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Chapter 4


This chapter investigates the impacts of the financial crisis and subsequent recession on the population and its health, comments on governmental and organisational responses and discusses different short and longer-term responses to the crisis.

In attempting to understand the local effects of the current financial crisis, we need to reflect on its rapid development and global consequences - international stock market crashes, emergency financial support for many banks, cuts in UK interest rates to historically low levels, large-scale redundancies and sharp rises in unemployment - culminating in the UK economy officially going into recession in January 2009.


Before discussing the local health and social impacts of the crisis, it is worth describing Glasgow’s demographic and economic context and how this has evolved over the last 40 years.  Glasgow’s situation is important given it is the centre of the conurbation, accounts for over half the region’s population and its economy drives that of the region.

Glasgow’s population has fallen steadily since the early 1950s but has recently stabilised at approximately 580,000. Despite this overall population loss, there have been recent increases in some age groups. In particular, the young working-age population (25-44) has increased by 15% since 1981 to account for almost a third of the population.(53) Compared to surrounding areas, Glasgow has a relatively large working-age population but its elderly population is forecast to increase at a much lower rate than other areas. Glasgow is the most ethnically diverse area of Scotland with at least five percent of its citizens being part of a minority ethnic
group. Approximately 5,500 asylum seekers live in the city.

In contrast, surrounding authorities tend to have less ethnic diversity, older, more rapidly ageing populations and higher dependency ratios.c For example, the elderly populations (aged 65 and over) of East Dunbartonshire and East Renfrewshire have increased by 60% and 48% respectively since 1981. A number of areas, like Glasgow, have undergone steep population c The ratio in the population of children and elderly to working age people decline, most notably Inverclyde and West Dunbartonshire, which have lost 20% and 14% respectively of their population since 1981.(54)

[c The ratio in the population of children and elderly to working age people]

In terms of economic change, the region lost much of its industry and manufacturing base from the 1960s onwards. Since the high point of industrial employment in 1961, the West of Scotland has lost 65% of its industrial employment, 360,000 actual jobs, reflecting one of the most severe periods of de-industrialisation experienced by any region in Europe.(55) The repercussions of this have been felt over the last 25 years, reflected in high levels of unemployment and worklessness related to ill-health and high concentrations of severe deprivation, particularly in Glasgow, but with notable pockets in surrounding areas. In more recent years, however,
up to 2007, employment levels had risen, e.g. the number of jobs in Glasgow increased by 18% between 1998 and 2005, with service industry employment replacing industrial and manufacturing as the base of the region’s economy. In 2005, a quarter of jobs in NHSGGC were in distribution, hotels and restaurants, 14% in banking and finance and a further quarter in public administration, education and health.(38) Alongside this, notable social changes have occurred.

For example, Glasgow’s middle class population has doubled and a sizeable migrant population has come to the region, many economic migrants from Eastern Europe. Despite increases in the employment rate, the problems of worklessness and low income persist, particularly in Glasgow, where one in five working age adults was not in work in 2006 and one in four of the population was dependent on income-related benefits.(15)

Current economic impacts
Given this context, what have been the most immediate impacts of the economic crisis? In considering this, we need to bear in mind that the full extent and impact of the crisis is probably still to be felt due to the lag effects and many impacts are likely to persist even after the economy moves out of recession. The most immediate impacts have been on unemployment and the availability of jobs(56):

  • The claimant count (unemployment) trend for the eight local authorities within or partly within Greater Glasgow and Clyded which had been consistently downward since 1993, has since December 2007 risen across all these areas, with the number of overall claimants doubling to 59,000 (in August 2009)
  • Male claimants outnumbered female claimants by 3:1 with the highest rate of male claimants in Glasgow City and West Dunbartonshire (see Figure 1)
  • The steepest rise in unemployment has been among younger adults (18-24 years) but adults aged 25-49 make up over half of all claimants
  • Across the region the biggest proportional rise in claimants has been among managers and those in professional occupations, but the largest rises in actual claimants has been among those working in skilled tradese and elementary professionsf (see Figure 2)
  • The number of claimants of Incapacity Benefit and Severe Disability Allowance has been dropping steadily across the region since 1999 and has continued to drop through the initial period of the financial crisis up to February 2009
  • In August 2009, monthly job vacancies were down approximately 30% across Greater Glasgow and Clyde and Lanarkshire compared to August 2007

One of the consequences of the rise in unemployment and reduction in vacancies for those already unemployed or workless, many long-term, prior to the economic downturn, will be the difficulty to get back into employment, particularly when in competition with those who have only recently been made unemployed and are more ‘work ready’.

