Effects of the Liverpool Citizens Support Scheme on mental health-related service utilisation: evidence from a natural experiment using instrumental variable analysis

BACKGROUND: There is limited evidence on how local welfare schemes may affect mental health. This study estimated the impact of the Liverpool Citizens Support Scheme on mental health-related service utilisation in one of the most socioeconomically disadvantaged areas of the UK. Introduced in 2013, the Liverpool Citizens Support Scheme aims to alleviate acute financial hardship by providing small grants to households in financial crisis. The scheme was open to all residents meeting financial eligibility criteria, but a policy change implemented in April 2023 restricted access for individuals living in social housing. This policy change constitutes a natural experiment that provides an opportunity to assess the mental health impact of local welfare provision. DATA AND METHODS: We used quarterly administrative data from the Liverpool Citizens Support Scheme from 2018 to 2023, linked at the small-area-level to healthcare data. The primary outcome was a quarterly mental health index constructed using four indicators of mental health service use: antidepressant prescriptions, mental health-related general practitioner (GP) consultations, accident and emergency (A&E) visits, and emergency hospital admissions. To address potential endogeneity in scheme uptake, we used an instrumental variable defined as the interaction between a post-policy indicator and the proportion of social housing tenants living in each neighbourhood, and estimated the association between grant provision and mental health-related service utilisation using two-stage least squares regression. RESULTS: Each additional £1 in grants issued per person per quarter was associated with a -0.07 reduction in the mental health index (95% CI: -0.11 to -0.02; p < 0.01), and with reductions of 309 antidepressant prescriptions per 1,000 of the population (95% CI: -536 to -83), 2.52 GP consultations per 1,000 (95% CI: -4.88 to -0.15), and 0.61 A&E visits per 1,000 (95% CI: -1.11 to -0.11). Under the assumptions of the instrumental variable design, these associations would correspond to an estimated saving of £0.45 to the health service for every £1 in grants issued (95% CI: £0.07 to £0.82), and £7,394,755 in total between 2018 and 2023 (95% CI: £1,150,295 to £13,474,887). Subgroup analysis suggested that differences in service utilisation were more pronounced for affected males, while there was no evidence of differential impact across age groups or income levels. CONCLUSIONS: These findings are consistent with the interpretation that welfare support delivered through the Liverpool Citizens Support Scheme may be associated with reduced demand for mental health-related healthcare services. The study points to the potential value of local welfare interventions in supporting population health and addressing health inequalities in deprived communities, and suggests how such schemes may contribute to considerable cost savings to health services whilst also alleviating financial hardship.