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Bookmark and ShareAnna Coote is Head of Social Policy at nef.

The government wants to build a ‘Big Society’ at the same time as a imposing a very big squeeze on spending for public services.  This will not work unless spending is focused more sharply on preventing needs arising or intensifying ,and on supporting individuals and groups so that they can do more to help themselves and each other.

The danger is that the first victims of the squeeze will be the very things that are essential for preventing harm, improving well-being and encouraging self-help and mutual aid.  Examples include healthy and appetising school meals, child care services, open access to swimming and other sports, community meeting places, training and other resources for local groups, ‘social prescribing’ by GPs, out of school activities for young people, programmes to keep older people active and socially connected, more and better green spaces in urban areas, and much more.  Cuts in these areas will only push up demand for services in the longer run.

Read more about nef‘s take on the Big Society; why we think prevantative public services are valuable, especially for children; how welfare can be transformed to meet the economic and climate crises; and how co-production can improve the experience of service users and public servants.

Bookmark and ShareStewart Wallis is nef‘s Executive Director.

Letter to The Times, 26 May 2010.

Sir, While your leading article (“Cuts and the coalition”, May 25) hails the “restoration of the public finances” through the cuts announced on Monday, it is important to remember that this is not an expenditure crisis, it’s a revenue crisis caused by the behaviour of the banks. Failure to tackle the bank issue will inevitably lead to the same situation remerging all too soon.

Government should, as a first step, look to rein in the money it is already owed. In November last year the Treasury Select Committee reported that HM Revenue and Customs was sitting on £28 billion of unpaid tax bills that had been agreed but not settled. A further £25 billion could be sourced by plugging tax loopholes that the Government considers contravene the spirit of the law.

Stewart Wallis
Executive Director, New Economics Foundation

Bookmark and ShareAleksi Knuutila is a researcher in the Valuing What Matters programme at nef

In times of debates on budgets, dizzying large figures are passed around. What does it really mean to curb back government by £6.25 billion? The numbers can be made a bit more concrete by thinking what you get for the money. Some estimates say the first round of cuts equals losing about 100,000 jobs in the public sector. It also seems that the cuts are just about enough to finance a potential coming round of expanding prisons.

In the run-up to the elections, only the Liberal Democrats were rejecting expanding the UK’s prison capacity. The Conservatives were committed to matching Labour’s plans of expanding prisons by 14,500 beds. In the outlined coalition agreement, any mention of policy on prisons is strikingly missing. This may mean that commitment is being scaled down. Given the Conservatives’ tough stance on law and order, an era of penal moderation seems unrealistic.

The Ministry of Justice recently estimated that the building and running costs of five Mini-Titan prisons could be up to £4.5 billion pounds. These would deliver about half of the planned increase. England and Wales already have the proportionally highest prison population of all Western European countries. After the planned expansions, it would offer Zimbabwe and Tajikistan tough competition in the statistics.

In the current state of public finances, decisions around public spending warrants stronger scrutiny than ever. Are the billions we are disbursing for locking people up really creating a safer society?

A new report by nef studies in depth the consequences of imprisonment of young people and children. The evidence reviewed for Punishing Costs shows that going through prison makes it more likely for released young people to face unemployed, to have unstable accommodation, and to live on a lower income.

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Bookmark and ShareJulia Slay co-ordinates nef‘s work on co-production.

Last week I received a call from a director of services from a large London council. Let’s call him Mr Borough. He had just read our latest report, Public Services Inside Out, which makes the case for people and professionals designing and delivering public services together in equal partnership: what we call ‘co-production’. This innovative approach, we argue, results in much better outcomes, often shifts towards a more preventative model of public services and can lower costs. Mr Borough had also been told that he would need to make a 30 per cent cut to his budget within the next three to five years. But instead of heading straight for the nearest pub to drown his sorrows, he was actually excited by what lay ahead. Mr Borough felt that the current ‘squeeze’ on public services represents the biggest opportunity he had ever faced to radically revisit the shape and style of the support he is able to offer people.

