Brook (Based on information from Counting the Cost: the Economics of Sexually Transmitted Infections, the North West Public Health Observatory, March 2005 and The Health Service Cost Index, Unprotected Nation: The Financial and Economic Impacts of Restricted Contraception Services, paragraphs 4.39 and 4.40, FPA and Brook Based on HM Treasury targets for spending on welfare spending, extrapolated forward to Unprotected Nation: The Financial and Economic Impacts of Restricted Contraception Services, paragraph 5.29, FPA and Brook Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 13

14 Section 1 Introduction Objectives of the Report 1.1 A number of factors have combined that have the potential to create a crisis in numbers of unplanned pregnancies, abortions and sexually transmitted infections. These factors include: evidence of restrictions on the availability of some contraceptive services and contraceptive advice in some areas of the UK, including some methods of contraception only being made available with a GP referral concern that pressure on public health budgets and the drive for efficiency savings in health service delivery might mean these restrictions could become more widespread the discontinuation of relevant public health strategies, including the national sexual health strategy and the teenage pregnancy strategy, and the delay in the coalition government introducing replacement strategies a vocal campaign by some commentators and interest groups who appear to be seeking a curtailment of women s rights to access contraception and abortion services. 1.2 Given the growing concerns, this report has been commissioned by the two leading sexual health charities, Brook 1 and FPA 2, in collaboration with Reckitt Benckiser Healthcare (UK) Ltd. 1.3 This report identifies the potential financial and economic impacts of existing and potential future restrictions on the provision of contraceptive advice and services in some parts of England, and considers the potential consequences were these restrictions to be extended throughout the United Kingdom. 1.4 The report also quantifies the potential impact of reduced levels of contraceptive services and advice, and assesses the longer-term impacts of reduced levels of service on health and other public sector budgets between 2013 and In addition, the report also considers the potential longer-term impacts of unintended pregnancy on the longer-term labour participation and earnings potential of both teenage and older mothers. 1.6 In terms of STIs, the report identifies the issues associated with a rising incidence of infections, and assesses the current level of direct medical costs of diagnosis and treatment, and considers three alternative future scenarios for financial liabilities between 2013 and Brook is a registered charity that provides free sexual health services and advice to people under FPA, formerly the Family Planning Association, is a charitable organisation whose mission is to educate and inform about matters to do with sexual health and sexual health services in the UK. 14 Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

15 Structure of the Report 1.7 The remainder of this report is structured as follows: Section 2: provides the context for the study, including the evidence of restrictions of access to contraceptive services and advice in some parts of England Section 3: provides definitions of three forward-looking scenarios between 2013 and 2020, and identifies the potential financial costs to the NHS of increased demand for healthcare services associated with future levels of unintended pregnancies under each of the three scenarios Section 4: identifies the potential wider financial costs to the public sector such as social welfare payments, personalised social services, postnatal health costs, housing costs and education costs that are likely to be associated with future levels of unintended births under each of the three scenarios considered by this report Section 5: Section 6: Section 7: Sources of Data considers the potential impact of unintended births on the wider economy, including issues such as short-to-medium-term impacts on labour market participation, earnings and human capital formation, focusing in particular on contrasting the potential impact on younger mothers with women who have already completed their education and gained qualifications assesses the financial and wider economic impact of potential increases in the incidence of sexually transmitted infections that might result from worsened access to sexual health guidance, education, advice and counselling programmes provides a summary of key findings and discusses some wider implications. 1.8 The report utilises data from a range of sources, primarily the Office for National Statistics and other government departments, such as the Department of Health, the Department for Education, the Department for Work and Pensions, and HM Treasury. The report also utilises information from developed administrations such as the Scottish Government and National Assembly for Wales and from agencies such as the Health Protection Agency. 1.9 The research also utilises information from UK and international academic literature, including research from the United States and Australia, and from pan-national sources such as the World Health Organization (WHO), the Organisation for Economic Co-operation and Development (OECD), and European Union (EU) health protection and statistical agencies The various sources of data and information are cited throughout the report. Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 15

16 Section 2 Context for the Study Recent Trends in Sexual and Reproductive Health 2.1 Sexuality is a key part of human identity, and good sexual health is an important component of physical and mental wellbeing. Over the past four decades or so there have been huge changes in population patterns of sexual behaviour in the UK, but some of these changes have led to increased risks of health problems, including rising rates of unintended pregnancy and sexually transmitted infections. Unintended Pregnancy and Abortion 2.2 Changes in patterns of sexual behaviour have led to a number of health and social problems, such as increased numbers of unplanned pregnancies, and Britain is notable for having one of the highest teenage pregnancy rates in Western Europe Abortion rates are often used as a proxy indicator of unintended pregnancy. The numbers of abortions performed in England and Wales for residents increased from around 75,000 in 1970 to over 189,000 in 2010 (an increase of almost 150%). This trend suggests that the total number of unintended pregnancies has also increased very substantially over the same period. 2.4 Data for abortions in England and Wales confirms that progress has been made over the past decade in reducing rates of abortion among teenagers and younger women. However, the same datasets indicate that abortion rates have risen over the same time period for older women, suggesting that rates of unintended pregnancy have been increasing among these older age groups. The table below sets out crude abortion rates by age group for 2011 compared to 2001 for England and Wales. Table 2-1: Crude Abortion Rates (per 1,000 women) England and Wales, 2001 and 2011 Age Group % Change Under % % % % % 35 or over % Source: ONS Abortion Statistics, From FPA Teenage Pregnancy factsheet (data sourced from United Nations Statistics Division, Statistics and Indicators on Women and Men, Table 2b, Indicators on Child-bearing, July 2010). 16 Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

17 2.5 The data indicates that whereas for under 18s there has been a 16.7% reduction in crude abortion rates since 2001, and smaller reductions for women (10.3%) and (1.6%) respectively, there has been an increase in rates for each of the groups aged 25 and over. The increase is especially noticeable for women aged (21.1%). Sexually Transmitted Infections (STIs) 2.6 Another issue of increasing concern is that the rates of incidence of sexually transmitted infections have been growing steadily in recent decades. The upsurge in the rates of incidence of STIs in England since 2002 is a component part of a longerterm trend over the past few decades. The increased incidence of STIs is attributable in part to changes in sexual behaviour, but also to increases in public health surveillance and testing, coupled with the introduction of more sophisticated diagnostic methods. 2.7 The increased rates of unintended pregnancy and STIs have led to commensurately increased levels of medical and other public expenditure. There are treatment costs for STIs that are diagnosed, and for dealing with the longer-term medical implications of cases that are not detected or treated. In the case of unintended pregnancy, as well as the medical costs of responding to increased demand for abortion, there are also medical costs associated with the proportion of unintended pregnancies that result in a live birth. 2.8 Unintended pregnancies that result in live births can also lead to significant levels of public expenditure, in terms of social welfare costs, education costs, housing costs and other forms of public spending. The extent of these costs is assessed in later sections of this report. Background to the Study 2.9 Despite the continued problems with high levels of teenage pregnancy, growing numbers of unintended pregnancies among women aged over 25, and increased rates of STIs, concerns are growing regarding a potential reduction in the range of accessible contraceptive advice and services available in the UK. The issues that have given rise to particular concerns include: some health service commissioners may be restricting access to contraceptive services and advice on the basis of age and/or place of residence the need to achieve efficiencies in health service delivery may result in reduced access to some methods of contraception, and in particular for some forms of long-acting reversible methods of contraception (LARCs) increasing evidence that some methods of contraception may only be available with a GP referral, and that some GPs don t offer a full range of services and a concern that changes to commissioning structures may result in adverse effects in terms of the continuity and quality of contraceptive advice and services. Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 17

18 2.10 The Quality, Innovation, Productivity and Prevention (QIPP) agenda means that the NHS needs to find 20 billion of efficiency savings by Health service commissioners are therefore under increasing pressure to achieve savings, or to do more with less, and there is mounting evidence that these pressures are resulting in restrictions on services, including contraceptive and sexual health services. For example, a freedom of information audit in April 2011 revealed that more than half of responding commissioners had a list of medications that GPs were banned from prescribing, including new forms of contraception In April 2012 the Advisory Group on Contraception (AGC) published the results of a survey into the commissioning of contraceptive and abortion services in England. The report, Sex, Lives and Commissioning, identified that over 3.2 million women of reproductive age (defined as 15 to 44 years) are living in areas where fully comprehensive contraceptive advisory services are not provided. 6 This means approximately one-third of women in England within this age range live in areas with restricted access to contraception advisory services or contraceptive methods that are most suited to their needs A key finding of the AGC research was that the average abortion rate in 2010 for women aged 15 to 44, in Primary Care Trust (PCT) areas where some form of restriction on contraceptive service availability was in place, was about 9.7% higher than in PCT areas where no restrictions were in place As a consequence, the All Party Parliamentary Group on Sexual and Reproductive Health in the UK (APPG) launched an inquiry into access to contraception in April Its subsequent report 8 identified a number of concerns, including: Evidence was found of worsening access to contraceptive services, particularly in relation to the age of women (such as restrictions on access to oral contraception for women aged over 25), restricting access to residents only, and restrictions on access to LARCs. The APPG also identified growing concerns regarding the impact of restrictions on contraceptive service delivery on the training (and availability of training) of healthcare professionals. Concerns were identified on the fragmentation of sexual health service commissioning, and the potential for adverse impacts on the quality of future service provision. 4 HM Treasury, Spending Review, Pulse, GPs Face Bans on High Cost Drugs, 12 April AGC: Sex, Lives and Commissioning, April 2012, p3. 7 AGC, Sex, Lives and Commissioning, April 2012, p18. 8 All Party Parliamentary Group on Sexual and Reproductive Health in the UK, Healthy Women, Healthy Lives? (2012). 18 Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

19 Potential Impacts of Restricting Contraception Services 2.14 The recent All Party Parliamentary Group report on Sexual and Reproductive Health in the UK stressed that women of different ages and in varying circumstances may require access to contraception in alternative forms and in a manner and at a time that suits their needs best. In order to minimise the risk of unintended pregnancy, it is important that contraceptive services are provided in a way that best matches these varying needs Over the past decade or so there has been particular emphasis placed on reducing the levels of teenage pregnancy in the UK. Teenage pregnancy matters greatly, for several reasons: because of health risks to both teenage mother and child because of the damage that teenage pregnancy and motherhood can have on the life chances of the teenage mother (for example, only 30% of teenage mothers are in employment, education or training, compared to 90% of all 16 to 19 year olds) 9 and because of the strong links between teenage pregnancy and social deprivation However, one unintended consequence of the focus of the teenage pregnancy strategy was that there may have been insufficient attention placed on the contraceptive needs of women aged 20 and over. Figures from the ONS confirm that over 80% of abortions take place for women over 20, and the data set out earlier in this section confirms that the number of abortions for women in this group has continued to rise over the past decade The focus of the research is to examine the potential financial, wider economic and social consequences of different levels of access to contraception advice and contraceptive methods. The study focuses on the potential impacts between 2013 and Focus of the Report 2.18 Given this context of increasing rates of unintended pregnancy and STIs, this report focuses on the potential financial and economic impacts of anticipated future constraints on the provision of contraceptive advice and sexual health services in England, and considers the potential consequences were these cuts to be extended across the United Kingdom as a whole In particular, the report focuses on a number of linked aspects associated with rising rates of unintended pregnancy, including the following: The potential impact of reduced levels of contraceptive services and advice on future numbers of unintended pregnancies between 2013 and 2020, the numbers of abortions, miscarriages and live births that would result as a consequence, and the net additional costs to the NHS that would accrue as a result. 9 Department for Health and DFES, Teenage Pregnancy and Sexual Health Marketing Strategy, p ONS Abortion Statistics, Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 19

20 For the additional live births that would result from increased numbers of unintended pregnancies, the report also assesses the potential impacts on public expenditure between 2013 and 2020, including expenditure on health care (post natal), education, welfare services, public sector housing costs, etc. The study also considers the wider economic consequences of unintended pregnancies leading to live births between 2013 and 2020, in terms of aggregate impacts on earnings potential, spending power, tax revenues and investment in human capital (skills and qualifications) In terms of the issues associated with the rising incidence of sexually transmitted infections, the report focuses on the current levels of direct medical costs of STI treatment, and also considers three future scenarios for rates of STI diagnosis between 2013 and The period 2013 to 2020 was selected as the main timeframe for the analysis in this report to provide a sufficient elapse of time for some of the medium-term implications of unintended pregnancy in particular to become manifest, but without focusing on an end point that is so far ahead in time that policy-makers and other stakeholders risk losing sight of the implications of the findings. 20 Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