[d Glasgow, Inverclyde, East Renfrewshire, Renfrewshire, East Dunbartonshire, West Dunbartonshire, North Lanarkshire and South Lanarkshire]
[e Skills trades include electricians, mechanics, engineers, plumbers, joiners etc]
[f Elementary occupations include labourers, postal workers, porters, waiters, bar staff, cleaners, security guards, shelf fillers, etc]

Figure 1
Male claimant count as % of resident working age population, Feb 2007- Aug 2009
Councils within or part of NHS Greater Glasgow and Clyde Source: NOMIS
Click to view larger version

Figure 2
Change in claimants by usual occupation from beginning of ‘Credit Crunch’
(Aug 2009 vs Aug 2007) Greater Glasgow and Clyde & Lanarkshire Source: NOMIS
Click to view larger version

Financial hardship associated with deprivation, unemployment and low income was already a significant problem in the region but the economic crisis has increased difficulties. Government reports show that personal insolvencies have risen in Scotland, up 33% in the first quarter of 2009/10 compared to a year ago.(57) Mortgage arrears and housing repossessions rose sharply at a UK level between Q1 2009 and Q1 2008.(58) The results from NHSGGC’s most recent Health and Wellbeing Survey conducted between August and December 2008, show that more people have a negative perception of the adequacy of their monthly income (14% in 2008 vs.10% in 2005) and more would have a problem meeting an unexpected expense of £20 (18% vs. 9% previously), of £100 (49% vs. 34%) and of £1000 (80% vs. 70%).(17)

Citizens Advice Scotland reports that the Credit Crunch has had a wide range of effects, including: employment problems (e.g. reduced hours, redundancy, non-payment of wages); difficulties for homeowners, (e.g. falling behind in mortgage payments, eviction of private renters after property repossession) and increasing debt and unsympathetic creditors. While a recent survey of Scottish Citizens Advice Bureau clients showed that clients’ total debt had increased by 50% over the five years from 2003 to 2008, the findings concluded that concerns about debt had been heightened by the financial crisis.(59) The report also highlighted the link between illhealth and financial hardship. Over a third of clients surveyed had an illness, disability or health problem and within client households three in every five households had at least one person with health issues.
Due to financial difficulties, other issues such as fuel poverty and homelessness are likely to become more prevalent in a recession and to impact adversely on health. To date, there has been little change in applications to be considered homeless in Scotland.

While manufacturing, building, finance, the property market and the majority of the retail sector have suffered most immediately in the credit crunch, some businesses appear to have prospered as a result of the crisis. A number of fast food outlets have achieved increased sales and profits since the start of the financial crisis and several have announced significant expansion plans.(60-64) The major supermarkets have continued to post increased profits, while bargain retail outlets and charity shops have produced large percentage profits.(65-69)

Evidence of potential health and socio-economic effects
Increased unemployment is one of the most immediate and noticeable impacts of a recession and the current financial crisis is no exception. What are the health effects of unemployment?  Research on periods of mass unemployment, such as in the 1930s depression and in later recessions, has pointed to a range of effects. Unemployment increases the chances of being ill, especially among those who have never worked or have had poorly paid jobs; leads to higher rates of depression, especially in the young, and has been shown in international comparisons to be strongly associated with negative health effects in women.