Co-production offers such an alternative, as a wider transformation of our public services by bringing new resources – people’s time, skills and experience – into the system.

Mention “co-production” to someone and the chances are most people won’t know what you’re talking about. But although the vocabulary of co-production isn’t well known, the practice of it is increasingly happening all around us. Almost any service can be co-produced: while the actual process and activities can vary, it almost always looks and feels the same as the principles which underpin the approach are manifested in everyday practices, as well as in strategic level governance.

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Bookmark and ShareJulia Slay co-ordinates nef‘s work on co-production.

There’s something in the air at the moment. A combination of spring air, Icelandic ash, and the almost tangible pulsations of change vibrating up and down the country. The election comes. And with it is a sense that we can review and take stock of how we, as a country work. We look to new solutions, to innovative models and ideas which might point the new to a new direction – particularly, in our case, for how we might run our public services.

Last week, among this buzz of election fever,  fifteen front line public sector workers and around a hundred guests came together to talk about one such innovation – an approach where public services are designed and delivered in equal partnership between people and professionals – also known as co-producing public services. We were launching our latest publication, Public Services Inside Out, and show people how co-production works on the ground.

Those who came were struck by how radically different the outcomes of co-production can be. Max, an eighteen year old participant in the national programme Learning to Lead, presented confidently and fluently to a large group about how their model of self elected student councils makes students the ‘crew, and not the passengers’ of their education.  User Voice, whose strapline is ‘only the offender can stop re-offending’ made a persuasive and passionate argument for the importance of working with offenders to identify long term solutions and preventative measures that will break the current criminal justice deadlock. Mark, a member of KeyRing who was been supported to live independently, spoke about how his disabilities had previously marked him out as someone who ‘needed’ things, and that these needs had defined time and time again what he couldn’t do. Since joining KeyRing, the focus has shifted onto what he can do, and where his skills and abilities can be supported and developed to help him live within a mutual support network where he is integrated into the community.

All of the front line staff and people there illuminated the key to co-production. If we peg people up as ‘users’ of a public service which is delivered, they will be relegated to a passive role which adds little social value, and provides no opportunity for equal participation in our services. But if we understand that people have skills, capabilities, knowledge and experience to contribute then we can see the huge potential for unleashing these hidden assets and co-producing better outcomes across our services.

Bookmark and ShareStephen Whitehead is a project manager in the Democracy and Participation team at nef

This week’s National Digital Inclusion Conference was a relatively upbeat affair – a thousand techies and bureaucrats itching to do something – anything – to take the digital revolution to the rump of luddites who remain stubbornly offline. The solutions proposed were many and varied – from paying the unemployed to lay fibre-optics up people’s driveways, to teaching your neighbour how to email. But lurking amidst all these juicy carrots was a worrying undercurrent of stick. Several times across the last couple of days, I’ve heard people have talking openly about using the withdrawal of offline services to force people online.

To be fair, these were all reasonable proposals by reasonable people: laden with humanising caveats about support, education and showing people the benefits of online services. But still, they sent a little shiver up my spine. The idea of withdrawing service to drive people across the digital divide is, in my view, dangerous and short-sighted.

Firstly, and most obviously, there is the danger of excluding people from vital services. In a time of huge financial pressures on all parts of government it will be easy for those comforting caveats to slip away, as agencies rush to withdraw but skimp on support. This is especially troubling where the responsibility (and the budget) for service delivery is held by an agency with little or no direct responsibility for digital inclusion. It will be easy for them to withdraw offline services to save money (indeed, cost saving was explicitly cited as a motivation by some) and assume that support with going online will happen elsewhere. Inevitably, the effect of withdrawing offline services will be most keenly felt by the already excluded who will have to use cumbersome work-arounds or simply miss out.