21 Section 3 The Potential Financial Costs to the NHS of Unintended Pregnancies Introduction 3.1 This section aims: to provide some additional context for recent trends in unintended pregnancies in the UK (focusing in particular on data for England and Wales) to set out the basis upon which different scenarios for future rates of unintended pregnancies and outcomes for abortions, miscarriages and live births are based and to expand the scenarios, and set out the results for potential future medical costs of unintended pregnancies. Context Population Trends 3.2 ONS population projections (2010) have been used to estimate the number of females of child-bearing age in the UK. The table below sets out the projected numbers of females aged 13 through 19, and for age groups 20 to 24 up to 40 to 49, for each year from 2013 to Overall, the number of women aged 13 to 49 in the UK is expected to decline slightly between 2013 and 2020, from million (2013) to million (2020). This represents a reduction of 1.39% in the relevant female population over this period. 3.4 When more tightly defined age groups are considered, the trends are more mixed: for example, there is expected to be an increase of around 5.5% in the numbers of teenage girls aged 13 15, but a decline in the numbers of year-olds by around 6.6%. Also, the numbers of females is expected to increase by 12%, but those are expected to decline by about the same proportion. Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 21

22 Table 3-1: ONS Population Projections : Number of Women ( 000s) Age , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,076.5 Source: ONS population projections, 2010 Statistics for Unintended Pregnancy 3.5 There are no official statistics that measure the rates of unintended pregnancy in the UK. It is possible, however, to estimate the number of unintended pregnancies by using available statistics on abortions and a number of additional assumptions. 3.6 Abortion rates are an indicator of rates of unintended pregnancy, but they are obviously also influenced by cultural and legal considerations. Overall, there has been a rising trend in long term abortion rates over the past three decades. For England and Wales, the age standardised rate of abortions per 1,000 resident women aged has increased from 8.0 in 1970 to 17.5 in In terms of numbers of abortions, the actual increase reflects both an increased rate of abortions and a (smaller) rate of increase in the number of women of child-bearing age. The actual numbers of legal abortions in England and Wales has increased, according to ONS abortion statistics, from 75,962 in 1970 to 189,574 in The largest share just over 50% of abortions is for women aged Teenagers contribute about 20% of the total, with the remaining 29% made up of women aged 35 or over. 22 Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

23 Table 3-2: Numbers of Legal Abortions by Age Group, Residents of England and Wales, 2010 Age Group Number of Abortions Proportion of Total Under 16 3, % , % , % , % , % 35 or over 27, % Total 189, % Source: ONS Abortion Statistics, Statistical evidence indicates that the number of teenage pregnancies has been falling in recent years. Moreover, the conception rate among under 18s has also fallen, from 47.1 per 1,000 in 1998 to 35.5 per 1,000 in Nevertheless, there are still large numbers of unintended pregnancies among under- 18s, and compared to other Western European countries the conception rate among females under 18 years in the UK is still high Given that there are no official statistics on unintended pregnancies, it is necessary to estimate their number. The main assumption used here is based on written evidence presented to Parliament s Health Select Committee in 2010 by Bayer Schering Pharma 12, which itself was based on evidence gathered by the National Institute for Health and Clinical Excellence (NICE) in 2005, which found that 40.6% of all unintended pregnancies end in abortion. It is also taken as a given that 100% of conceptions for females under 16 are unintended because of their age, as the legal age of consent is 16, and that 80% of conceptions among 18 and 19 year olds are unintended The approach to estimating the number of unintended pregnancies is to divide the number of abortions performed on adult women by a factor of To these are added all conceptions for females aged 17 and under, and 80% of conceptions for females aged 18 and Based on these assumptions it is estimated that there are likely to have been around 450,000 unintended pregnancies in the UK in Of these, under-16s are likely to have contributed 1.7% of the total, with year olds providing a further 18.7%. The majority of unintended pregnancies are likely to have arisen from women aged ONS Conception Statistics, Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 23

24 Table 3-3: Estimates of the Numbers of Unintended Pregnancies in the UK, 2011 Age Group 2011 Proportion of Total Under 16 7, % Source: Development Economics , % , % , % , % , % , % Total 450, % 3.14 For women aged over 19, around 41% of unintended pregnancies end in abortion. A further 13% are estimated to end in miscarriage, with the remaining 46% resulting in a live birth. Based on the estimates set out in the table above, the overall estimates for outcomes are summarised in the following table. Table 3-4: Estimated Outcomes of Unintended Pregnancies in the UK, 2011 Abortions Miscarriages Live Births 182,886 58, ,013 Source: Development Economics Medical Costs of Unintended Pregnancies 3.15 It is possible to calculate estimates of the medical costs of unintended pregnancy using assumptions developed by Bayer Schering Pharma 13, originally based on those made in NICE guidance published in The 2005 cost estimates have been adjusted to 2011 price levels based on average rates of health sector inflation between 2005 and In the table below, we set out the assumed medical costs of each of the three main outcomes of unintended pregnancy. 13 Bayer Schering Pharma, Focus: Tackling Unintended Pregnancy, spring Prices have been adjusted to 2011 levels using assumptions based on Health Service Cost Index Annual Summary 2011/ Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

25 Table 3-5: Assumed Average Medical Costs of Pregnancy Outcomes (2011 prices) Per Live Birth Per Miscarriage Per Abortion 2, Source: Bayer Schering Pharma: Focus: Tackling Unintended Pregnancy, spring 2008, based on NICE Clinical Guidelines No 30 (2005); prices adjusted to 2011 levels using assumptions based on Health Service Cost Index Annual Summary 2011/ Based on these assumptions, the estimated overall annual medical cost of unintended pregnancy in 2011 is estimated to be around 662 million (2011 prices). The largest shares of these costs are expected to be live births (estimated at just over 536 million) and abortions (nearly 106 million). Table 3-6: Estimated Cost of Unintended Pregnancy, UK, 2011 (2011 prices) Outcome Source: Development Economics Cost ( millions) Abortions Miscarriages 19.6 Live births Total The estimates in the table above are broadly in line with other recent estimates. For example, the AGC report of April 2012 estimated that the costs to the NHS in England of unintended pregnancy for women aged 20 and over was 440 million. 15 The estimates here extend to the whole of the UK and cover teenage women as well. Future Scenarios for Unintended Pregnancies 3.18 To assess potential cost implications for the NHS of future rates of unintended pregnancy it is necessary to develop a range of plausible alternative scenarios for the rate of unintended pregnancy in the UK between 2013 and AGC, Sex, Lives and Commissioning, April 2012, p was selected as the end year of analysis because it provides an eight-year period of analysis which is long enough for most forms of direct and indirect cost to become manifest. The main exception is the potential impact on antisocial and criminal behaviour, but taking these into account would require a much longer analytical framework, extending to years and beyond. Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 25

26 3.19 Three scenarios have been designed to assess the three different profiles of costs associated with unintended pregnancy: 1. A current access scenario, that considers the potential impact on future costs assuming that rates of unintended pregnancy and associated outcomes (abortions, miscarriages, live births) continue to occur at the current (2011) rates throughout 2013 to In effect, this scenario models the potential impact of the 2011 (current) access levels throughout 2013 to 2020, but it also reflects the underlying demographic trend in terms of the numbers of women of child-bearing age 17 that are anticipated to be resident in the UK over the relevant period. 2. An improved access scenario, that considers the potential impacts of removing some of the restrictions on access to contraceptive services and choice that have been identified in some areas, and if some of the recent national trends towards improvement in associated performance indicators (especially for teenage pregnancy) were maintained and extended to older age groups of women. 3. A worsened access scenario, that considers the potential impacts on the same indicators, assuming that existing restrictions on access to contraceptive services and choice become more widespread and embedded, and that rates of unintended pregnancy among all age groups of women up to 49 years increase as a result. Projections for Unintended Pregnancy 3.20 Based on the projected number of women of child bearing age (broken down into individual years for women aged 13 19, and into five-year groups for women aged up to 35 39, and a ten-year group for women aged 40 49), it is possible to generate estimates for the number of unintended pregnancies by age group for women in the UK between 2013 and 2020 under each of the three scenarios Based on this approach, the expected annual total of unplanned pregnancies over the next eight years under Scenario 1 is anticipated to lie between 440,000 and 446,000, for Scenario 2 between 413,000 and 438,000 per annum and under Scenario 3 between 448,000 and 461, The cumulative number of unplanned pregnancies between 2013 and 2020 for each scenario is million (Scenario 1), million (Scenario 2) and million (Scenario 3). 17 This report focuses on conception rates for women for the age range 13 years to 49 years. 26 Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

27 Table 3-7: Expected Number of Unintended Pregnancies, Table 3-7: Expected Number of Unintended Pregnancies, (Source Development Economics) Age Scen. 1 Scen. 2 Scen. 3 Scen. 1 Scen. 2 Scen. 3 Scen. 1 Scen. 2 Scen. 3 Scen. 1 Scen. 2 Scen ,789 1,714 1,820 1,739 1,631 1,776 1,711 1,569 1,753 1,706 1,529 1, ,669 5,545 5,792 5,566 5,383 5,710 5,412 5,176 5,576 5,325 5,034 5, ,026 11,580 12,334 11,755 11,102 12,117 11,540 10,685 11,955 11,223 10,184 11, ,398 17,930 18,892 18,541 17,833 19,138 18,124 17,202 18,805 17,793 16,661 18, ,796 23,312 24,186 23,745 23,021 24,264 23,922 22,949 24,575 23,386 22,197 24, ,919 26,919 27,352 26,272 26,272 26,835 26,208 26,208 26,910 26,390 26,390 27, , , , , , , , , , , , , ,887 92,617 94,453 94,835 92,912 95,974 95,338 92,764 97,051 95,795 92,566 98, ,105 67,483 68,528 68,949 68,008 69,802 69,666 68,406 70,953 70,348 68,765 72, ,984 38,534 39,227 39,039 38,364 39,527 39,355 38,450 40,090 39,808 38,667 40, ,198 32,541 33,393 32,998 32,024 33,389 32,698 31,416 33,283 32,361 30,784 33,139 Total 444, , , , , , , , , , , ,809 Age Scen. 1 Scen. 2 Scen. 3 Scen. 1 Scen. 2 Scen. 3 Scen. 1 Scen. 2 Scen. 3 Scen. 1 Scen. 2 Scen ,746 1,528 1,801 1,810 1,547 1,874 1,839 1,533 1,910 1,875 1,954 1, ,309 4,961 5,515 5,432 5,016 5,666 5,632 5,140 5,900 5,720 6,016 5, ,042 9,815 11,552 11,008 9,581 11,573 11,262 9,593 11,897 11,675 12,394 9, ,305 15,984 18,141 17,027 15,512 17,942 16,976 15,249 17,978 17,364 18,483 15, ,959 21,558 23,836 22,337 20,747 23,312 21,984 20,195 23,064 21,919 23,114 19, ,801 25,801 26,770 25,339 25,339 26,426 24,667 24,667 25,857 24,285 25,587 24, , , , , , , , , , , , , ,136 92,252 99,004 95,869 91,358 99,306 95,483 90,352 99,481 94,654 99,197 88, ,147 69,234 73,316 72,104 69,856 74,726 72,655 70,075 75,724 72,903 76,411 69, ,315 38,932 41,553 40,743 39,116 42,235 41,114 39,242 42,861 41,432 43,431 39, ,003 30,142 32,973 31,695 29,555 32,855 31,432 29,015 32,781 31,257 32,792 28,555 Total 443, , , , , , , , , , , ,652 Source: Development Economics Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 27

28 Abortions 3.23 In order to estimate the number of NHS abortions (as opposed to those undertaken privately), it is assumed that 100% of abortions for women aged are NHSfunded. For women aged 20+ it is assumed the proportion is 95.5% The annual total of NHS abortions resulting from unplanned pregnancies under Scenario 1 is expected to range between 174,000 and 178,000 over the next eight years. The cumulative total number of abortions between 2013 and 2020 under this scenario is expected to be million. About 23% of these are expected to be accounted for by teenagers (13 19) Under Scenario 2, the total number of expected NHS abortions is anticipated to be around million between 2013 and This is a reduction of just over 53,000 compared to Scenario Under Scenario 3, the annual total of expected NHS abortions is anticipated to range between 186,000 and 196,000 between 2013 and This would result in a cumulative number of NHS abortions of around million over the eight-year period; an increase of just over 126,000 (8.9%) compared to the cumulative total expected under Scenario 1, and 179,000 more than under Scenario 2. Miscarriages 3.27 The expected annual total of miscarriages resulting from unplanned pregnancies under Scenario 1 is expected to range between 51,000 and 53,000 over the next eight years. The cumulative estimated total is just over 415,000 between 2013 and The cumulative total number of expected miscarriages in Scenario 2 between 2013 and 2020 is just under 403,000 amounting to a reduction of 3.1% compared to Scenario 1. The expected number of miscarriages between 2013 and 2020 under Scenario 3 is just over 436,000; an increase of 5.1% on Scenario 1 and 8.2% on Scenario 2. Live Births 3.29 The estimated number of live births from unintended pregnancy is a key result, because of the implications for associated downstream costs including post-natal medical costs, child-related welfare payments, pre-school and early-years education costs, housing costs, etc. which are considered in the next section of this report. The assumptions regarding the numbers of children to whom these eventual costs to the public purse are associated are rooted in the estimates of live births associated with each of the three scenarios For Scenario 1, as shown in Table 3-10 (page 32), the expected cumulative total for live births between 2013 and 2020 totals just over 1.66 million, with an annual total ranging from around 206,000 to around 210, This figure has been obtained from ONS Abortion Statistics for Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

