A remarkable event will take place in Whitehall tomorrow. An independent report by a team led by Graham Allen, the Labour MP, will be published and will set out a way of fundamentally improving British society and cutting wasteful spending. What’s more, it will do it in a way that will require “no legislative time and no net increase in public expenditure”.
The report, Early Intervention: Smart Investment, Massive Savings, is focused on nipping future problems in the bud. By working with problem parents and children from birth, the aim will be to provide what Mr Allen describes as “a social and emotional bedrock for the current and future generations of babies, children and young people”. Such early intervention contrasts with the late intervention typical now. The old Jesuit saying — “Give me the child until is he seven and I will give you the man” — contains much truth.
The intriguing aspect of Mr Allen’s plan is that it will involve private sector providers and charities and the savings to the state from these early interventions will be channelled back to investors who put money into so-called social impact bonds, as well as used to reduce government debt. Individuals will be able to put their money into this most ethical of investments through tax efficient individual savings accounts (Isas).
The alternative, allowing young people to drift into delinquency, unemployment and a lifetime on benefits is costly. Children with behavioural problems cost the state an average of £70,000 by their twenties.
The National Audit Office says the annual bill for youth crime averages between £8.5 billion and £11 billion. Youth offenders placed in institutions cost taxpayers £59,000 a year, those in secure children’s homes nearly four times as much. A lifetime on benefits costs the state £430,0000, even leaving aside the loss of tax revenues. Every new “Neet” (young people not in employment, education or training) costs £45,000. Youth unemployment means billions of pounds in lost economic activity.
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The evidence, particularly from the United States, suggests the financial benefits from early intervention are considerable. The Nurse Family Partnership in America takes teenage mothers into a programme “to foster emotional attunement and confident, non- violent parenting”. It teaches them how to bring up their children.
So far it is working and providing a remarkably quick payback. Even by the time the children are 15 the savings, in terms of reduced welfare and criminal justice expenditure, are up to five times less than the costs if there had been no action. Early results from a similar programme in Nottingham are encouraging.
Iain Duncan Smith, the work and pensions secretary, threw down the gauntlet to employers on Friday. “As we work hard to break welfare dependency and get young people ready for the labour market, we need businesses to give them a chance, and not just fall back on labour from abroad,” he said. He is right to try. But even if firms acknowledge the benefits of engaging British-born workers, the reliability and work ethic of migrants are hard to beat.
In the case of early intervention, Mr Allen and his team also face obstacles. Whitehall’s dual suspicion of anything involving profits for the private sector and a social services ethos focused on misguided late intervention stands in his way. But this is a good idea and the government should back it. The report will say it is “the best sustainable deficit reduction programme available”. It deserves to succeed.