Secondly, and more fundamentally, this idea reflects an impoverished view of what digital inclusion could mean. Just accessing the same services as before, albeit with quicker turn-around times or less hassle, is hardly the transformative prospect that we might aspire to. Real digital inclusion means much more than being a more able consumer of public services, or for that matter, a more able consumer of cheap flights and cheap DVDs.

Inclusion means being a part of something – a family, a community, a workplace, a network of friends. And digital inclusion means being a part of something online. Making people digitally included means giving them the tools and skills to build relationships online.

Rather than forcing people online to do the things that they already do, we should be thinking about what digital public services can offer which will make us want to be a part of them – and how to connect them up to people’s valued real-world networks.

Forcing people online, if it works at all, will create a class of digital refugees, isolated and disempowered. But by supporting people to come online and form meaningful, effective relationships, perhaps we can create a nation of digital citizens – confident in their power to work together for their common good.

Bookmark and ShareAndy Wimbush is nef‘s Communications Assistant and blogmaster.

The Tobin Tax is back in the headlines again, with Gordon Brown now insisting that support for a levy on financial transactions is growing. I’ve also noticed that our friends at the World Development Movement are starting to campaign in this area. nef made a case for the Tobin Tax way back in 2001, with our report Robin Hood Tax.

All of which gives me license to reprint a cartoon I published in the last edition nef‘s newspaper, Radical Economics. Enjoy!

(click for a bigger version)

Bookmark and ShareEilís Lawlor is the head of the Valuing What Matters team at nef.

Photo by Jay Bergeson via Flickr

The start of the year 2010 is marked by a post-Copenhagen melancholy, the crisis in Haiti, and the actual occurrence of the proverbial blue moon. And obviously the snow, bringing much of the country to a halt.

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.

Bookmark and ShareAndrew Simms is nef‘s Policy Director and head of nef’s Climate Change programme.

Cuts, cuts, cuts… The word is chanted in politics until we work ourselves into a frenzy. We’re transfixed by a large and growing public debt brought on by banking failure. But does it make sense, now, to cut public spending? Can we even afford to? History suggests not.

For three years after Roosevelt announced his New Deal in 1933, regulating the banks and launching a bold programme of public spending, things went well. But then he blinked. Afraid of rising debt, he cut spending – and made the depression worse. It was only later, when there was a surge of production for the war effort, that things turned around again.

Public spending creates jobs and has a positive, “multiplier” effect in the economy. There are more economically active people to pay taxes, in turn reducing the public debt. It is a false economy and counterproductive to cut in a downturn.

It’s also a schoolboy error to think that a national economy should be managed just like a personal budget. Governments can issue and manage money for a wide range of purposes, individuals can’t.

But, of course, that doesn’t just mean the government should go ahead and spend on just anything. On the contrary, some spending can do more harm than good.

It’s hard to be precise, but it’s very likely that most of the benefits from the blanket cut in VAT and the bung given to the car industry through the scrappage scheme leaked out of the UK – not to mention encouraged environmentally wasteful consumption.

Targeted spending, however, in the face of climate change and rising energy insecurity, could do an awful lot of good, creating jobs, cutting carbon and fuel poverty and helping to reduce the public debt.

A new report The Cuts Won’t Work by the Green New Deal group (of which I am a member) shows that earmarking just £10bn in “green quantitative easing” (that is, releasing more money into the economy on the condition it is spent on low-carbon initiatives) could create 60,000 long-term jobs in the energy efficiency sector (a total of 300,000 years worth of employment). The same amount could multiply by five the contribution to the UK’s electricity supply of onshore wind power.

Spending on some things creates more jobs than spending on others. Spend on public transport, housing and energy efficiency and you will create far more jobs, pound for pound, than you would if you opted for unproductive military expenditure. Cancelling the Trident replacement and spending instead on the great low-carbon transition would create 105,000 jobs according to a York University study.

So, should the chancellor implement cuts when he announces the pre-Budget report on Wednesday?

