Conventional wisdom says the snow has been bad for Britain, with lost economic output of between £230 million and £600 million a day. These are substantial sums; not welcome news for British businesses also weathering a recession. But does this figure capture the most important aspects of the turmoil brought by the weather? We are all affected in different ways and surely to look at the financial loss to one part of society is too narrow a view. Valuing What Matters is all about looking beyond the easy-to-measure outcomes, and capturing those more intangible costs and benefits. Our valuing methodology – Social Return on Investment – brings a much wider range of outcomes onto the balance sheet.
So, what kinds of things are missed out in simply valuing absenteeism from work? Well first there are other arguably more important costs. Most people care greatly whether elderly relatives and neighbours will cope and get the support they need. In addition, it is estimated that there are close to 1,000 people sleeping rough every night in the UK. A focus on economic productivity has the effect of reducing the value of the costs and benefits to these citizens who are not in formal employment and are not big spenders.
And what about the positive impacts of the snow? Most of us have seen the snow create a quantity of happiness as people spend extra time with friends and family, say hello to and help neighbours, build snowmen together and benefit from the simple visual pleasure of a world covered in clean snow. Staying at home for work and school has led to impromptu family time, which has undoubtedly been both positive and negative!
2010 – a year of cuts
The year 2010 will be filled with political debate about public spending. When and to what extent should the state budget be cut? What areas should government continue to invest in?
Thinking about the value of snow is a useful way into explaining the challenge of calculating costs and benefits of public spending. People rely on traditional financial measurement not least because it is straightforward. This is part of the reason why discussions have taken the level of cuts as a starting point, rather than the outcomes we need most as a society, and how we share out the pie to try and achieve them. From a valuation perspective, there is a serious risk of false economies being created on a grand-scale as cuts sow the seeds of greater social deprivation and for heightened social problems in the future.
Our work in 2010 will continue to demonstrate the validity of this argument. A report examining spending in the field of youth justice will be published in the end February. Punishing costs will look at the consequences of high level of incarceration of children in England and Wales. It will show how the resources used in these mostly damaging interventions could be channelled into rehabilitation and prevention of crime. Such positive spending is not bloating the state budget; it is actively reducing the need for reactive expenditure elsewhere.
The second is our independent re-evaluation of the case for Runway 3 at Heathrow airport. This project takes SROI methodology into the realm of infrastructure decisions for the first time. We intend to add a fresh perspective to the highly-charged debate around Heathrow, and to demonstrate how a more holistic analysis can help achieve better, more accountable decision-making for infrastructure projects which can impact generations to come.
Looking Further Forward
The real value of work: In the same way that snow is not a purely economic issue, we will continue our research on the social, economic and environmental impacts of work. Later in the year, we will be building on the work behind A Bit Rich: Calculating the real value to society of different professions, published just before Christmas. The report generated huge media and public interest in Britain and abroad as it tapped into an instinctive feeling that the salary structure in our system is not following priorities for a healthy society.
Inequality: A new branch of the VWM work will look at, arguably, the biggest source of negative externalities in society: economic inequality. Economic inequality is not only unjust and corrosive for society it also results in lower health and wellbeing outcomes for everyone – even the rich. As we continue to see bankers receive obscene bonuses and tax havens for the already super rich it is more important than ever to be building a strong case for the political elite to make lowering economic inequality, rather than simply poverty, a policy priority. In particular, we will be unravelling the structural causes of inequality; highlighting the ways in which it has resulted in a number of social and economic misdemeanours in society including youth unemployment; and advocating policy solutions. Work is already underway – look out for our report written for the Joseph Rowntree Foundation which will be published later in the year.
The real price of a shopping basket: The production of all goods has social and environmental impacts. As a rule, few of these impacts are reflected in the prices, but what if they were? Would a locally grown, organic apple be cheaper or more expensive than an imported one? Would a train ticket cost less than a flight? Our report will provide some concrete examples of the real prices of items, as well as new insights into the debate on corrective taxes.
Privatization and outsourcing: Another area where an analysis of social value can provide surprising conclusions is the privatization and outsourcing of public services. Shifting the provision of services to the private sector is justified in terms of cost savings. But when the result is large cuts in payroll or the flooding of public space with advertising, these savings may be exceeded with indirect costs elsewhere. Our report on the topic will study the benefits and disadvantages of this trend.
There is much debate about whether snow will become a feature of the British winter and if the billions necessary to invest in snow-proofing our transport systems are worth it. Perhaps by the time it snows next year we will have faced up to the level of investment needed to tackle climate change, which unlike snowfall has little upside.