The Imperative of Social Return on Investment Measure
Like many people, I work on a basis that for every negative there is a positive, and despite all the concerns and turmoil that exists in the world today, there are some significant and fundamental societal shifts occurring that provide much for humanity to be positive about. However, if society is going to achieve sustainability with this positive change, then I propose a new perspective on public service investment, and a set of social value measures better supporting pro-active wellbeing development is urgently needed.
LEVERAGING SOCIETAL CHANGE FOR WELLBEING DEVELOPMENT
The UK government and others of the Organisation for Economic Co-operation and Development (OECD) countries have been under long standing pressure to improve public sector performance and at the same time contain expenditure growth. While factors such as an ageing population and increasing health care and pension costs add to budgetary pressures, citizens are demanding that government be made more accountable for what they achieve with taxpayer’s money.
The UK, as have other countries, have in the past adopted a diverse range of approaches in the attempts to reform key institutional structures, including increasing devolution and decentralisation, strengthening competitive pressures; transforming workforce structures, size, and human resource management arrangements, changing budget practices and procedures; and introducing results-oriented approaches to budget and management. None has managed to secure a more financially sustainable service delivery model to date.
Even with recent announcements of sizeable funding deals for the public sector, the gap between service capacity and needs of the population is very wide and growing at a rate that is outpacing the release of these funds and development of capacity.
To resolve this, the government, national bodies, regulators, and commentators are seeing opportunities for better collaboration and engagement through partnerships with charities, voluntary and community organisations, and social enterprises (VCSE sector). In a way, this transforms service delivery, away from the current crisis response, and towards an early intervention, preventative service model, that in time generates reductions in demand for public services.
In fact, many acknowledge this to be crucial to the success of plans for improving health, wellbeing, and care outcomes, and achieving a more sustainable service delivery model across public service provision. The positive of a pandemic is that we have been reminded that we live in great communities, amongst people that care, and are prepared to go to great lengths to support others.
At the outset of the pandemic, across the UK and in less than 2 days 750,000 people registered to be an NHS volunteer, alongside a proliferation of volunteering start-ups to help vulnerable neighbours with shopping, collecting medicine and such like. Nearly 3,500 local mutual aid groups registered on the Covid-19 Mutual Aid website and around two million people joined local support networks on Facebook.
WE DO HAVE GREAT AND STRONG COMMUNITIES
Whilst volunteering levels during the pandemic were extra-ordinary, the response is in effect a reflection of the fact that we live in an extremely benevolent society. Over £45 billion is donated every year to over 200,000 charity and voluntary sector organisations that provide paid employment to nearly 900,000 people. 6.8 million unpaid carers deliver health and social care cost savings of more than £130 billion¹ every year, and not for profit social enterprises contribute over £60 billion² to the UK economy.
If UK society is truly going to maximise the opportunities for recovery of social and economic value created from achieving turnaround status on social issues, like poverty³ (£78 billion), or criminal⁴ activity (£100 billion), drug and alcohol abuse⁵ (£36 billion), mental health⁶ (over £120 billion) amongst many others, then we need to establish better business cases and measures for success, that accelerate and grow place making, and asset-based community developments.
These cases for systems change must involve a transformation away from current siloed service delivery structures and commissioning models to alternative approaches better able to service collective wellbeing needs of people and places, and transition to an alternative early interventional / preventative service delivery model.
POVERTY AS AN EXAMPLE
For Devon, a Children’s Services Self-Assessment went before Devon County Council’s Children’s Scrutiny Committee in November 2019⁷ and provided a then up-to-date evaluation of the needs of children and families in Devon. The report outlined how 14% of the local authority’s children are living in poverty before housing costs, but that rises to 25% after housing costs are added to the figures.
More than 10 per cent of children are entitled to free school meals, with the report also highlighting that 41,000 households in the county are affected by fuel poverty. Commenting on the report after the meeting, Councillor Hannaford said:
“These local figures for child poverty in Devon are truly shocking, and it’s completely unacceptable and wrong in 2019, in one of the richest countries in the world, that we are still dealing with this most basic of issues affecting so many children.”
Yet this is the state of things after years of government, public sector, academic, and specialist focus on the need for prevention rather than cure, calls for proactive action and this generating some very fundamental steps:
Child Poverty Act 2010⁸ - “which received Royal Assent in March 2010, fulfilled the commitment to enshrine the child poverty target in legislation.
Secretary of State for Work and Pensions – Child Poverty Strategy 2014-17⁹ - “restating the Government’s commitment to tackle poverty at its source – be it family breakdown, educational failure, addiction, debt or worklessness. We are clear that this task starts from the earliest stages in a child’s life.”
However, despite the intentions over this last decade, the Children’s Commissioner in January 2021, with support of a cross-party collection of politicians and campaigners had to call for urgent action, highlighting that:
“Child poverty was already a problem before the pandemic, but it has been laid bare by the Covid crisis and must not be ignored any longer. The shocking image of a family being sent half a carrot in a food parcel shows a system of support that, as well as often falling short, is at times demeaning and stigmatising.
