Will HorwitzAccording to the Public Accounts Committee report released today, government is systematically wasting billions of pounds each year by acting too late. For example, instead of providing expensive benefits and support for people unemployed for years, we can ensure they leave school with half decent qualifications or get some prompt retraining when they lose their job. Will Horwitz argues that looking at the longer term when it comes to social spending would mean money could be invested in early action, saving the taxpayer billions.

Government sometimes wastes money in straightforward ways; the Public Accounts Committee (PAC)’s exposure of the £10bn lost to an abandoned NHS IT system over 12 years made headlines on Wednesday, just the latest example of spending on projects that yield little in return. But money is being lost all the time, in much greater quantities. Today, a PAC report on ‘early action’ starts to lay out how: “The Government spends nearly £400 billion each year on, for example, health, education, employment, justice and welfare”, but much of this (the National Audit Office have estimated as much as 94% in some departments) is on late, acute intervention once things have gone wrong.

Emergency surgery for a heart attack that could have been prevented with exercise and healthy eating. Expensive benefits and support for people unemployed for years who, had they left school with half decent qualifications or got some prompt retraining when they lost their job, would be thriving in the workplace. Ruinously expensive prisons and young offenders institutes for people who – with the right support early – would never have turned to crime.

Government, according to the PAC, are systematically wasting billions of pounds each year on acting too late but it is waste that goes almost unnoticed because we, like government, are trapped in the present; if you need heart surgery it must be paid for, if you’ve committed crime you should go to prison. A&E, police and prisons win votes and elections, healthy eating campaigns and youth work usually don’t. And when budgets are squeezed and have to add up this year, public sector leaders often have little option but to cut the early action programmes and preserve the acute, even as they see demand rise inexorably. That probably explains why local authority spending on prevention fell almost 10% in cash terms in 2011/12, spending on youth services fell by 26%, and in adult social care prevention only accounts for 4.2% of spending despite the clear evidence that it can work.

As the PAC recognise, this mindset is unsustainable; if we could ever afford to wait and spend more we certainly can’t now, when investing small amounts upfront could save billions in the future. This week’s announcement of free school meals for primary aged children is a powerful example of early action; it increases attainment particularly amongst poorer children, an investment in their future meaning they grow up more successful, contributing more and costing less. But the move stands out because in these austere times investment in early action is all too rare. In this case it looks as though the money will be found from a budget elsewhere – difficult choices, we wait to see what has been sacrificed.

The Early Action Task Force has proposed another mechanism through which money can be invested now in early action: by looking over the longer term, not just 1 or 3 years but ten or twenty, so that extra spending now to save money in future isn’t stymied by a myopic focus on this year’s budget. We already do this with capital spending, where funding for large infrastructure projects is committed upfront in the knowledge that the rewards will accrue over many years. Why not do the same for social spending? The PAC recognise the importance of the long term too, recommending that ten year impact assessments be embedded within the next spending review.

In a short and punchy report that’s well worth reading, they urge the Treasury to step up; as the department responsible for ensuring money is well spent which currently devotes remarkably little resource to ensuring it’s spent at the right time. As the PAC point out there is no common definition of early action across government and no way of knowing how much is spent on it, and until there is leadership from central government this is likely to remain the case.

The report says: “A concerted increase in effective early action could help to deal with the root causes of…problems, benefiting individuals and society and saving the taxpayer billions of pounds each year.” Savings of this kind would dwarf the occasional bungled IT project – it is time the Treasury start taking them seriously.

Note:  This article gives the views of the author, and not the position of the British Politics and Policy blog, nor of the London School of Economics. Please read our comments policy before posting. 

About the Author

Will Horwitz is researcher for the Early Action Task Force, based at Community Links. He previously worked for Oxfam.

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