A recent review of the relationship between work, worklessness and health found that unemployment is associated with increased overall mortality, mortality from cardiovascular disease, lung cancer and suicide, morbidity (poorer general health), worse psychological wellbeing and mental health, higher medical consultation, raised medical consumption and hospital admission rates.(70) There were different effects depending on age. For example:

  • The mortality rate of unemployed young people is significantly higher, compared with employed young people, mainly due to accidents and suicide
  • All of the health effects of work and of unemployment are generally more marked in middle working-aged men, especially those with dependent families
  • There is mixed evidence that older workers have any decline in perceived/reported health

One study showed that in middle-aged men who had been made redundant in the late 1970s, mortality doubled in the five years after redundancy. At a neighbourhood level, higher rates of unemployment correlate with poorer neighbourhood health and at country level, increases in unemployment have been associated with increases in mortality.  Evidence suggests that the mental health effects of job loss can be greater for women than for men. There are associations between abuse of partners and unemployment in men and there is also an association between father’s unemployment and child abuse. The impact of long-term unemployment of parents on adolescent and young adult mental health has also been noted in a number of European countries.

While there is evidence that unemployment is bad both for individuals and for populations, the wider effects of recession on population health are less clear. A recent international study of employment and mortality in European countries over the last 40 years showed that, while increases in unemployment were associated with short-term increases in suicide and homicide, road traffic fatalities fell as unemployment rose.(5) Some international studies, however, have reported reductions in mortality rates associated with recession and increases in mortality associated with economic up-turns.

While unemployment clearly has many negative impacts on health, in contrast, those in secure employment tend to recover from illness quicker and the direct effect of reducing unemployment has been estimated to significantly reduce premature deaths.(71,72) Re-employment has been shown to improve general health and well-being and psychological distress, although “unsatisfactory” employment can have a negative health impact.(73)

Other health impacts of the financial crisis are more difficult to predict. Will people eat, drink and smoke more to cope or will the financial constraints of the crisis prompt lower consumption and thus provide health benefits? Affordability of alcohol increases consumption, so with lower income less may be consumed and there is some evidence that alcohol sales are reduced in recessions. People may give up or smoke less when money is tighter but increased stress could make people smoke more. We know that in poorer communities, levels of binge drinking and related alcohol harm, smoking and drug use are higher. In a recession, with more people suffering financial difficulties and potentially falling into poverty, these behaviours may become more prevalent.

Solid evidence for changes in diet in response to the crisis is scarce, but we do know that fast food outlets have flourished in the initial stages of this financial crisis suggesting that more people may be turning to convenience foods. A Which? survey of over 2000 adults in the UK found that the majority agreed that the price of food was a more important factor since the start of the financial downturn.(74) Three in five respondents agreed that they would buy more fruit and vegetables if they were cheaper, but a quarter said that the crisis had made healthy eating less of a priority.

More people may choose to walk or cycle in times of financial difficulty and the impact of fewer cars on the road could reduce accident casualties and pollution. Road use, however, has grown steadily over many years and any impacts are likely to be small and of short duration.


Every financial crisis is different and the rapid spread, depth and global impact of the present crisis restricts our ability to infer lessons from the past, particularly in relation to the health impact of the crisis. Also, while a steep rise in unemployment has been an immediate impact of the current crisis, other effects may take longer to emerge.

A recent survey of people’s experiences of the credit crunch and its effect on their mental health showed important differences between people who had been affected by the credit crunch, e.g. by increased debt, income reduced, job lost or at risk, etc., compared to those who had not been.(75) They were:

  • Four times as likely to have sought help for anxiety and eight times as likely to have sought help for depression for the first time in 2008
  • Much more likely to have experienced a range of negative states in 2008 than in previous years, i.e. felt more anxious, more worried, more stressed or more scared

The results from the Board’s 2008 Health and Wellbeing Survey compared to the 2005 results, show a slight increase in the proportion of the population reporting poor mental health, 14% with a GHQ-12 score of four or more.(17)

National figures on patient contacts with NHS services associated with mental health conditions provide a mixed picture:

  • New diagnoses of depression in GP practices went down slightly in 2007/08. Consultations relating to ‘anxiety and other neurotic, stress-related and somatoform disorders’, however, rose among young male adults (aged 15-34) compared to the previous year and there were rises in young adult males (25-34) and older males (55-64) consulting due to ‘mental and behavioural disorders due to use of alcohol’
  • A general downward trend in the number of first admissions to psychiatric specialties in Scotland was reversed in 2007/08, when there was a slight rise for both males and females compared to the previous year. In NHSGGC there was an eight percent increase over the same period, with the largest rises in East and South East Glasgow
  • New outpatient referrals to psychiatric specialties reduced overall in 2007-08(76);
  • Although nationally there was a ten percent fall in suicide rates between 2000-02 and 2006-08, numbers of male suicides rose in 2007 and remained higher in 2008, both nationally and in NHSGGC(54,76)

It should be noted that the aforementioned trends and changes represent relatively small changes in trajectories, may be short-lived and may be quite unrelated to the impact of the financial crisis.


