Fedcap’s Community Impact Policy Institute Releases New Report Highlighting Scalable Solution to Mental Health-Driven Economic Inactivity in the UK

The Community Impact Policy Institute (CIPI), the research arm of Fedcap, today released a new report, “Expanding the Fedcap UK Clubhouse Sustainable Employment Model: Recommendations to Advance Mental Health to Further Sustainable Employment and Economic Mobility.”

The report finds that integrating mental health support with employment services -through Fedcap’s UK Clubhouse model – can significantly improve workforce participation and long-term economic outcomes for individuals facing complex mental health challenges.

The findings come at a critical juncture. In the UK, 2.8 million working-age individuals are economically inactive due to health conditions, with mental health issues playing a central role. The economic cost is staggering – estimated at up to £300 billion annually when accounting for lost productivity, healthcare, and social impacts.

Fedcap’s UK Clubhouse model offers a community-based, non-clinical approach that combines mental health support, social connection, and employment readiness. Unlike traditional programmes, the model focuses on sustained engagement and real-world work pathways.

Analysis found that approximately one-third of participants transitioned into sustainable employment – a significant outcome for a population with historically low job placement rates. In addition, 82% of members reported improved mental wellbeing and 65% sustained engagement rates, compared to 45% in traditional programmes.

The report further highlights the model’s strong return on investment. Clubhouse services operate at a fraction of the cost of clinical interventions and have demonstrated the potential to generate significant public value by reducing reliance on benefits, healthcare services, and repeated programme participation.

The report outlines a clear roadmap for scaling impact, including expanding access to Clubhouses in high-need regions, further integrating the model into national employment and health programmes, strengthening referral pathways from healthcare and community systems, supporting multi-year funding to enable sustained engagement, and enhancing data tracking to capture long-term public value. The pilot was funded by the UK Government’s Department for Work and Pensions’ Restart Scheme.

“This report makes clear that we cannot address economic inactivity without addressing mental health,” said Christine McMahon, President and CEO of Fedcap. “The Clubhouse model demonstrates that when individuals are supported in a community, with integrated health and employment services, the results are transformative – not just for the individual, but for the economy as a whole. We applaud the Department for Work and Pensions for funding this innovative pilot. This is a scalable, evidence-based solution that policymakers should embrace.”

Susan Paterson, Executive Director of Fedcap Employment, added: “Fedcap has long recognised the need to devise solutions that integrate work and health to address growing numbers of people who believe their mental health conditions prevent them from working. We’re grateful to the Department for Work and Pensions for funding Clubhouse to allow us to pilot and continue this innovative model of mental health and employability support.”

A full copy of the report can be found here.