29 3.31 The expected number of cumulative live births between 2013 and 2020 in Scenario 2 is million. This cumulative total is around 62,000 less than is expected under Scenario The expected number of cumulative live births from unintended pregnancies between 2013 and 2020 in Scenario 3 is just under 1.75 million. This is around 83,600 more than expected under the Scenario 1 assumptions (an increase of about 5%). Compared to the Scenario 2 result, the difference is around 145,400 live births (9.1%) The costs to the NHS of abortion, miscarriages and live births arising from unintended pregnancy between 2013 and 2020 are represented in the following tables. Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 29

30 Table 3-8: Expected NHS Abortions from Unintended Pregnancies, Table 3-7: Expected Number of Unintended Pregnancies, (Source Development Economics) Age Scen. 1 Scen. 2 Scen. 3 Scen. 1 Scen. 2 Scen. 3 Scen. 1 Scen. 2 Scen. 3 Scen. 1 Scen. 2 Scen ,161 1,113 1,219 1,129 1,059 1,197 1,111 1,019 1,189 1, , ,220 3,149 3,381 3,161 3,057 3,350 3,074 2,939 3,289 3,024 2,859 3, ,854 5,637 6,147 5,722 5,404 6,065 5,617 5,201 6,011 5,463 4,957 5, ,520 8,304 8,946 8,587 8,259 9,102 8,393 7,966 8,981 8,240 7,716 8, ,817 10,597 11,141 10,793 10,464 11,225 10,874 10,431 11,417 10,630 10,089 11, ,486 12,486 12,860 12,185 12,185 12,673 12,156 12,156 12,763 12,240 12,240 12, ,824 47,336 50,578 47,595 46,866 50,834 46,990 46,031 50,680 46,237 45,058 50, ,598 35,089 37,648 36,154 35,380 38,615 36,490 35,447 39,355 36,812 35,497 40, ,638 24,480 26,057 25,113 24,871 26,822 25,564 25,236 27,572 26,004 25,587 28, ,993 13,846 14,799 13,985 13,764 14,937 14,196 13,897 15,311 14,510 14,129 15, ,048 12,696 13,800 12,843 12,323 13,718 12,598 11,917 13,588 12,332 11,499 13,430 Total 177, , , , , , , , , , , ,741 Age Scen. 1 Scen. 2 Scen. 3 Scen. 1 Scen. 2 Scen. 3 Scen. 1 Scen. 2 Scen. 3 Scen. 1 Scen. 2 Scen , ,235 1,175 1,004 1,293 1, ,325 1, , ,015 2,817 3,286 3,085 2,849 3,393 3,199 2,919 3,550 3,248 2,929 3, ,375 4,778 5,859 5,358 4,664 5,894 5,482 4,670 6,085 5,683 4,736 6, ,014 7,402 8,735 7,886 7,184 8,674 7,862 7,062 8,726 8,042 7,121 9, ,436 9,799 11,166 10,153 9,430 10,966 9,993 9,180 10,892 9,963 9,051 10, ,967 11,967 12,805 11,753 11,753 12,693 11,441 11,441 12,471 11,264 11,264 12, ,650 44,252 50,191 45,150 43,538 50,115 44,621 42,800 49,995 44,097 42,072 49, ,029 35,442 40,712 36,848 35,005 40,899 36,630 34,537 41,041 36,163 33,838 40, ,504 25,994 29,140 27,124 26,515 30,106 27,512 26,807 30,825 27,743 26,943 31, ,852 14,383 16,330 15,150 14,592 16,816 15,431 14,781 17,289 15,699 14,955 17, ,039 11,063 13,237 11,798 10,682 13,095 11,613 10,358 13,011 11,523 10,122 13,032 Total 176, , , , , , , , , , , ,931 Source: Development Economics 30 Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

31 Table 3-9: Expected Miscarriages from Unintended Pregnancies, Table 3-7: Expected Number of Unintended Pregnancies, (Source Development Economics) Age Scen. 1 Scen. 2 Scen. 3 Scen. 1 Scen. 2 Scen. 3 Scen. 1 Scen. 2 Scen. 3 Scen. 1 Scen. 2 Scen ,131 1,102 1,188 1,140 1,096 1,208 1,114 1,057 1,192 1,094 1,024 1, ,631 1,597 1,680 1,627 1,577 1,692 1,639 1,573 1,721 1,603 1,521 1, ,008 2,008 2,069 1,960 1,960 2,038 1,955 1,955 2,053 1,969 1,969 2, ,087 10,974 11,198 11,034 10,865 11,255 10,894 10,672 11,221 10,719 10,446 11, ,555 13,361 13,690 13,766 13,471 14,042 13,894 13,497 14,311 14,017 13,516 14, ,483 12,403 12,608 12,724 12,602 12,978 12,953 12,786 13,341 13,175 12,964 13, ,564 5,506 5,620 5,561 5,473 5,672 5,645 5,526 5,814 5,770 5,618 6, ,817 2,741 2,845 2,773 2,660 2,828 2,720 2,573 2,802 2,662 2,483 2,769 Total 51,425 50,803 52,104 51,709 50,772 52,906 51,915 50,666 53,633 52,087 50,527 54,329 Age Scen. 1 Scen. 2 Scen. 3 Scen. 1 Scen. 2 Scen. 3 Scen. 1 Scen. 2 Scen. 3 Scen. 1 Scen. 2 Scen , ,160 1, ,151 1, ,158 1, , ,573 1,477 1,683 1,531 1,422 1,653 1,506 1,384 1,642 1,502 1,364 1, ,925 1,925 2,060 1,891 1,891 2,042 1,840 1,840 2,006 1,812 1,812 1, ,583 10,259 11,112 10,467 10,094 11,095 10,345 9,923 11,069 10,223 9,754 11, ,099 13,495 14,804 14,031 13,329 14,872 13,948 13,151 14,924 13,770 12,885 14, ,429 13,170 14,100 13,743 13,435 14,567 13,940 13,582 14,915 14,057 13,651 15, ,906 5,719 6,201 6,024 5,802 6,386 6,136 5,878 6,565 6,243 5,947 6, ,599 2,389 2,729 2,547 2,306 2,700 2,507 2,236 2,683 2,488 2,185 2,687 Total 52,248 50,377 55,015 52,358 50,181 55,653 52,372 49,886 56,191 52,300 49,507 56,638 Source: Development Economics Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 31

32 Table 3-10: Expected Live Births from Unintended Pregnancies, Age Scen. 1 Scen. 2 Scen. 3 Scen. 1 Scen. 2 Scen. 3 Scen. 1 Scen. 2 Scen. 3 Scen. 1 Scen. 2 Scen ,129 2,082 2,235 2,090 2,021 2,215 2,032 1,943 2,174 1,999 1,890 2, ,465 5,263 5,739 5,342 5,045 5,663 5,244 4,856 5,612 5,100 4,628 5, ,747 8,524 9,184 8,814 8,478 9,343 8,616 8,178 9,219 8,459 7,921 9, ,349 11,118 11,690 11,325 10,979 11,778 11,409 10,945 11,980 11,154 10,586 11, ,425 12,425 12,798 12,126 12,126 12,611 12,097 12,097 12,702 12,181 12,181 12, ,232 59,471 60,834 60,446 59,304 61,655 60,480 58,961 62,294 60,476 58,585 62, ,057 42,513 43,488 43,210 42,394 44,074 43,234 42,149 44,531 43,232 41,880 44, ,823 29,446 30,121 29,929 29,363 30,527 29,945 29,194 30,844 29,944 29,007 31, ,768 18,531 18,955 18,834 18,479 19,211 18,845 18,372 19,410 18,844 18,255 19, ,717 16,506 16,885 16,777 16,460 17,112 16,786 16,365 17,290 16,785 16,260 17,457 Total 209, , , , , , , , , , , ,248 Cumulative 209, , , , , , , , , , , ,389 Age Scen. 1 Scen. 2 Scen. 3 Scen. 1 Scen. 2 Scen. 3 Scen. 1 Scen. 2 Scen. 3 Scen. 1 Scen. 2 Scen ,993 1,863 2,173 2,039 1,883 2,243 2,115 1,930 2,347 2,148 1,936 2, ,018 4,460 5,470 5,003 4,354 5,503 5,118 4,360 5,681 5,306 4,422 5, ,227 7,599 8,967 8,095 7,374 8,904 8,070 7,249 8,958 8,255 7,310 9, ,950 10,281 11,716 10,653 9,895 11,506 10,485 9,632 11,429 10,454 9,497 11, ,909 11,909 12,743 11,696 11,696 12,632 11,386 11,386 12,410 11,210 11,210 12, ,520 58,257 63,546 60,508 57,878 64,139 60,401 57,406 64,629 60,177 56,821 64, ,263 41,645 45,426 43,255 41,374 45,850 43,178 41,037 46,201 43,018 40,619 46, ,965 28,845 31,464 29,959 28,657 31,757 29,907 28,423 32,000 29,795 28,134 32, ,858 18,152 19,800 18,854 18,034 19,985 18,821 17,887 20,138 18,750 17,705 20, ,797 16,169 17,637 16,794 16,064 17,802 16,765 15,933 17,938 16,702 15,771 18,038 Total 208, , , , , , , , , , , ,091 Cumulative 1,045,059 1,016,748 1,082,012 1,252,560 1,214,491 1,303,042 1,459,460 1,410,259 1,525,501 1,665,944 1,604,203 1,749,592 Source: Development Economics 32 Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

33 Future Costs to the NHS of Unintended Pregnancy 3.34 Given the number of unintended pregnancy outcomes in the preceding tables, the next step is to estimate the potential financial cost to the NHS in 2011 terms of the three types of outcome identified. The unit cost of each of the outcome types is assumed to be as set out in Table 3-3 on page In Scenario 1 the estimated overall cumulative financial costs of unexpected pregnancy to the NHS between 2013 and 2020 are expected to amount to around 5.29 billion (2011 prices). Of this total, 4.29 billion (81%) is accounted for by the medical cost of live births. A further 16% is accounted for by the cost of abortions, with the remaining 3% by the cost of miscarriages The cumulative total of NHS costs for unintended pregnancies ( ) under Scenario 2 is around billion (2011 prices). This represents a reduction in NHS costs associated with unintended pregnancy of around 3.7% when compared with Scenario The cumulative total of NHS costs for unintended pregnancies ( ) under Scenario 3 is just over 5.59 billion (2011 prices, undiscounted). 19 This compares to estimated future costs of just over 5.29 billion under Scenario 1 and represents a difference of around 5.7% In comparison with the results of Scenario 2, which produced a cumulative total cost between 2013 and 2020 of billion (2011 prices, undiscounted), Scenario 3 performs even less well. The undiscounted cumulative out-turn costs of Scenario 3 are 494 million greater than the second scenario, which is a difference of 8.8% The estimates of future NHS financial expenditures in 2011 terms are shown in Table 3-11 below. Table 3-11: Expected NHS Cost of Unintended Pregnancies, ( millions, 2011 prices) Scenario 1 Indicator Total Live births ,288.2 Abortions Miscarriages Total ,293.9 Source: Development Economics 19 Discounting is a method sometimes used in public expenditure appraisal to convert future costs and benefits to present values using a discount rate (usually 3.5% p.a.). The phrase undiscounted is used a number of times in this report to make it clear that this approach has not been used here. Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 33

34 Table 3-12: Expected NHS Cost of Unintended Pregnancies, ( millions, 2011 prices) Scenario 2 Indicator Total Live births ,129.2 Abortions Miscarriages Total ,098.1 Source: Development Economics Table 3-13: Expected NHS Cost of Unintended Pregnancies, ( millions, 2011 prices) Scenario 3 Indicator Total Live births ,503.5 Abortions Miscarriages Total ,592.5 Source: Development Economics Conclusions 3.40 The overall future cost implications for the NHS as a result of unintended pregnancy under the three future scenarios considered in this report are summarised in the table below. Table 3-14: Expected NHS Cost of Unintended Pregnancies, ( millions, 2011 prices) Scenario 3 Indicator Total Scenario ,293.9 Scenario ,098.1 Scenario ,592.5 Source: Development Economics 3.41 Clearly, even under the most optimistic scenario (Scenario 2), the NHS costs of unintended pregnancy can be expected to be very large indeed over the next eight years, amounting to nearly 5.1 billion. The financial costs associated with the more pessimistic scenario (Scenario 3) are expected to be significantly more; in the order of 100 million per year by 2020, which amounts to a difference of around 16% between the least expensive and most expensive scenario outcomes. 34 Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