It is worth bearing in mind that analysis of previous recessions shows a lag in improvements in unemployment once the economy has returned to positive growth. An ONS report notes that after the 1990s recession, it took over six years for the rates and levels of unemployment to fall back to pre-recession levels.(77)

At present, the size of the public and service sector may have insulated many of the local authorities in Greater Glasgow and Clyde from the worst aspects of the current economic downturn. This may not continue when cuts in UK public spending are made in order to reduce the gap between tax revenues and public spending.

In Glasgow, the Council’s economic departments have taken a “proactive approach” to managing and ameliorating the worst consequences of the economic downturn and the Council has announced a 10-point framework for economic regeneration.(78) The city has a well established infrastructure of support for those most vulnerable to the recession. Glasgow Works, the local regeneration agencies, social economy organisations and the work started by Equal Access have shown a level of joint working that should ensure any potential effect of the recession will not be worse for most marginalized communities, as was the case in the
past. Glasgow, as a result, may be better placed to benefit from UK-wide initiatives, such as the Future Jobs Fund. Glasgow’s position may also be protected by infrastructural improvement projects that are in development, including the M74 extension, the Clyde Gateway development, the International Financial Services District and related Commonwealth Games investment.(53)

In addition, the Council has provided support for low paid staff through their commitment to pay the Scottish Living Wage of £7 an hour to all their staff, resulting in a pay increase for almost 700 staff. Several other city authorities (Oxford, Preston, and Greater London) have similar packages. In London there is evidence that the living wage has contributed labour-cost savings through reduced absenteeism and turnover and workers have become more efficient and productive as they feel more valued.(79)

Health Service impacts and responses
CH(C)P report, Box 1, a wide range of impacts on their services and residents associated with the financial crisis:

Box 1 – Comments provided by CH(C)Ps on some of the impacts of the financial crisis
(source: informal survey by Bruce Whyte, July 2009)
Less resources impacting on community health projects and a wide range of voluntary organisations delivering services… (in at least one area) the slowdown in land sales is inhibiting plans developed by the Council, CH(C)P and partners to invest in area regeneration….. increased demand for financial inclusion services… general increase in indebtedness… Keep Well referrals to Money Matters have increased…. perceived increase in the number of people coming to drop-in mental health services who have lost their jobs or are about to….. anecdotal evidence from housing associations that people in new categories have been falling into rent
arrears e.g. construction workers… employability services face greater challenges given the loss of jobs, particularly in motivating addiction clients or others who may be in poverty groups….. staff requesting extra hours due to partners becoming unemployed… a general decrease in the uptake of eye examinations (possibly due to lack of awareness of free NHS eye care), a decrease in private purchases and an increase in reglazes/ downgrading…. more patients / clients are claiming expenses for attending appointments or are requesting domiciliary podiatry visits… people giving up on gym memberships as a means of saving income…. some
evidence of NHS dental practices being busier as people who have been laid off get their NHS treatment whilst on benefits….. social care demands have increased with rises in contacts related to welfare rights, social work advice and housing support and advice.

Many existing services are already well set-up to respond to the sorts of issues that are emerging in this recession. The Bridging Services set up in each CH(C)P area in Glasgow are a good example. These services were developed to meet an increasing demand for employability services for people referred from health and social care services, who are likely to have been longer term unemployed and present with health or social care support needs. Additionally, Bridging Services aim to provide ease of access to employability services for health and social care staff making referrals. Significant resources have been invested in developing these
services to the current stage and they are a valuable asset in the city.

