Chancellor John Healey announced that the Treasury will create a new category of preventative spending to stop social problems from escalating. This move aims to fix issues like homelessness and chronic ill health before they become expensive crises. Many hope this change will finally make public spending more effective overall.
We fix the bridge before it falls down: why shouldn't the same logic apply to social problems? Amid an unprepossessing jumble of crumbling clinical buildings in west London, I recently found a haven where local people cram in to sessions of exercise, computing and the arts. The Second Half Centre set out to tackle loneliness but is also improving health: many of its members suffer from multiple conditions, and a third say they've made fewer doctor visits since joining. That's real impact. But it's not the kind we are good at measuring or rewarding.
This is about to change. A little-noticed provision in the Budget signalled that the Treasury will create a new category of preventative spending, to ringfence money for projects to stop problems escalating. Some of society's most entrenched challenges -- homelessness, worklessness, chronic ill health -- tend to attract state attention only at crisis points, when the fix is expensive. So chancellor John Healey announced that "PDEL" (preventative department expenditure limits) will be accounted for as appropriate ways to spend public money, alongside revenue spending and capital investment.
What will count? The Treasury has long been sceptical of nebulous future promises. Social outcomes are harder to measure than a bridge, and can take much longer to bear fruit. Some civil servants predict a rash of spurious bids from departments trying to relabel bad projects. Others mutter that politicians treat spending like Catholic indulgences: they can look virtuous without paying too much attention to details.
That said, this move could be transformative. After all, it's not as though current public spending is terribly effective. I once helped a woman who was offering to become special guardian for her grandson (her daughter had succumbed to heroin). Social workers insisted the boy must have his own bedroom, but the housing department wouldn't give them priority, even though the alternative was for that little boy to be taken into care: hugely expensive and with poor outcomes. In the end she prevailed. But the system was trapping itself.
Health offers clear-cut, well-documented examples of the benefits of early intervention, from tobacco controls in France to community exercise schemes for the frail elderly in Japan to the NHS diabetes prevention programme, whose participants have been found to be 20 per cent less likely to develop type 2 diabetes. That may not sound much, but the NHS spends 9 per cent of its budget on this condition, about £10bn a year.
In other areas, the payback is harder to define. Take the "troubled families programme", created by the government of David Cameron to help families with multiple problems -- addiction, youth offending, worklessness, non-attendance at school. In 2011, 120,000 families were identified as costing the state about £9bn a year. I met police officers, social workers, health visitors and local authority staff who felt liberated by the chance to climb out of their silos and try a "whole-family approach" to break cycles. Under the determined leadership of Louise Casey, the programme challenged behaviour, especially around abuse. It also tried to build trust with the services that had popped in and out of the lives of these families for years, often viewed with deep suspicion.
Did it work? By 2015, most of the families had seen some short-term improvement in school attendance, youth offending or getting an adult into continuous employment for at least three months. This was progress, but it wasn't possible to say these families had been truly turned round. In 2016, the government estimated that every £1 spent in the councils studied had led to a gross saving of £2.11. But it couldn't be categorically proved that this was directly attributable to the scheme (now called "supporting families").
With entrenched problems so hard to tackle within political timeframes, it's not surprising that prevention is often the first thing to be cut when budgets are under strain. Whitehall's territorial instincts don't help. Investing in adult social care, for example, benefits the NHS and the health department by freeing up hospital beds, but the main funders are councils and the Department for Levelling Up.
Yet pouring money into the same silos isn't working. In a powerful speech this week, children's minister Josh MacAlister described escalating costs in children's social care as a matter of "moral urgency", with public money being sucked into children's homes rather than given to intensive early help to avoid the need for residential care.
The coming months will see a growing push to expand a longer-term approach, and for prevention spending to be treated as an investment. Next week, Alan Milburn's report on Neets (young people not in education, employment or training) will argue that money spent now on employment support could reduce future welfare and health bills.
Tight measurement and clear outcomes will be essential, and ideally pilot projects. Unless money is spent wisely, the argument that prevention can pay will founder on a welter of waste. If it fails, we will be fated to live out Henry Ford's warning: "If you always do what you've always done, you'll always get what you've always got."
The opportunity is coming: to prove the concept; to address chronic rather than acute problems; to liberate professionals to use their common sense. It should also be a chance for government to back charities and social enterprises already showing the way. Listening to people, focusing on their needs and preferring solutions to tick-boxes can do immense good.