35 3.42 The financial impact, therefore, of worsening access to of contraceptive services, compared to improving access, could amount to an average additional expenditure of 62 million per annum (and cumulative additional costs of 494 million) for the NHS over the next eight years By 2020, the trajectory described by Scenario 3 could deliver, compared to the Scenario 1 (current access), direct cashable savings of around 40 million per annum in direct medical costs associated with the implications of unintended pregnancies However, the scale of potential short-term and longer-term NHS costs associated with unintended pregnancy are dwarfed by the cost implications for the public sector as a whole of providing services to families with children that result from unintended pregnancy. These matters are explored in the next section. Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 35

36 Section 4 Other Public Sector Costs Introduction 4.1 This section assesses the wider public expenditure implications of unintended pregnancies, particularly those that lead to live births, under a number of specific themes: expenditure on social welfare programmes public spending on personalised social services education of children that result from unintended pregnancy public health expenditure on mother and child (i.e. post-natal medical costs) housing costs spending on anti-poverty programmes that benefit low income families with children from unintended pregnancies. 4.2 Some areas of public sector expenditure have been excluded from the analysis for a range of reasons, including: There is no robust way to link marginal expenditure on some services (for example, public transport or local environmental services such as leisure facilities) to the additional provision that may be required as a result of additional population growth that is attributable to unintended pregnancy Although there is evidence that links unintended pregnancy and the need for eventual additional expenditure on some areas (for example crime and antisocial behaviour), the time frame used in this report is insufficient to allow the implications to be accurately drawn. 4.3 For both of these reasons, therefore, the estimates of longer-term public sector expenditure considered in this report can be regarded as cautious, and limited to the medium-term. Expected Number of Children from Unintended Pregnancies 4.4 One of the key assumptions used in the consideration of each of the scenarios in the remainder of this section is the number of live births estimated to result from unintended pregnancies for that scenario as set out in Section 3 of this report. 4.5 The same three scenarios outlined in Section 3 will be used to model the impact on public services and the expected number of children in each scenario is outlined below. These models also reflect the underlying demographic trend in terms of the numbers of women of child-bearing age that are anticipated to be resident in the UK over the period up to As with the consideration of medical costs associated with pregnancy and birth, the modelling excludes the wider public sector costs of children born as a result of unintended pregnancy before Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

37 4.7 Scenario 1 is the current access scenario and assumes no change in access to contraceptive services and methods. The estimated increase in the number of children resulting from unintended pregnancies under Scenario 1 is set out in the table below. Table 4-1: Scenario 1, Expected Number of Children from Unintended Pregnancies, UK, Age of Children <1 209, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,344 Total 209, , , ,934 1,045,059 1,252,560 1,459,460 1,665,944 Source: Development Economics 4.8 The table shows, for example, that by 2015 approximately 628,000 children will be born in the UK from unintended pregnancies if current (2011) rates of conceptions and live births are projected forward four years. Of these children, around 209,000 will be 2 3 years old by 2015, with about the same number aged 1 2, and the same number aged less than 1 year. The cumulative number of children expected to have been born by 2020 is estimated to be million. 4.9 Scenario 2 assumes that access to contraceptive services and methods is increased.the estimated increase in the number of children resulting from unintended pregnancies under Scenario 2 is set out in the table below. Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 37

38 Table 4-2: Scenario 2, Expected Number of Children from Unintended Pregnancies, UK, Age of Children <1 206, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,481 Total 206, , , ,036 1,016,748 1,214,491 1,410,259 1,604,203 Source: Development Economics 4.10 The cumulative number of children expected to have been born by 2020 is estimated to be million Scenario 3 assumes access to contraceptive services and methods is restricted further. The estimated increase in the number of children resulting from unintended pregnancies under Scenario 3 is set out in the table below. Table 4-3: Scenario 3, Expected Number of Children from Unintended Pregnancies, UK, Age of Children <1 212, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,592 Total 212, , , ,389 1,082,012 1,303,042 1,525,501 1,749,592 Source: Development Economics 38 Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

39 4.12 The cumulative number of children expected to have been born by 2020 under Scenario 3 is estimated to be million. This is about 5% higher than the Scenario 1 assumptions The rest of this section looks at a number of areas of public spending and models the impact of each of these scenarios on those costs. Social Welfare Spending 4.14 The estimated annual public sector financial liabilities associated with social welfare expenditure are expected to increase in line with the anticipated cumulative increase in the number of children from unintended pregnancies Three items of social welfare spending associated with children have been considered in this report: Child Benefit, Child Tax Credit, and the childcare part of Working Tax Credit. Child Benefit rules are currently changing, and from April 2013 Child Benefit will not be paid to (or, rather, will be clawed back from) higher rate tax-payers Individual entitlements to tax credits in particular are complicated, and depend on household income and other circumstances. The approach taken here, therefore, has been to calculate likely maximum and minimum ranges of public expenditure associated with these programmes, given the current levels of entitlements and the rules that are currently in place The assessment has been undertaken using current (2011) prices. That is, the assessment has been undertaken in a way that disregards the effects of inflation and future inflation-linked increases in benefit entitlements The future expenditure liabilities associated with social welfare payments between 2013 and 2020 are considerably greater than the medical costs associated with unintended pregnancy considered in Section 3 of this report. As we shall see when the other public sector costs are introduced, social welfare costs are the dominant overall contributor to the total likely future stream of financial liabilities within the overarching category of wider public sector costs (i.e. they are the largest single source of the costs assessed in this section) The estimated costs of social welfare under each Scenario are outlined in the tables below. 20 In the case of changes to Child Benefit, the assumptions used reflect the changes that have already been announced and will come into effect from 2013 onwards. Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 39

40 Table 4-4: Scenario 1, 2 and 3 Estimated Social Welfare Costs Associated with Children from Unintended Pregnancies, , ( millions, 2011 prices) Scenario 1 Scenario 2 Scenario 3 Minimum Maximum Minimum Maximum Minimum Maximum , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,147.3 Source: Development Economics 4.20 Under Scenario 1, the likely range of welfare payments associated with the numbers of additional live births is estimated to lie between billion and billion between 2013 and Under Scenario 2, the figures lie between billion and , and under Scenario 3 between billion and billion (all 2011 prices). Personal Social Services 4.21 Personal social services (PSS) for children refers to statutory requirements for public expenditure on care, support, guidance and regulation with respect to children who experience abuse, neglect, disability, low income, absence of parents, etc This category concerns those children identified as being in need and where a statutory responsibility usually on the part of a local authority comes into play. Expenditure on PSS is strongly associated with poverty and deprivation: around two-thirds of all children s PSS spending is linked to poverty and deprivation Evidence from the Joseph Rowntree Foundation (JRF) 21 indicates that the average amount of expenditure per child in average circumstances on personal social services was 747 per annum in To bring this estimate up to 2011 prices, an inflation adjustment (covering average price inflation) was made. The result of this adjustment was that average annual expenditure on PSS is estimated to be 863 in 2011 terms. 21 Joseph Rowntree Foundation: The Public Service Costs of Child Poverty, (2008). 40 Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

41 4.24 However, the same JRF report also found that PSS expenditure in areas where all the children were poor was significantly higher: in 2005 terms this expenditure was found to up be to 3.9 times higher per child at 2,928 each year. Adjusting the spending for poorer children into 2011 financial terms (i.e. allowing for inflation), average spend per child could be as high as 3,328 per child each year For PSS spend, a range is estimated. The lower estimate of costs would apply if all children resulting from unintended pregnancy were born into average socio-economic circumstances. The higher range would apply if all children are born into deprived socio-economic circumstances. The outcome is likely to be somewhere between these two levels, because evidence suggests that levels of unintended pregnancy are linked to the socio-economic circumstances of the mother The range of expenditure on PSS under each scenario is outlined in the table below. Table 4-5: Scenario 1, Estimated Expenditure on Personal Social Services Associated with Children from Unintended Pregnancies, , ( millions, 2011 prices) Scenario 1 Scenario 2 Scenario 3 Minimum Maximum Minimum Maximum Minimum Maximum , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,601.7 Source: Development Economics 4.27 Between 2013 and 2020, the likely range of payments on personal social services under Scenario 1 is estimated to lie between billion and billion, under Scenario 2 between billion and billion, and in Scenario 3 between billion and billion (all 2011 prices). 22 Using abortion statistics as a proxy for unintended pregnancy, there is a clear link between abortion rates at a local authority level are correlated with local authority Index of Multiple Deprivation scores. Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 41

42 Education of Children 4.28 Three types of education spending have been considered in this assessment. First, we have considered the costs of pre-school education for the proportion of children that attend. Second, we have included the costs of primary school education. Third, we have included an increment for expenditure on children with special education needs Children in their fifth year are required to attend primary school. In the preceding year, publicly funded pre-school education is also available. Approximately 85% of parents take advantage of the opportunity for state funded pre-school education for their children Within the terms of reference for this report, the overall lifetime costs of educating children born as a result of unintended pregnancy would be significantly underestimated because of the limitations of the timeframe of our analysis. In order to address this short-coming, an additional estimate has been made of the potential full cost to the public purse of the compulsory years education of children resulting from unintended pregnancy. These additional post-2020 costs are excluded from the summary tables It is also assumed that all children receiving education will be in receipt of publicly funded education; in reality, a small proportion of children from unintended pregnancies are likely to be privately educated, but as the proportion cannot be readily estimated (and it is assumed is likely to be small) it has not been taken into account In terms of 2011 prices, data from the Department for Education, the Scottish Government and the National Assembly for Wales has allowed for the development of the following assumptions regarding the overall average public sector investment in education for the relevant years: Pre-school education: 2,333 per child per year Primary school education: 3,159 per child per year 4.33 In addition, it is assumed that up to 2.5% of children will qualify for additional expenditure for special educational needs (SEN). Across the primary school population as a whole the proportion of children with special needs is higher, but the diagnoses may not occur until children are older and, even if early diagnosis is made, special interventions may be delayed. To take account of the potential delays in diagnosis and interventions, we have assumed that the proportion of children in receipt of funded SEN interventions increases from 1.0% in 2016 to 2.5% by Data from the Department for Education suggests that the overall average additional expenditure in primary school (2011 prices) for SEN is 769 per child, and that is the assumption used here Based on these assumptions, the estimated amount of additional education expenditure associated with live births from unintended pregnancies in each scenario is as set out in Table 4-6. Across all three scenarios, cumulative public expenditure of between and billion might be expected to be incurred between 2013 and Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

43 Table 4-6: Estimated Education Expenditure from Unintended Pregnancies, ( millions, 2011 prices) Age of children Scenario 1 Pre-school children (3 4) ,072 Primary education (4 8) ,323 1,984 2,644 6,613 Special education needs Total Scenario ,078 1,743 2,408 3,073 8,717 Scenario 2 Pre-school children (3 4) ,016.3 Primary education (4 8) , , , ,477.6 Special education needs Total Scenario , , , , ,525.4 Scenario 3 Pre-school children (3 4) ,524 Primary education (4 8) ,350 2,035 2,724 6,781 Special education needs Total Scenario ,174 1,861 2,554 3,250 9,335 Source: Development Economics 4.36 An additional factor that needs to be taken into account is the extent of child poverty experienced by children from unintended pregnancies, and the impact this would have on average public expenditure per child on education. Research by the JRF suggests that local authority funded schools serving areas with higher incidences of child poverty spend around 19% more per pupil than average (for example, on items such as free school meals and additional teacher support) On that basis, the estimates provided in the table above could be up to 19% greater if all the children from unintended pregnancies were affected by poverty. In reality, this is unlikely to be the case, but it does suggest that the range of actual cumulative expenditure between 2016 and 2020 could lie between billion and billion under Scenario 2 (improved access) the most optimistic scenario Because this report focuses only on the period up to 2020, the longer-term costs of educating children that result from unintended pregnancy are under-estimated significantly. As an adjunct to the main focus of the report, therefore, the average lifetime costs of educating each child resulting from an unintended pregnancy have also been estimated. Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 43