More generally, CH(C)Ps are responding to the impact of the economic crisis in various ways.  Actions taken include:

  • Distributing self help debt packs to health centres
  • Promoting voluntary effort towards mutual support in the community
  • Supporting groups to prioritise activities in order to sustain key elements of the groups
  • Seeking to identify alternative opportunities for funding organisations and services
  • Working with partner agencies to promote employment opportunities through training and job seeking and working in particular with more vulnerable groups such as addiction or mental health clients
  • Increasing public/patients access to volunteering, training and employment opportunities
  • Raising awareness of depression, anxiety, stress and income maximisation through health promotion talks and ongoing information sharing with clients and carers.(80)

It is clear that many voluntary sector organisations are suffering due to funding cuts and reduced revenue. Volunteering, however, can be very beneficial, especially if you have become unemployed or are socially excluded in other ways.(81)


The implications of this period of financial crisis for health are debatable, partly because the length and depth of the recession is still uncertain and because of its differing timing and impact on different sectors of the economy. However, we know that there have been short-term impacts, such as the rise in unemployment, reduced employment opportunities, rises in personal debt, increased mental distress related to the crisis, and that longer-term impacts are likely.


The priorities for action proposed below are intended to strengthen our understanding of the crisis and to provide a coordinated local response to its social, economic and health impact:

  • In order to understand the impact of the recession we need to monitor not only economic indicators, but also changes in health service use and potential adverse health outcomes over the period of the crisis and beyond. We should therefore be monitoring use of primary care, mental health and hospital services trends in suicide, prevalence of mental distress, health behaviours and overall mortality, and potential secondary effects such as levels of violence and child abuse. Specific work which will contribute to this better understanding includes:
    • A poverty report for Glasgow and the West of Scotland is being undertaken by the Glasgow Centre for Population Health (GCPH) and the Poverty Alliance
    • The on-going work of the Scottish Observatory for Work and Health describes trends in Incapacity Benefit claimants
    • A new project to describe patterns and trends in mental health is being led by GCPH and the Mental Health Partnership in Greater Glasgow and Clyde
  • Active labour market initiatives, such as the work supported by Glasgow Works in upskilling, training and providing volunteering opportunities for those furthest from the labour market, have an important role in mitigating the worst impacts of the recession. Glasgow Works is also administering resources from the Government’s Future Jobs Fund aimed at supporting young unemployed into employment. Such initiatives that target the young unemployed should be given priority given the well-known long-term health and social problems that affect young people who do not get into work, further education or training after leaving school
  • The living wage campaign, which is based on the basic premise that ‘anyone who works for a living should not have to raise a family in poverty’, has a role to play. Other employers, including the NHS, universities and the private sector, should be encouraged to adopt the Scottish Living Wage and to provide support for both their direct and indirect employees to help mitigate the effects of the economic downturn, particularly for low-paid workers
  • Community planning has a role in minimising the impact of the financial crisis and public sector organisations have a role to play as good employers, especially at a time of financial constraints for them. Community planning partners need to be inequalities aware in their planning processes, by avoiding potentially widening inequalities and by ensuring they are tackling the causes as well as consequences of inequality
  • There is need to support and protect voluntary sector work that is targeted at those individuals and families most vulnerable to the effects of the recession and to support schemes that encourage volunteering and that effectively remove barriers for any population groups to gain the benefits of volunteering
  • During the period of growing financial constraint it will be important to consider the local economy. NHSGGC has accepted and implemented the Scottish Government’s Procurement Policy which promotes opportunities for Small and Medium Enterprises (SMEs) to compete for public contracts. CH(C)Ps and other NHS organisations should ensure that when procuring goods and services, they apply the policy in ways that support and benefit local economies
  • In a period of increasing financial constraint, services will have to be prioritised but those that promote resilience should be protected. Enhanced support should be directed to services that address the social and health problems that arise as a result of unemployment, job insecurity and low income. These services would include those that:
    • Provide information and advice for families and individuals on how to cope with the mental health effects of unemployment and related economic problems
    • Increase awareness of the potential social impacts on families, such as child and domestic abuse
    • Promote debt advice and advise on managing on low income and money saving activities e.g. how to eat healthily on a low income, advice on energy saving measures, cheap public transport options, free or low-cost leisure activities for adults, children and families