Responding to a new report from the IFS, funded by the Joseph Rowntree Foundation and the Health Foundation, the interim chief executive of NHS Providers, Saffron Cordery said:

"This latest report underlines the huge scale of the challenge facing mental health trust leaders and their frontline teams every day.

"Mental health services are facing major increases in demand with referrals 39% higher than before the Covid-19 pandemic and the number of people in contact with mental health services reaching a record high of 2m in December 2024.

"Yet a recent survey by NHS Providers found four in five trust leaders do not believe they have been given enough funding to address care backlogs across mental health services. Nine in 10 mental health trust leaders in our most recent annual survey also told us they were worried about their capacity to meet demand over the next 12 months.

"The knock-on effects of this are worrying and far-reaching with poor mental health the leading driver of ill-health related economic inactivity.

"Investing in high quality, accessible mental health services is a win-win situation: it can reduce healthcare costs, improve productivity and lead to better health outcomes for patients.

"With the 10-year health plan and comprehensive spending review coming up, this is a critical opportunity to prioritise mental health and recognise the clear economic and wider benefits that can be derived from investing in this vital sector."