44 4.39 Based on data from the Department for Education, the average cost of secondary school education is estimated to be 5,353 per pupil per annum (2011 prices). On that basis, we estimate that the overall costs per child attending a state-funded primary school, in 2011 price terms, would be 18,954, and the overall costs for secondary education up to 18 would be 37, Therefore, the total liability for the public sector that could be incurred in order to supply pre-school, primary and secondary education for all the children expected to be born as a result of unplanned pregnancy could be between 90.5 billion (Scenario 2) and 98.7 billion (Scenario 3) in 2011 terms. This should be considered a crude estimate, however, because on the one hand it excludes the likely full cost of additional expenditure to meet special educational needs, and on the other it assumes that all of the children would be educated at public expense, whereas in reality a small proportion may be educated privately. Public Health Programmes 4.41 For children born as a result of unintended pregnancy, there will be additional postbirth health care costs for babies, infants and children up to the age of 7 between 2013 and 2020 that should also be taken into account. These costs include health care for babies, infants and children up to age Data published by the JRF 23 suggests that average healthcare expenditure per child per annum is in the order of 339 per annum, covering both acute and non-acute health care. On this basis, the cumulative health costs for children resulting from unintended pregnancies between 2013 and 2020 are shown in the table below. For Scenario 1, these would amount to billion, billion in Scenario 2 and (2011 prices) and around 7.4% higher for Scenario 3 at billion. Table 4-7: Estimated Child Healthcare Expenditure from Unintended Pregnancies, , ( millions, 2011 prices) Scenario ,264.1 Scenario ,194.1 Scenario ,357.1 Source: Development Economics 23 Joseph Rowntree Foundation: The Public Service Costs of Child Poverty, (2008). 44 Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

45 4.43 However, JRF research also indicates that children in areas affected by high levels of poverty require additional investment in health care, due to increased propensity to suffer episodes of sickness as well as chronic ailments. Overall, health expenditure on children experiencing poverty can be up to 82% greater than on a child in average circumstances In reality, not all children that result from unintended pregnancy will encounter acute poverty, but given that poverty is linked to unintended pregnancy the likely out-turn could reach 4.29 billion at the upper end of Scenario 3 (all in 2011 prices, undiscounted). Housing 4.45 A comprehensive assessment of the housing costs associated with additional children born as a result of unintended pregnancy would encompass matters such as the need for additional investment in social housing capital programmes and in bringing inadequate existing housing up to decent homes standard. Undertaking such an allencompassing assessment is beyond the scope of this study However, it is possible to generate estimates of additional significant liabilities for public expenditure in the form of housing benefit that is likely to be paid to qualifying households that have additional children as a result of unintended pregnancy. Based on data obtained from the Department for Work & Pensions (DWP), it is estimated that additional housing benefit paid to qualifying households per additional child averages 1,182 per annum (2011 prices) On average, according to ONS data, around 21% of households qualify for housing benefit. On this basis, if the incidence of unintended pregnancy followed the average pattern, then the potential future liability for additional housing benefit payments would amount to between billion under Scenario 2 to billion under Scenario 3 between 2013 and 2020, as shown in Table 4-8 (page 46). The table also shows a maximum figure for each scenario representing the impact if all households qualified for housing benefit. Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 45

46 Table 4-8: Scenario 1, Estimated Expenditure on Housing Benefit Associated with Children from Unintended Pregnancies, , ( millions, 2011 prices) Scenario 1 Scenario 2 Scenario 3 Minimum Maximum Minimum Maximum Minimum Maximum , , , , , , , , , , , , , , , , , ,218.6 Source: Development Economics Anti-Poverty Programmes 4.48 A final area for consideration is the additional spending on children residing in areas that qualify for anti-poverty programmes. Although a comprehensive assessment of the regeneration programme costs that might be relevant to additional children born as a result of unintended pregnancy is beyond the scope of this study, it is possible to factor some of these costs into the assessment by including an allowance for expenditure on early intervention programmes in areas suffering high levels of deprivation Information from the Department for Education and Skills (as was) regarding the interim evaluation of the Sure Start programme indicate that average expenditure per child in areas qualifying for regeneration funding was 1,175 per annum (this figure has been adjusted to 2011 price terms). Based on a cautious assumption that 21% of children born as a result of unintended pregnancies reside in qualifying areas, the on-going public sector expenditure liability would be approximately billion between 2013 and 2020 under Scenario 1, billion under Scenario 2, and billion under Scenario Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

47 Table 4-9: Estimated Expenditure on Anti-poverty Measures Associated with Children from Unintended Pregnancies, , ( millions, 2011 prices) Scenario ,328.2 Scenario ,266.0 Scenario ,409.3 Source: Development Economics Summary and Conclusions 4.50 The table below provides a summary of the potential public sector expenditure implications of the numbers of children born as a result of unintended pregnancies between 2013 and For the relevant measures, the table sets out the end points of the range of potential values (minimum and maximum) that have been developed in this section of the report. Table 4-10: Cumulative Wider Public Sector Cost, Scenarios 1 3, , ( millions, 2011 prices) Scenario 1 Scenario 2 Scenario 3 Expenditure Area Minimum Maximum Minimum Maximum Minimum Maximum Social Welfare 52,347 66,996 50,488 64,588 58,993 74,147 Personalised Social Services 5,764 23,650 5,586 22,933 6,001 24,602 Education 8,717 10,374 8,525 10,145 9,335 11,109 Post-natal Health Care 2,264 4,121 2,194 3,993 2,357 4,290 Housing 1,658 7,894 1,607 7,650 1,726 8,219 Anti-poverty Programmes 2,328 2,328 2,266 2,266 2,409 2,409 Total 73, ,363 70, ,576 80, ,776 Source: Development Economics Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 47

48 4.51 The conclusions regarding the range of potential future wider public expenditure costs associated with children born as a result of unintended pregnancies between 2013 and 2020 are as follows: the lower estimate is for a total of between and billion over the 2013 to 2020 period the high end estimate is for a total of between billion and billion between 2013 and 2020 social welfare costs are the main source of potential future financial liabilities, with welfare accounting for more than 71% of potential future spending under the average out-turn It is important to recognise that in limiting the analysis to 2013 to 2020, the estimates provided above are for only a proportion of the long-term public expenditure liabilities associated with unintended pregnancy. Education costs are a case in point: between 2013 and 2020 the estimated costs of education in Scenario 1 would likely lie in a range between 8.7 billion and 10.4 billion. But taking into account education costs for all children born as a result of unintended pregnancies between 2013 and 2020, the total costs could amount to around 94 billion between 2013 and Overall, in comparison with Scenario 1, the lower and higher estimates for future public sector expenditures under Scenario 3 are increased by between 8.6% and 10.2%. Moreover, in comparison with the Scenario 2, the Scenario 3 lower and higher estimates for future public sector expenditures are increased by between 11.8% and 14.4% The scale of cost implications for the public sector for matters such as social welfare spending, education and housing that follow births from unintended pregnancies are far greater than the medical costs that were explored in Section 3 of this report. For example, the medical costs associated with Scenario 1 identified in Section 3 were estimated to be billion in cumulative terms between 2013 and 2020, whereas the wider public sector costs associated with the same scenario range from a minimum of billion to a maximum of billion over the same period By 2020, the trajectory described by Scenario 3 could deliver, compared to the Scenario 1 (current access levels), direct cashable savings of around 864 million per annum in wider public sector costs associated with the implications of unintended pregnancies. 48 Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

49 Section 5 Additional Longer-Term Economic Impacts Introduction 5.1 The purpose of this section is to examine the longer-term economic impacts of unintended parenthood that is, unintended pregnancies that lead to live births. The assessment focuses in particular on the impacts on the mother, in terms of future rates of labour market participation, earnings potential and spending power, and in particular on two aspects: the potential impacts of unintended motherhood on teenage mothers (i.e. women who have yet to complete their compulsory years and/or under-graduate education) and the potential impact on mothers who have already started their careers. 5.2 We have taken this approach because although there is evidence of significant impact on long-term earnings on mothers who have started their careers, evidence suggests the longer-term impacts on the earnings potential of women who have yet to complete their education and/or gain qualifications is potentially much greater. Qualifications and Earnings Potential of Teenage Mothers 5.3 One of the most significant outcomes of teenage pregnancies that lead to live births is the negative effect on future employment and earnings potential of the teenage mother. According to the Teenage Pregnancy and Sexual Health Marketing Strategy published jointly by the Department of Health and the Department for Children, Schools and Families in November 2009, almost 40% of teenage mothers possess no educational qualifications. Moreover, only 30% of teenage mothers are in employment, education or training, compared to 90% of all year olds According to a report published by the Monument Trust (the Sainsbury Family Charitable Trust) mothers aged under 20 are much more likely to live in deprived neighbourhoods, and are 22% more likely to be living in poverty by age 30 compared to mothers giving birth aged 24 years or over. Also, according to the same source, teenage mothers are 20% more likely to have no qualifications by age 30, compared to a mother giving birth aged 24 or over Teenage Pregnancy and Sexual Health Marketing Strategy, November 2009, p Reducing teenage pregnancies and their negative effects in the UK, Lemos & Crane, Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 49

50 5.5 Data published by the ONS confirms that, unsurprisingly, individuals with lower levels of qualifications tend to have lower earnings potential. The table below, which is based on data from both the Labour Force Survey (LFS) and the Annual Survey of Hours and Earnings (both published by the Office for National Statistics), shows that average earnings by females for all age groups are positively correlated with the highest educational qualification achieved. For example, women with degree or equivalent qualifications aged earn on average 122.2% of the average earnings for their age group, whereas women with no qualifications earn only 76.7% of their age group average. Table 5-1: The Relationship Between Qualifications and Earnings for Females in the UK, 2010 (average earnings by age group = 100.0) Highest qualification All ages (21 60) Degree or equivalent Higher education GCE A level or equivalent GCSE grades A C or equivalent Other qualifications No qualification All qualifications Source: Development Economics, based on data from the LFS and Annual Survey of Hours and Earnings 5.6 It is also worth noting that the earnings gap between women with higher level qualifications and those with no qualifications tends to widen with age. For example, women with degree qualifications or equivalent aged 36 up to 55 tend to earn around 55 60% more than their age group average, whereas women with no qualifications tend to earn 35 40% less than average for their age group. Thus, the financial impact on teenage mothers who fail to achieve qualifications can extend over their whole working lifetimes. 50 Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

51 5.7 Furthermore, over time, individuals with no or very low qualifications tend to see their earnings increase less rapidly in comparison to other groups in the workforce. 26 This is because individuals with no qualifications if they are in work tend to work in industries that achieve lower rates of long-term productivity growth compared to more knowledge-intensive sectors and the average for the economy as a whole. 5.8 The qualifier if they are in work is an important one, because there is also ample evidence that young women (as well as men) tend to have much reduced chances of being in employment if they have no qualifications. According to the Annual Population Survey, the average employment rate for working-age people in Great Britain is about 71%, but for working-age people with no qualifications the average employment rate is only 41%. 5.9 Other evidence, from the Labour Force Survey, also confirms that young people s chances of being out of work but wanting work are significantly greater for individuals who lack qualifications. The data in the chart below, sourced from the ONS Labour Force Survey, focuses on the experiences of young people aged who are either unemployed or economically inactive (i.e. neither in employment or actively seeking work) but who report they would like a job Thus, for several reasons, teenage pregnancy can have long-term consequences (as well as short-term impacts) in terms of reduced earnings potential for teenage mothers, unless they are able to recover lost ground with their peers and gain qualifications at a later date This shows that any factor that tends to constrain the ability of women to achieve educational qualifications is likely to have a significant impact on their career earnings potential. Given the reported tendency for teenage mothers to not participate in employment, education or training, and to have a greater likelihood of reaching their 20s with no qualifications, episodes of teenage pregnancy and motherhood can clearly have a very substantial impact on both short-term and longer-term earnings potential of young women As has already been mentioned, by the age of 30, teenage mothers are 22% more likely to be living in poverty compared to women giving birth aged 24 or more. There is also strong evidence that teenage motherhood and resultant poverty can lead to inter-generational disadvantage. Differences in educational outcome by income and socio-economic background are apparent at an early age and the inequalities tend to widen with age. 27 Children from lower income households tend to receive lower quality school education and achieve worse educational outcomes compared to children from average income households. 28 Children growing up in low income households also tend to require more remedial help or have special educational needs compared to their peers on average incomes or better Labour market and skill trends 1997/98, Skills and Enterprise Network, DfEE, 1997, p HM Treasury (2008) Ending Child Poverty: Everybody s Business. 28 Horgan (2007) The Impact of Poverty on Young Children s Experience of School, published by the Joseph Rowntree Foundation. 29 Hirsch (2007) Child Poverty and Education Inequalities, published by the Child Poverty Action Group. Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 51

