Are Mental Health Conditions being Overdiagnosed?

As the government prepares to announce major benefit cuts this week, Health Secretary Wes Streeting has suggested that people are being “overdiagnosed” with mental health conditions.

Mr Streeting said he agreed with experts who warn that mental health issues may be overdiagnosed.

However, he also acknowledged that mental health services are at a “breaking point.”

He said: “Here’s the other thing, mental wellbeing, illness, it’s a spectrum and I think definitely there’s an overdiagnosis but there’s too many people being written off.”

Labour has pledged to add 8,500 more mental health staff to reduce backlogs, with 1.6 million people currently awaiting mental health referrals.

Examining the Data

Medical experts argue that underdiagnosis, overdiagnosis, and misdiagnosis are all concerns within the mental health community.

However, the available data on mental health diagnoses is limited and of “poor quality”, according to the NHS.

Primary NHS data from 2016/17 to 2023/24 does not indicate a clear increase in mental health diagnoses.

Diagnoses for conditions with “depression” in their name, such as moderate depression, bipolar disorder, and schizophrenia, have slightly decreased since 2016.

However, inconsistencies in the dataset and non-standardised terminology present challenges in drawing definitive conclusions.

A spike in depression and anxiety diagnoses occurred in 2019/20, coinciding with the Covid-19 pandemic.

Since then, annual anxiety-related diagnoses have remained stable at approximately 15,000 cases per year.

There has also been a post-pandemic increase in combined anxiety-depressive disorder diagnoses, though some of these may be double-counted with separate anxiety or depression figures.

Meanwhile, the number of people in contact with NHS mental health services has nearly doubled over the past decade, rising from 1.2 million in September 2016 to 2 million in January 2025.

Much of this increase has been observed since the pandemic.

At the same time, NHS spending on mental health has risen from £11.6 billion in 2016/17 to £18.2 billion in 2024/25, a 63% increase in eight years.

Mental health now accounts for around 10.5% of the NHS budget.

This increased investment correlates with the growing number of people accessing services, suggesting improved reach rather than a definitive overdiagnosis issue.

The Rise in Mental Health-Related Benefit Claims

While the debate over mental health diagnoses continues, data from the Department for Work and Pensions (DWP) indicates a significant rise in sick benefit claims related to mental health disorders.

As of August 2024, nearly 5 million people in England and Scotland were entitled to sick benefits, marking a 23% increase from pre-Covid levels.

This includes approximately 1.4 million people diagnosed with psychiatric disorders who are receiving Personal Independence Payment (PIP).

Health and disability benefit spending is projected to rise from £64.7 billion in 2023/24 to £100.7 billion by 2029/30.

Government Plans for Welfare Reform

Mr Streeting and the Labour government are expected to announce major reforms to the welfare system, potentially including billions in benefit cuts.

The planned changes are likely to make it harder to qualify for PIP, potentially by adjusting the criteria used to assess eligibility.

Reports suggest that ministers are also considering a ‘right to try’ policy, which would allow disabled benefit claimants to retain their benefits while testing short-term employment opportunities.

A DWP spokesperson said: “We have been clear that the current welfare system is broken and needs reform, so it is fairer on the taxpayer and helps long-term sick and disabled people who can work to find employment, whilst ensuring it provides support for those who need it most.”

The question of whether mental health conditions are overdiagnosed remains contested.

While Mr Streeting and some experts believe overdiagnosis is an issue, the data does not provide a definitive answer.

Instead, it shows a complex landscape where mental health service usage and spending have risen significantly, particularly after the pandemic.

Simultaneously, mental health-related benefit claims have surged, placing further strain on the welfare system.

With welfare reform on the horizon, the debate over mental health diagnoses is likely to intensify, affecting both policy decisions and the lives of those reliant on support.