Medieval doctors used to think that the best way to cure patients of a wide range of ailments was to drain their blood. More often than not it killed them.

The government and the opposition parties all need to understand that economic bloodletting will not work. It’s far more likely to kill the ailing, carbon-addicted economy.

Bookmark and ShareJody Aked is a researcher at nef‘s centre for well-being.

We can save money and put a stop to persistent social problems by investing now in a preventative system of public services for children and young people.

We can save money and put a stop to persistent social problems by investing now in a preventative system of public services for children and young people.

Gordon Brown succumbed to mounting pressure from the somewhat unrelenting Tory line on public spending cuts and used the “c-word” in his speech at the TUC conference yesterday. The message was that cuts under a Labour government may be necessary to restore public finances, but they won’t be as bad as under the Conservatives.

Of course, the devil is in the detail and neither party has shed much light on where these cuts will take place. Brown has assured us that “vital” frontline services will be saved from any future belt-tightening, because the cuts will happen in “low priority budgets”. What he didn’t say was how we decide which services are high priority and which are low. In the scramble for votes before the General Election, there’s a risk that all parties will try and score points simply by promising bigger savings and this will narrow the focus of the debate.

Quick fixes will be seen as cheap and attractive. Those services that generate significant social value by way of bringing wider benefits to society but which will not deliver an immediate return to the State may be brushed aside, in favour of those designed to provide a short, but temporary, solutions for our most critical social problems. Already professionals working in children’s services have expressed concern that preventative services – which typically work ‘behind the scenes’ to keep families together, keep children in school, and promote mental and physical health – will be some of the first to go. Yet, the work of these services, particularly in early childhood, has far reaching implications for generations to come, beyond the next term of office starting after the Election.

Consider, for example, nef’s analysis of the social and economic benefits of preventative and early intervention services, released today in Backing the Future: why investing in children is good for us all. Our reseach shows that if we invest upfront to rebalance our system of service delivery towards one that is more preventative than our current model, we can expect to save £486 billion over the next 20 years – even when the transaction costs of making the transition to a new system are taken into account. When compared to conservative estimates which show the UK’s preventable social problems – crime, mental ill health, family breakdown, drug use, and obesity – look set to cost the UK economy £4 trillion over the next 20 years, the case for investment is overwhelming.

And while it may seem like a strange time to be looking to temporarily increase and reconfigure public  spending on children and young people, the evidence indicates we can ill afford not to. At the moment it looks extremely unlikely that the UK will meet its poverty reduction targets, it is languishing at the bottom of international rankings of child well-being and the UK has the lowest rates of trust and belonging among 16-24 year olds in all of Europe. The current system of services has got things the wrong way round. It spends much more on children and young people when problems have become entrenched, when they are often impossible and certainly expensive to remedy. Despite being one of the richest countries in the developed world, our society is one of the most unequal and one of the least child-friendly. By not proactively tackling the root causes of our social problems, we have for too long allowed them to become a drain on public resources: the price tag of the UK’s social problems is a third more expensive than the next most troubled nation in Europe.

Even in a time of immediate crisis, any politician worth their vote needs to keep one eye on the future. Out of the ruins of the recession, we need to harness the opportunity to build a stronger society, with fewer social problems. To achieve this, we need policies that can improve the life chances of today’s most at-risk children and succeed in preventing the same root causes of social problems, including poverty and inequality, from having an adverse effect on the next generation. As the details of spending plans are unveiled, we should not be won over by easy political sells at the expense of funding decisions that will put the UK on a trajectory to a stronger, fairer and happier future.

Backing the FutureBacking the Future: why investing in children is good for us all makes the social and economic case for switching to a preventative model of services for young people and children. This research was carried out by nef in partnership with Action for Children, whose Executive Director Clare Tickell makes the case for change in today’s Society Guardian.

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nef employees blog in their personal capacity. The opinions expressed here do not necessarily reflect those of the new economics foundation.