52 5.13 Furthermore, children from low income households tend to leave school earlier, and are around six times more likely to leave school without qualifications compared to children from higher income households. These differences also lead on to differential rates of participation in higher education, so children from low income households tend to have lower levels of qualifications (and earnings) as adults. Moreover, young people growing up in low-income households are also more likely to be unemployed, to be working in low paid or unskilled jobs, and to be poorly paid in adult life Based on the contextual data discussed above, an attempt has been made to quantify the medium-term impacts of teenage and young mothers failing to gain qualifications. Setting aside higher rates of unemployment and economic inactivity among young mothers, assuming that an individual gains employment, the medium-term impacts on earnings potential can be profound Focusing on vocational qualifications, of course, the exact levels of earnings disparities between workers with qualifications versus workers with no qualifications will be dependent on the particular industrial sector within which the individual works. But taken as a whole, the annual difference in average annual earnings between a young person gaining Level 2 vocational qualifications and a young person with no qualifications is 2,771. The average annual difference in earnings for a person with Level 3 qualifications, compared to no qualifications, is 3, Over a period of eight years, based on 2011 prices, the gains in before-tax earnings can therefore range from 21,768 (Level 2) to 27,816 (Level 3) compared to a young person with no qualifications. Impact on Earnings for Women Aged 20 and Over 5.17 So far we have considered the potential impact of teenage motherhood on future income levels etc. of the mothers, and of the potential intergenerational impacts on the socio-economic outcomes for their children A second topic that is also important in terms of longer-term economic effects of unintended pregnancy is the impacts on earnings potential of mothers aged over 20 who have already completed their education Evidence from the United States suggests that women who have children experience on average, a 5% per child earnings loss once all other educational and occupational factors that influence earnings have been accounted for. 31 Other studies have also shown that the average pay gap between mothers and non-mothers of the same age and with the same levels of educational attainment is greater than between women and men TUC (2007) Cutting the Cost of Child Poverty. 31 Anderson, Binder and Krause (2003) The Motherhood Wage Penalty Revisited, Industrial & Labour Relations Review, 56: Crittenden (2001) The Price of Motherhood: why the most important job in the world is still the least valued. 52 Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

53 5.20 The size of the motherhood pay gap has not been as extensively researched in the UK at it has been in the United States. However, unpublished academic research suggests that the size of the motherhood gap may be as large as 10% per child, which is significantly larger than the average reported from US evidence The causes of the larger size of the motherhood penalty in the UK are not known with great certainty, but it may be due to a greater proportion of women returning to work in a part-time capacity. Certainly, a greater proportion of women work parttime in the UK compared to most other western countries: 33 On average, 26.4% of women workers in Organisation for Economic Cooperation and Development (OECD) member states work in part-time jobs. In the 15 Western EU member states, 31.7% of women workers work in part-time jobs. In the UK the proportion of women workers working part-time is 38.8% Obviously, part-time workers earn less because they are working fewer hours, but a second problem is that part-time workers also tend to be paid less than average for each hour they work. Moreover, female part-time workers suffer a double penalty, because the gender pay gap the difference in hourly earnings for men compared to women is greater for part-time workers: a recent report published by the TUC estimated that in 2007 the full-time gender pay gap in the UK was 17.2%, whereas the part-time gender pay gap was 35.6% In order to estimate the potential scale of the motherhood penalty in the UK for non-teenage mothers, we have considered average female earnings for women in age groups 22 29, and which are the standard age groupings used by the ONS in its Annual Survey of Hours and Earnings. Based on evidence from the US and UK, the potential size of the gap probably lies within the range 5% to 10% of earnings. Given the average level of earnings in each age group this implies that the size of the gap is in the order of 1,138 p.a. up to 2,277 p.a. for a woman in her 20s, rising to 1,468 to 2,937 for a women in her 40s (all 2011 prices). Table 5-2: Potential Motherhood Earnings Gap (gross), 2011 Age Band Mean Annual Earnings 5% gap 10% gap ,766 1,138 2, ,014 1,501 3, ,370 1,468 2,937 Source: Development Economics, based on data from the Annual Survey of Hours and Earnings 33 Labour Force Statistics, OECD, 2007, p TUC (2007), Closing the Gender Pay Gap. Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 53

54 Future Scenarios Impact on Income, Tax and Spending Power 5.24 It is possible to gauge in broad terms the potential impacts of unintended pregnancy leading to live births on the earnings of mothers if a number of assumptions are made Estimates of lost income to mothers are calculated by applying an estimated per child loss of gross income (i.e. before tax and national insurance deductions) for each mother in the following age bands. Teenage mother (as defined on page 49): 2,771 p.a : 1,707 p.a : 2,251 p.a. 40+: 2,202. (20 and 21 year olds are not covered by the standard age groupings in the ONS Annual Survey of Hours and Earnings.) 5.26 The loss of earnings is assumed to occur in the year following the birth of the child, and to continue at that rate for the remainder of the period up to The exception is for teenage mothers, who are assumed to not begin work until they are In terms of income tax and national insurance contributions, it is assumed that basic rates of tax and standard rates of NI contributions would have been paid on the aggregate earnings that are estimated as having been lost under each scenario Based on these assumptions, the cumulative loss of earnings by mothers between 2013 and 2020 under Scenario 1 is estimated to be just over 2.51 billion. Cumulative costs under Scenario 2 are estimated to be 90 million lower than for Scenario 1, and those for Scenario 3 are anticipated to be 113 million greater. The overall spread of lost cumulative earnings in the economy is therefore estimated at 212 million by Of course, beyond 2020, these costs will continue to be incurred, but they have not been estimated as part of this study. Table 5-3: Potential Loss of Earnings and Income-Related Tax Revenues, (2011 prices) Scenario Aggregate Lost Annual Earnings by 2020 Cumulative Lost Cumulative Lost Tax Earnings Revenues by 2020 Scenario million - 2,511 million million Scenario million - 2,421 million million Scenario million - 2,633 million million Source: Development Economics 54 Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

55 5.29 This loss of earnings (and associated spending power) will, through the workings of income multipliers, have the potential to generate a further knock-on impact on economic output in the UK economy worth between 3.52 billion and 3.81 billion between 2013 and In terms of lost income tax revenues and personal national insurance contributions, these are estimated to be around 803 million in cumulative terms by Under Scenario 2 the losses are expected to be 28 million less (compared to Scenario 1) by 2020, and under Scenario 3 they would be 40 million more than Scenario 1. Other Issues 5.31 Some of the most significant impacts of unintended pregnancy and childbirth stem from the impact on the educational attainment and long-term earnings potential of teenage and younger mothers. Households that originate with a teenage mother tend to live in deprived areas, have lower incomes and are more likely to be dependent on benefits. Longer-term, teenage mothers tend to continue to possess lower levels of qualifications and have reduced earnings potential: moreover, the potential inter-generational impacts mean that children from low income households associated with teenage and younger mothers also tend to do less well at school and/or leave full-time education earlier, with resulting negative effects on their own longer-term earnings potential Moreover, the link between teenage motherhood and lower levels of employment and economic activity is a potential cost to the wider economy, in terms of lost earnings, productive potential, competitiveness and spending power. Young people and adults who are not in work, or who are working part-time involuntarily (i.e. they would like to work full-time but cannot) is a cost to the economy in terms of lost tax revenues, lost expenditure potential, additional benefit entitlements and (in the current state of large scale public sector deficits) an additional burden on national debt servicing costs Lower levels of participation in post compulsory years education, together with lower employment rates and lower levels of earnings will also produce negative effects for the public exchequer. The effect is on both the income and spending sides of the equation. On the income side, lower earnings mean less direct (income related) and indirect (expenditure related) taxes paid. On the expenditure side, lower levels of earnings means greater levels of entitlement for means-tested benefits such as income support and tax credits. Conclusions 5.34 This section has focused on the potential impact of unintended motherhood on the medium-to-long-term earnings potential of both teenage and older mothers. Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 55

56 5.35 The findings are that the potential aggregate loss of gross earnings to both groups between 2013 and 2020 range from billion to billion by 2020 (2011 prices) This loss of earnings (and associated spending power) has the potential to generate a further knock-on impact on economic output in the UK economy worth in total some 3.52 to 3.81 billion between 2013 and This range of potential lost earnings also has an implication for the potential loss to the public exchequer of income tax revenues and national insurance contributions. Potential losses to the exchequer range from 775 million to 843 million between 2013 and This estimate excludes additional tax revenues from consumption taxes (VAT and excise duties) associated with higher levels of spending had the loss in aggregate earnings potential not occurred The potential impacts on lost earnings from unintended motherhood can have longer-term impacts that will accrue long beyond 2020, particularly for women who never attain qualifications that allow them to achieve higher levels of earnings. It is important to recognise that, by the age of 30, women who were teenage mothers are 22% more likely to be living in poverty compared to women giving birth aged 24 or more There is also compelling evidence that teenage motherhood and resultant poverty can lead to inter-generational disadvantage. Differences in educational outcome by income and socio-economic background are apparent at an early age and the inequalities tend to widen with age. Children from lower income households tend to receive lower quality school education and achieve worse educational outcomes compared to children from average income households. Children growing up in low income households also tend to require more remedial help or have special educational needs compared to their peers in households on average incomes or better Furthermore, children from low income households tend to leave school earlier, and are around six times more likely to leave school without qualifications compared to children from higher income households. These differences also lead to differential rates of participation in higher education, so children from low income households tend to have lower levels of qualifications (and earnings) as adults. Moreover, young people growing up in low-income households are also more likely to be unemployed, to be working in low paid or unskilled jobs, and to be poorly paid in adult life. 56 Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

57 Section 6 The Financial Costs and Wider Impacts of Sexually Transmitted Infections 6.1 Sections 3 to 5 of this report have dealt with the financial and economic costs associated with unintended pregnancy. The purpose of this section is to consider the financial and economic implications of a different aspect of sexual health, namely the transmission of sexually transmitted infections (STIs). 6.2 Specifically, this section estimates the scale of current direct medical costs associated with treating newly diagnosed sexually transmitted infections, and to estimate what future costs might be under various alternative scenarios for changes in rates of new infections. The infections covered in this section include a number of STIs such as chlamydia, gonorrhoea, herpes and syphilis, but HIV is not included in the assessment. Overview 6.3 It became increasingly recognised towards the end of the 1990s that rates of diagnosis of new cases of sexually transmitted infections (STIs) in the UK had increased significantly compared to a decade earlier, and that this phenomenon was associated with increased public health costs and wider costs to society. 6.4 According to data from the Health Protection Agency, the number of visits to departments of genito-urinary medicine doubled between 1990 and 2000, and the rate at which cases of specific sexually transmitted infections were diagnosed also tended to increase significantly over the same period. The main source of the increase was the significant increase in the rate at which genital chlamydia was diagnosed: in 1990 the rate for the UK was 58.0 new diagnoses per 100,000 population, but by 2000 this had increased to per 100,000 population. The rate at which new cases of gonorrhoea was being diagnosed in the UK also increased, by around 10%, over the same period. 6.5 Sexually transmitted infections can have long-term impacts on patient health. For example, chlamydia can also result in pelvic inflammatory disease (PID) which can lead to ectopic pregnancy and infertility. Other longer-term health and other problems that can be consequences of sexually transmitted infections include: Chlamydia: babies born to infected mothers suffer increased risk of conjunctivitis and pneumonia Gonorrhoea: PID, ectopic pregnancy and infertility Syphilis: disability, in rare cases death; syphilis in pregnant women can lead to miscarriage or stillbirth Genital herpes: potentially dangerous to the foetus during pregnancy. Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 57

58 6.6 There is also an equality dimension to STIs. Incidence of STIs is highest among women, gay men, teenagers, young adults and some minority ethnic groups. 35 There is also a strong link between social deprivation and STIs: data from Local Health Authorities across England suggests that rates of incidence of gonorrhoea in the most highly deprived areas are around eight times that of the least deprived areas. 36 Sexual Behaviour 6.7 Sexual behaviour among human populations is a significant determinant of rates of sexually transmitted infections. There is evidence that sexual behaviour in the UK has changed significantly in recent decades, and that increased incidence of certain behaviours has resulted in substantial increases in the incidence of certain STIs. 6.8 Empirical evidence of changes in sexual behaviours has been obtained from the two National Surveys of Sexual Attitudes and Lifestyles (Natsal), firstly in 1990/91 (Natsal 1990) and again in 1999/2001 (Natsal 2000). The second Natsal survey 37 found that there was an increase between 1990 and 2000 in a number of behaviours associated with increased risk of STI (and HIV) transmission. These behaviours included increases and in some cases substantial increases in: the numbers of heterosexual partners that respondents reported over the previous five-year period for men and women, the number of homosexual partnerships ever incidence of heterosexual anal sex for men, increased reporting of paying for sex. 6.9 Overall, there appeared to be a trend towards an increase in behaviour with a higher risk of sexually transmitted infection, with the numbers of partners increasing, the average age at which first sexual activity commences decreasing, and evidence that public awareness of STIs was poor The 2000 survey also reported increases in consistent use of condoms, particularly among men with multiple partners over the past year. However, the apparent increases in the numbers of sexual partners and some sexual practices may have served to discount at least some of the potential health advantages of increased condom use A third Natsal survey finished gathering survey evidence in 2012, but the first findings of Natsal 2010 are not expected to be reported until later in Lacey, Merrick, Bersley et al. Analysis of the Socio-Demography of Gonorrhoea in Leeds, , BMJ June ; 314; Data reported in the National Strategy for Sexual Health and HIV, Johnson et al. Sexual Behaviour in Britain: Partnerships, Practices and HIV Risk Behaviours, The Lancet, Volume 358, 1 December Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

