Local government spending and mental health: Untangling the impacts using a dynamic modelling approach

This study investigated the impact of local government spending on mental health in England between 2013 and 2019. Guided by the "Health in All Policies" vision, which encourages the integration of health in all decision-making areas, we explored how healthcare and multiple nonmedical budgeting decisions related to population mental health. We used random curve general cross-lagged modelling to dynamically partition effects into the short-run (from t to t + 1) and long-run (from t to t + 2) impacts, account for unobserved area-level heterogeneity and reverse causality from health outcomes to financial investments, and comprehensive modelling of budget items as an interconnected system. Our findings revealed that spending in adult social care, healthcare, and law & order predicted long-term mental health gains (0.004-0.081 SDs increase for each additional 10% in expenditure). However, these sectors exhibited negative short-term impulses (0.012-0.077 SDs decrease for each additional 10% in expenditure), markedly offsetting the long-term gains. In turn, infrastructural and environmental spending related to short-run mental health gains (0.005-0.031 SDs increase for each additional 10% in expenditure), while the long-run effects were predominantly negative (0.005-0.028 SDs decrease for each additional 10% in expenditure). The frequent occurrence of short-run and long-run negative links suggested that government resources may not be effectively reaching the areas that are most in need. In the short-term, negative effects could also imply temporary disruptions to service delivery largely uncompensated by later mental health improvements. Nonetheless, some non-health spending policies, such as law & order and infrastructure, can be related to long-lasting positive mental health impacts.