The chair of the Early Intervention Review calls for more investment to help children flourish in later life. He discusses some options – such as bonds, Isas and extended prudential borrowing – ahead of a report for the prime minister
Every year Britain pays a gigantic price for problems that might have been prevented in early childhood. Billions of pounds are spent on intervention programmes that are generally too late to avert ill health, under-achievement at school, unpreparedness for work, antisocial behaviour and crime, addiction, dependency and destructive and dysfunctional patterns of life. All too often these problems repeat themselves through generations, at an ever-increasing cost to our society and our economy.
But things could be so different if we intervened early enough in children’s lives to give them the bedrock of social and emotional skills that would enable them to flourish throughout life.
Last year, Prime Minister David Cameron asked me to write a report on how such early intervention could work. It was published in January as Early intervention: the next steps. I made the case for investing in a range of programmes, especially in the first three years of life. A growing body of evidence suggests that this is when intervention can significantly improve outcomes in childhood and throughout life. I suggested that these programmes offered the prospect of dramatic long-term savings in public expenditure and improvements to Britain’s international competitiveness and economic performance.
The report was welcomed by the government and all the main political parties and by leading figures in business, finance, academic life and public service provision.
Among its recommendations was the development of Early Intervention Places, where local authorities would introduce and extend the best evidence-based recommendations. Around 25 councils have expressed an interest so far.
Another proposal in the report was the establishment of an independent Early Intervention Foundation, to improve the evidence and understanding of successful programmes. This idea has attracted support from central and local government and from the growing social investment sector outside government.
I promised the prime minister a second report on options for raising funds for and attracting investment in early intervention. This is due to be published in the second week of June.
Although public finance will always be the major source of early intervention funding, it cannot have the monopoly. That is the central theme of my second report. The public finances are likely to face severe strain for a number of years, and there is no prospect of financing new investment on the necessary scale from this source alone.
But the report also sets out significant positive reasons for bringing other sources of finance to early intervention: to encourage innovation and local initiative, to create new incentives and pressures to secure value for money, and, most important, to encourage investment from institutions and individuals who want to contribute to British society.
The report asks the government to set free the funds that are now denied to early intervention by rigidities in our system of public finance. It examines options for using Treasury rules more flexibly to encourage investment and to extend prudential borrowing.
It also suggests how local government could turn into an agent of change in shaping our nation’s human capital as it was historically in building our modern physical infrastructure.
The report examines the use of bonds and equity solutions to release the massive downstream savings of early intervention to benefit our children and investors alike. It also looks at the possibilities of tax and savings incentives, including a ‘High Street’ Early Intervention Isa, an 18-year-long Children’s Bond and imitating the successful Dutch tax credit system. Whatever is done, its cost will be miniscule compared with that of persisting with expensive and largely futile late intervention programmes.
I also suggest how an outcomes-based payments model using a social intermediary, such as the proposed Early Intervention Foundation, could attract external finance for local councils, the third sector and other providers of proven early intervention programmes.
This model could transfer greater amounts of delivery risk from the public sector to external investors, who would receive a return for achieving successful outcomes.
An independent intermediary could develop the strongest possible evidence base of successful early intervention programmes that are sustainable and scalable. It could connect providers and funders in partnership. It would also ensure that the right investments are made in locations across the UK. Being free from government meddling, it would build confidence and trust among new investors.
The government tells us that in times of economic difficulty we should all be more creative and innovative with the money we have. Quite so. I argue that it is government above all that should help to release the extraordinary potential that exists in our communities to find new money to invest in early intervention. This would help pre-empt the enormous social and economic costs of denying babies, children and young people the start in life they deserve.
The Early Intervention vision is shared by the leaders of all the main political parties, by leading investors and funders, international experts as well as provider organisations from across the sectors. Will government lead, and enable us to move from talk to action?
Graham Allen MP is chair of the Early Intervention Review