59 Trends Since As a response to the trends in increased incidence of STIs (and HIV) and the recognition of the threat to longer-term public health that they caused, the first National Strategy for Sexual Health and HIV was launched in Its objectives included reducing: rates of transmission of HIV and STIs rates of undiagnosed HIV and STIs and rates of unintended pregnancies The period from 2002 onwards has been one of divergent trends in the rates of new STI diagnoses, with rates for some infections increasing markedly while others show declining rates The table below provides data on the number of new STI diagnoses (male and female combined) in England, for 2002 and for It also shows the percentage change reported in these diagnoses between 2002 and The table also shows the percentage change from 2010 to Table 6-1: Number of New STI Diagnoses in England STI % change % change Chlamydia 79, , % -2% Gonorrhoea 24,123 20,965-13% 25% Anogenital herpes 17,259 31,154 5% 5% Non-specific genital infection 60,753 61,931 2% 5% Pelvic inflammatory disease 14,914 22,199 49% 2% Syphilis: primary, secondary and early latent 1,560 2,915 87% 10% Anogenital warts 62,982 76,071 21% 1% Other new STI diagnoses 25,008 25,436 2% 1% Total new STI diagnoses 285, ,867 49% 2% Source: Health Protection Agency, The table includes data on Pelvic Inflammatory Disease (PID) which is a bacterial infection of the female upper genital tract, including the womb, fallopian tubes and ovaries. Many different types of bacteria can cause PID, but most cases are the result of a sexually transmitted infection (STI) such as chlamydia or gonorrhoea. The Health Protection Agency includes PID in its data tables of STIs in the UK, and that convention has been followed here. Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 59

60 6.15 As can be seen from the table above, the total number of new STI diagnoses in England increased by 49% between 2002 and This increase was dominated by the increase in the number of diagnoses of chlamydia, which rose by 135% to just over 186,000. The proportion of STI diagnoses accounted for by chlamydia increased from around 27.7% in 2002 to 43.6% by The table below provides data on rates of new STI diagnoses per 100,000 population (male and female combined) in England. The table provides data on incidence in 2002 and for 2011, and the percentage change that has been reported between 2002 and It also shows the percentage change from 2010 to Table 6-2: Rates of New STI Diagnoses, per 100,000 Population, in England STI % change % change Chlamydia % -2% Gonorrhoea % 25% Anogenital herpes % 5% Non-specific genital infection % 5% Pelvic inflammatory disease % 2% Syphilis: primary, secondary and early latent % 10% Anogenital warts % 1% Other new STI diagnoses % 1% Total new STI diagnoses % 2% Source: Health Protection Agency, Table 6-2 confirms that rates of infection have increased significantly for chlamydia over the past nine years. However, the largest increase occurred in 2008, when a new system of surveillance was introduced. 39 Rates of new chlamydia diagnosis have actually fallen slightly more recently, from per 100,000 in 2009 to in The authors of the Natsal 2000 survey report suggested that there was a causal link between higher rates of STI incidence reported in 2000 compared to 1990, and the changes in sexual behaviours that were identified between the two survey periods. 39 The diagnosis rate for chlamydia in England increased from in 2007 to in Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

61 6.19 The evidence that rates of diagnoses for most sexually transmitted infections have continued to increase from 2002 to 2011 also suggests that part of the increase may be due to increasing prevalence of behaviour that creates a risk of STI. However, it appears that some of the reported increases are likely to have arisen from improvements in surveillance methods, such as can be seen in the spike in chlamydia diagnoses that occurred in Until the results of the third Natsal survey are published it is not possible to attribute the proportion of the increase in infections to changes in behaviour since Comparisons with Other European Countries 6.20 The UK is not alone in experiencing increasing rates of sexually transmitted infections among its population. In 2011, the European Centre for Disease Prevention and Control released its first surveillance report on STIs across Europe, focusing on chlamydia, gonorrhoea and syphilis, and which showed that rates of infection for most diseases have increased between 1990 and The findings of the report are summarised in the sections that follow. Chlamydia 6.21 The report found that chlamydia was the most prevalent STI in Europe, with nearly 350,000 cases reported across 23 countries in However, because of the asymptomatic nature of chlamydia, especially in females, the number of reported cases in each country is strongly influenced by the testing programmes in place in that country. Despite this caveat, there does appear to be a clear pan-european trend towards increased rates of infection of chlamydia: between 2000 and 2009, rates of infection increased in all but four European countries, and overall the reported rate more than doubled from 143 per 100,000 population to 332 per 100,000 population in the reporting countries over this period In 2009, the highest rates for new infections were observed in four Scandinavian/Nordic countries (Iceland, Denmark, Norway and Sweden) with the UK having the fifth highest rate. Gonorrhoea 6.23 The ECDPC report identified that, with a rate of over 30 per 100,000 population, the UK has by far the largest rate of gonorrhoeal infections per 100,000 population among the reporting countries in Europe. Overall, the UK contributed about 60% of all reported cases in reporting countries The overall trend for gonorrhoea across Europe over the past decade has been for a slightly declining level of incidence, but the report also cautions that there may be large-scale problems of under-reporting in some European countries due to an absence of effective centralised reporting mechanisms in those countries. 40 European Centre for Disease Prevention and Control, Sexually Transmitted Infections in Europe, Surveillance Report , Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 61

62 6.25 The ECDPC report did highlight that the UK was one of the countries where there had been a significant decline in incidence rates between 2000 and 2009 (a fall of 22%), whereas for some comparable countries (such as Iceland and Denmark) infection rates had increased significantly over the same period. Syphilis 6.26 The overall rate of syphilis in Europe has nearly halved between 2000 and 2009, but this trend is largely accounted for by large falls in countries that previously had high rates of incidence. The ECDPC report identified that the UK is a mid-ranked country for syphilis infections in Europe, and one of the countries where rates of incidence have been increasing over the past decade. Baseline Financial Costs of STIs 6.27 One purpose of this section is to estimate the current and potential future costs of newly diagnosed STI cases in the UK. The assessment of future costs is for the period , in line with the estimated costs for unintended pregnancy in previous sections of this report The approach to estimating the baseline (2011) costs of STIs is as follows: first, an estimation was made of the 2011 rates of newly diagnosed cases of each of the main types of STIs for the UK second, based on estimated average per-diagnosis cost of each of the main types of STIs for 2011, the costs of new STI diagnoses were calculated Data has already been presented on the number of cases of STIs in England in In order to convert these to estimates for the UK as a whole, data on 2011 population estimates (from the ONS 2011 Mid-Year Population Estimates) was used. The resulting estimates for STI cases across the UK as a whole are presented in the table below, which indicates that in the order of 510,000 new STI diagnoses are likely to have been made in the UK in 2011, with over 43% of these accounted for by chlamydia. Table 6-3: Estimated Number of New STI Diagnoses in the UK, 2011 STI 2011 Chlamydia 221,939 Syphilis: primary, secondary and early latent 3,475 Gonorrhoea 24,990 Anogenital warts 90,674 Anogenital herpes 37,134 Other new STI diagnoses 130,599 Total new STI diagnoses 510,821 Source: Based on data from the Health Protection Agency, 2012, and ONS, Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

63 6.30 The next step was to estimate the average direct medical cost of treatment for the STIs and their sequelae for the UK. This was done in two steps: first, data on average treatment costs for STIs for 2003 was obtained from a previously published report 41 and second, these costs were converted to 2011 costs by use of an appropriate health inflation index It is acknowledged that this method can only provide an approximation of current costs, as it will not take into account the differential costs of new treatments that may have been introduced for specific STIs between 2003 and Based on this approach, the estimated 2011 costs of treatment are set out in the table below. Table 6-4: Estimated Direct Medical Cost Per New STI Diagnosis, UK, 2011 STI 2011 Chlamydia Syphilis Gonorrhoea Anogenital warts 1, Anogenital herpes Other new STI diagnoses 1, Source: Based on data from the North West Public Health Observatory, 2005, updated with reference to the Health Service Cost Index, The final step is to estimate the overall costs by multiplying the average cost per case by the estimated number of new diagnoses. The results, presented in the table below, suggest that the current (2011) cost of new STI diagnoses is in the order of 620 million. Of this amount, an estimated nearly 177 million is accounted for by the costs of treating chlamydia, with the same amount again spent on treating genital warts. Together, the costs of treating these two STIs are likely to account for around 56% of the overall cost of treating new STI diagnoses in the UK. 41 Counting the Cost: the Economics of Sexually Transmitted Infections, the North West Public Health Observatory, March The Health Service Cost Index, Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 63

64 Table 6-5: Estimated Direct Medical Costs of New STI Diagnoses in the UK, 2011, millions (2011) Source: Development Economics STI 2011 Chlamydia Syphilis 1.29 Gonorrhoea 4.56 Anogenital warts Anogenital herpes Other new STI diagnoses Total Potential Medical Costs Under Alternative Future Scenarios 6.33 Having estimated the scale of potential current medical costs associated with new diagnoses of STIs, the next step was to develop alternative future scenarios for the future rates of incidence of STIs in the UK. In all cases the estimates of future costs are presented in real (2011) prices, so that the future effects of inflation can be disregarded The hypothetical future scenarios are as follows: Scenario 1 current access: maintaining underlying trends of improvement in diagnosis experienced between 2002 and (Under this scenario, the average trends in annual rates of new STI diagnosis for the period are rolled forward over 2013 to 2020.) Scenario 2 improved access: enhanced rate at which new diagnoses are prevented through increased awareness and education. (Under this scenario, the average trends in annual rates of new STI diagnosis for the period are rolled forward over 2013 to 2020.) Scenario 3 worsened access: increased rate of diagnosis as a consequence of fragmentation of sexual health services and reduced effectiveness of education and awareness raising programmes. (Under this scenario, there is an assumed deterioration of (i.e. increase in) the average annual rate of incidence of each of the categories of STIs of around 2.3% compared to the previous year. This assumption is based on an assessment of the average rate of improvement in rates over the past 10 years after effects such as the 2008 spike in chlamydia diagnoses are accounted for. ) 6.35 Scenario 1 is an approximation of potential future costs under a current access scenario, whereby interventions that have led to improvements in the detection and treatment of STIs between 2002 and 2011 are rolled forward from 2013 onwards. 64 Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

65 6.36 Scenario 2 approximates potential future costs that might occur as a result of reduced future rates of STI incidence resulting from enhanced and more effective preventative education, awareness raising, advice and support programmes Scenario 3 is an approximation of potential future costs that might occur under a regime whereby future rates of sexually transmitted infections (and diagnoses) increase as a result of the fragmentation and loss of effectiveness of preventative education, awareness raising, advice and support programmes The annual rates of change in the incidence of individual STIs that are assumed under each of the three scenarios are set out in the table below. Table 6-6: Assumed Annual Change in Rates of New STI diagnoses, STI Scenario 1 Scenario 2 Scenario 3 Chlamydia 9.02% 1.28% 10.82% Syphilis 4.25% 0.35% 5.09% Gonorrhoea -1.19% -1.19% -0.95% Anogenital warts 1.88% -0.67% 2.26% Anogenital herpes 7.03% 4.53% 8.44% Other STIs -0.79% -1.58% -0.63% Source: Development Economics 6.39 The annual rates are then applied to the estimated levels of diagnoses of the individual STIs for the UK for 2011, rolled forward one year to 2012, and then estimated for each of the years The table below provides the estimated direct medical costs of each of the individual STIs under Scenario 1 between 2013 and Table 6-7: Scenario 1: Expected Future Medical Costs Associated with STIs, ( millions, 2011 prices) STI Chlamydia ,319.8 Syphilis Gonorrhoea Anogenital warts ,568.3 Anogenital herpes Other STIs ,791.5 Total ,040.0 Source: Development Economics Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 65

66 6.41 Under Scenario 1, the annual costs of treating newly diagnosed STIs are anticipated to increase from 660 million in 2013 to nearly 867 million by 2020 (all in 2011 prices). The cumulative cost between 2013 and 2020 is expected to amount to billion under this scenario. The largest share of the overall cost is expected to be contributed by the cost of chlamydia treatments (about 38% of the total) For Scenario 2, which is predicated on a decrease in future rates of infections, brought about by reduced rates of incidence following more successive educational and awareness raising programmes, the annual costs are assumed to reach 612 million by 2020 (2011 prices), and the cumulative costs are expected to amount to billion between 2013 and Under this scenario, the contribution of chlamydia treatment costs towards the total is significantly reduced, at just 31% of the total. Table 6-8: Scenario 2: Expected Future Medical Costs Associated with STIs, ( millions, 2011 prices) STI Chlamydia ,518.2 Syphilis Gonorrhoea Anogenital warts ,362.7 Anogenital herpes Other STIs ,715.2 Total ,914.0 Source: Development Economics 6.43 Under Scenario 3, which is predicated on an increase in future rates of infections, annual costs are assumed to reach 944 million by 2020 (2011 prices), and the cumulative costs are expected to amount to billion between 2013 and Under this scenario, the contribution of chlamydia treatment costs towards the total is slightly greater, at 40% of the total Annual direct medical costs by 2020 are expected to be 9.0% greater under Scenario 3 compared to Scenario 1. Overall cumulative costs under Scenario 3 would be 5.2% greater than the equivalent costs under Scenario Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

67 Table 6-9: Scenario 3: Expected Future Medical Costs Associated with STIs, ( millions, 2011 prices) STI Chlamydia ,559.4 Syphilis Gonorrhoea Anogenital warts ,601.0 Anogenital herpes Other STIs ,807.2 Total ,354.2 Source: Development Economics Summary and Conclusions 6.45 Compared to Scenario 1, and for the period , the outcomes associated with Scenario 3 are associated with additional direct medical costs (2011 prices) amounting to 314 million (undiscounted) On the other hand, compared to Scenario 1, and again between 2013 and 2020, the outcomes associated with Scenario 2 would be associated with reduced levels of additional direct medical costs. These costs, compared to those expected under Scenario 1, are 1,126 million lower (2011 prices, undiscounted) By 2020, the trajectory described by Scenario 2 could deliver, compared to the Scenario 1 (current access levels), direct cashable savings of around 254 million per annum in direct medical costs associated with the treatment of STIs The results of the scenarios developed in this section are summarised in the table below. Table 6-10: Summary of Cumulative Scenario STI Costs, , Scenarios 1 3 ( millions, 2011 prices) STI Scenario 1 Scenario 2 Scenario 3 Chlamydia 2, , ,559.4 Syphilis Gonorrhoea Anogenital warts 1, , ,601.0 Anogenital herpes Other STIs 1, , ,807.2 Total 6, , ,354.2 Source: Development Economics Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 67

68 Long-Term Health Conditions 6.49 The focus in this section has been on the medical costs associated with treatment of STIs, but there are, of course, other types of medical costs associated with long-term complications as a result of untreated and/or undiagnosed STIs. The longer-term medical costs associated with untreated STIs are primarily associated with many harmful, costly to treat and often irreversible medical conditions such as: reproductive health problems foetal and perinatal health problems facilitation of the sexual transmission of the HIV virus No attempt has been made to estimate these additional medical costs, but they are likely to be substantial There are also non-medical financial costs and other negative consequences of STIs that may not have a financial implication for the health system or the wider economy but are nevertheless still important to acknowledge. Examples of non-medical financial cost include the loss in productivity and earnings if patients need to take time off work to receive treatment. There are also costs to patients in terms of travel costs to treatment centres and the opportunity costs of time spent travelling to and receiving treatment No attempt has been made to estimate these additional non-medical costs, but given the large number of cases, the financial and wider economic costs may run into millions of pounds annually The non-financial costs of STIs are also likely to be significant, and can include the following: impact on the quality of life of patients, including individual happiness and selfesteem impact on the quality of personal relationships equity issues: women, ethnic minorities and younger people are disproportionately affected by short-term and longer-term impacts of STIs and their sequelae. 68 Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

69 Section 7 Key Findings and Implications Summary of Key Findings 7.1 This report, commissioned by the two leading sexual health charities, Brook and FPA, in collaboration with Reckitt Benckiser Healthcare (UK) Ltd, has focused on the potential medium-term financial and economic consequences of worsened access to contraceptive and sexual health services in the United Kingdom. 7.2 The study has been prompted by a concern that there are mounting financial and other pressures driving a trend towards reduced access to contraception and sexual health advice and services in the UK. A recent audit found that one-third of women of reproductive age in England were living in areas with reduced access to contraception services. 7.3 The report has assessed a range of alternative future scenarios for rates of unintended pregnancy. These indicate that between 3.47 and 3.60 million unintended pregnancies can be expected in the UK between 2013 and The annual cost implications for the NHS as a result of unintended pregnancy can be expected to range from 637 million to 699 million over the next eight years (to 2020). The cumulative costs to the NHS are expected to range from 5.1 billion to 5.6 billion between 2013 and Between 2013 and 2015 the direct costs of unintended pregnancy to the NHS are expected to be around 2.1 billion. This figure is equivalent to just over 10% of the 20 billion in efficiency savings the NHS needs to find by The medical costs associated with unintended conceptions would be dwarfed by the wider public sector costs, in particular welfare spending on children that are expected to be born as a result of unintended pregnancy. The cumulative additional spending implications of unintended pregnancy that lead to births is likely to range between 70.1 billion and billion between 2013 and Spending on social welfare programmes can be expected to account for between 58% and 72% of this total. 7.7 However, the timeframe for the analysis ( ) means that some very significant areas of longer-term public expenditure liability are either excluded (such as crime and justice) or are significantly under-estimated (in terms of the potential post-2020 implications). As an example of the latter, the full public sector liabilities for education spend up to the age 18 for children expected to be born from unintended pregnancies between 2013 and 2020 could range from 90.5 billion to 98.7 billion over the period to This report has also considered the potential impact of unintended motherhood on the medium-to-long-term earnings potential of the mother. These are estimated to range from 2.4 billion to 2.6 billion between 2013 and The knock-on impacts to the UK economy through multiplier effects are likely to be worth between 3.5 billion and 3.8 billion over the same period. Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 69

70 7.9 In addition, cumulative lost tax revenues and NI contributions are estimated to be between 775 million and 843 million by Additional Exchequer costs are likely from lost expenditure-related taxation (such as VAT) from lower earnings, but these have not been estimated The potential longer-term impacts on lost earnings can be particularly acute for women who never attain qualifications, because they are much more likely to endure a working lifetime of unskilled, lower paid and often part-time jobs. Women who were teenage mothers are much more likely to be living in poverty throughout their lives compared to women who give birth after their education is complete, and who have attained qualifications In addition to the costs of unintended pregnancy, the report has also examined the scale of current direct medical costs associated with treating newly diagnosed sexually transmitted infections. By 2020, it is estimated that the annual costs associated with new STI diagnoses could amount to up to 944 million and that the cumulative costs over the period to 2020 could amount to between 4.9 billion and 6.4 billion. The estimated additional costs from reduced access to services (compared to current levels of provision) amount to 294 million over this period Taking the medical costs of unintended pregnancies, the post-natal health care for the resulting children and the medical costs of treating STIs all together, the cumulative implications for NHS spending over the next eight years if access to contraception and sexual health services worsens could be a net additional spend of between 1.8 billion and 2.2 billion The scale of anticipated expenditure even under the most optimistic scenario underlines that unintended pregnancy and rates of sexually transmitted infections will require a very significant level of public spending: the three scenarios are associated with between 1.4% ( 12.2 billion) and 1.6% ( 16.2 billion) of anticipated overall public health spending over the next eight years Overall public expenditure (NHS and other government spending) associated with unintended pregnancy is expected to total between 80.7 billion and billion between 2013 and The additional costs that are likely to be incurred as a result of reduced access to services (compared to current levels of access) could amount to between 8.4 billion and 10.0 billion over the same period For example, in terms of social welfare spending alone, the implications are that, by 2020, between 10% and 15% of the UK s anticipated social welfare spending (i.e. between 11.7 billion and 17.5 billion per annum) could be accounted for by the costs of providing social welfare services to supporting children that result from unintended pregnancy. The net additional costs likely to be incurred as a result of reduced access to services could, therefore, amount to an increase of around 5% ( 5.8 billion) per annum on the UK s national spending on social welfare by Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

71 Other Implications 7.16 The evidence presented in this report confirms that any increase in the level of restrictions and any further fragmentation of the delivery of contraception and sexual health services would be a false economy. This is because any short-term savings that result from worsening access to contraception services are likely to be only a small fraction of the consequential increases in short-term, medium-term and longer-term publicly funded health spending liabilities that would follow from the advent of worsening access Furthermore, this potential large increase in healthcare spending is itself relatively small in comparison with the longer-term impact on overall public spending from unintended pregnancy, including spending on education, social services, housing and, especially, social welfare For these reasons there is a considerable danger that efforts to make savings in the short-term by reducing access to contraception services will result in a disastrous increase in public expenditure liabilities in the longer term Apart from the financial implications for health, welfare and other areas of public spending, which have already been quantified in detail in earlier sections of this report, there are a number of other considerations that need to be understood by decision-makers at a national and local level In particular, it is important to recognise that decisions taken now which may be influenced by relatively short-term considerations of annualised budgeting will have very long term and far-reaching implications for the economy as a whole, for communities and for individuals and families. These implications are presented under a number of different sub-headings below: Impact on Social Mobility 7.21 There is a very clear link between unintended pregnancy and the life chances of the mother, particularly for teenage and other young mothers. This is because unintended pregnancy that leads to childbirth can have highly adverse impacts on the educational achievements and qualifications attained and as a consequence the career earnings potential of teenage and other younger mothers. Households that originate with a teenage mother are much more likely to live in a deprived area, have lower incomes and are more likely to be dependent on benefits Longer term, mothers who have their children before they finish their education and/or achieve qualifications tend to continue to possess lower levels of qualifications and have reduced earnings potential. The danger, therefore, of worsened access to contraception services is the entrapment of greater numbers of young women into a lifetime of deprivation, poverty and dependency on welfare payments. Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 71

72 7.23 Furthermore, children from low income households tend to leave school earlier, and are around six times more likely to leave school without qualifications compared to children from higher income households. These differences also lead on to differential rates of participation in higher education, so children from low income households tend to have lower levels of qualifications (and earnings) as adults. Moreover, young people growing up in low-income households are also more likely to be unemployed, to be working in low paid or unskilled jobs, and to be poorly paid in adult life An additional danger, therefore, of worsening access to contraception services is that such short-term measures carry a very real danger of facilitating greater levels of potential inter-generational disadvantage and deprivation Moreover, the impact of unintended pregnancy on the labour market participation and earnings potential of older mothers especially those who already have children can also be significant, although less so than for teenage and young mothers. Impact on Communities 7.26 There is also a link between social deprivation and STIs, abortion rates and rates of teenage pregnancy. This is reflected in higher rates of STIs, abortions and teenage pregnancies in local authority areas that score more highly against indicators of multiple deprivation. Worsening access to contraception and sexual health services, therefore, could have a particularly negative impact on more deprived areas. Impact on Equalities Groups 7.27 Previous research has confirmed that sexual ill health and unintended pregnancy is not uniformly distributed across the population. Women, gay men, teenagers, young adults and some minority ethnic groups are disproportionately affected. For example, rates of gonorrhoea in some inner city minority ethnic groups are around ten times that found in the general population. 43 Worsening access to contraception and sexual health services, therefore, threatens to have a disproportionate effect on equalities groups. Impact on the National Economy 7.28 The impact of greater levels of unintended pregnancies and STIs that would result from reduced access to contraception services can also have significant wider economic impacts. These effects stem from a number of effects, including the following: The impacts on the labour market participation and earnings potential of mothers or other family members will in aggregate reduce the overall level of earnings and associated consumption demand across the economy as a whole. The firstround impacts on demand will also be exacerbated by the workings of the income multiplier effect throughout the economy: the reduction in aggregate demand will, in other words, create ripple effects that will affect most, if not all, areas of the national economy. At a more localised level, the impacts will most likely be greater in areas that suffer greater levels of deprivation. 43 The National Strategy for Sexual Health and HIV, p9, Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services

73 The impact of lost earnings and reduced levels of consumption expenditure and associated wider economic activity will result in a significant loss of tax revenues to government. Thus there is a double impact on public finances: the increase in demand for spending in areas such as health, social welfare, housing and education, etc. already covered, and the lost opportunities for tax revenue generation on the other. The impact on workforce education and skills especially among younger mothers and their children can reduce overall levels of workforce attainment and skills, especially in areas that are more deprived. In general, a workforce that possesses lower levels of educational attainment, qualifications and skills will tend to be associated with lower levels of productivity, innovation, enterprise, employment and long-term earnings growth. Unprotected Nation The Financial and Economic Impacts of Restricted Contraceptive and Sexual Health Services 73

74 Featherstone Street, London EC1Y 8RT Tel: Featherstone Street, London EC1Y 8QU Tel: Brook charity number (England and Wales), SC (Scotland). FPA charity number Funded by and developed in partnership with Reckitt Benckiser Healthcare (UK) Ltd. Brook and FPA 2013