Yet some are still squeamish about even using the phrase ‘child poverty’. Neither of the two main political parties fought the last General Election with plans to significantly reduce child poverty, despite the fact it had been rising for most of the past decade.”
The fact is the tide on poverty in the UK, or Devon is not being turned, and now the forecast is of dramatic rises¹⁰, as has been recently highlighted by the Resolution Foundation following review of Chancellors 2022 spring statement:
“Inflation is now surging, economic growth for 2022 revised down, and real wages are projected to fall by 3.6 per cent over 2022. The slow recovery from this fall means that, by 2027, real wages are set to have grown by just £18 a week since the financial crisis, compared to £240 a week if they’d grown in line with the pre-financial crisis trend.”
“Taking measures announced by the Chancellor into account, the typical working-age household faces an income fall of 4 per cent, or £1,100, in 2022-23. But the greatest falls will be felt by the poorest quarter of households who are set to see their incomes fall by 6 per cent. This will see a further 1.3 million people fall into absolute poverty next year, including 500,000 children – the first time Britain has seen such a rise in poverty outside of recessions.”
AN URGENT CHANGE IS NEEDED ON THE PERSPECTIVE IN PUBLIC SERVICE INVESTMENT
Because of studies undertaken by Donald Hirsch from the Centre for Research in Social Policy at Loughborough University in 2013¹¹, we have an ability to describe the social and economic cost of Devon’s 37,483 children living in a state of poverty. Critically we come to understand that this exceeds £400m per year and represents an average annual cost to each Devon household of more than £1,000.
In 2016 this research was further advanced by the Joseph Rowntree Foundation (JRF) in the Counting the cost of UK Poverty¹² report. Which went on to quantify the impact on increasing demand and subsequent cost to public services. This analysis exposed a total UK public service cost of £69 billion, with identifiable knock-on effects of child and adult poverty incurring a further £6 billion and £2.7 billion respectively, for a grand total of £78 billion!
Poverty’s cost impacts across public service delivery are assessed as:
42% in healthcare costs (£29 billion for the UK – this translating to £168 million for Devon),
11% in children’s services (UK £7.5 billion – for Devon £44 million),
7% on adult social care (UK £4.6 billion – Devon £28 million),
14% in education (UK £10 billion – Devon £56 million),
13% police and criminal justice (UK £9 billion – Devon £52 million),
6% housing (UK £4 billion – Devon £24 million),
7% across other departments (public Health, higher education, fire & rescue, transport & environmental services – UK £4.9 billion – Devon £28 million).
It is a something of a peculiar fact that today the public sector is framed as an unaffordable cost. Whilst at the same time the nation carries forward an unresolved issue of high levels of poverty, that generate subsequently avoidable costs of some magnitude throughout the public sector.
Critically the studies reconfirm that addressing poverty requires specialised resources to come together and work in a non-silo ‘d response, for a positive turnaround state to be achieved and maintained in the long-term.
Today at least, we can now also recognise that this specialist collective of health, social care, education, employment, housing, policing and more, would benefit significantly from being guided in the development of plans by local communities and charity, VCSE sector service providers. Acknowledging that these are a great source of insight and intelligence on local needs, as well as proven innovators and entrepreneurs when it comes to development and delivery of viable, sustainable, local place-based community solutions.
Devon has a strategic plan for tackling poverty and inequality¹³, and it acknowledges the need for a coordinated approach and promotion of services that increase resilience, self-reliance, and independence. The key question must be how will the implementation of this strategy make the fundamental difference needed?
SOCIAL RETURN ON INVESTMENT MEASURES TO TRANSFORM THINKING AND SECURE INVESTMENT
The fact is that as significant as poverty is, in the way that it affects the wellbeing of our communities, it is in effect a tip of the iceberg when the collective determinants of wellbeing needs across the UK are considered.
Since 2017, I have been working on development of social and economic measures that could be used to facilitate a shift from the narrative that our public services are unaffordable, to instead, the better recognition of the substantial social and economic gain that could be achieved from more appropriate funding and investment.
This work is driven not just by the knowledge that the current crisis response model of public service delivery is unsustainable, but also by the lived experience of the negative impacts on the quality of life personally and recognising the same in experiences of millions of others struggling to get the care and support they need. this being both unacceptable and unfathomable when a better understanding of the extent of lost opportunity comes to the surface.
My work has involved a broader review of academic studies and research from which it has been possible to quantify social and economic impacts of other social issues. This additional data provides context to better understand the cause and effect measures of the broader range of wellbeing needs, described for example in public sector reports such as the Joint Strategic Needs Assessment (JSNA)¹⁴, and beyond just the issue of poverty, to offer a new and bigger perspective and contribution toward investment decision making.
Social and economic impact of JSNA issues, such as supporting people with mental health or long-term chronic condition issues, homelessness, or the cost of truanting from school, servicing of anti-social behaviour orders (ASBO), other criminal activity, or population welfare needs for example build to a much larger £2 billion of lost social and economic opportunity in Devon. Going beyond and acknowledging that Devon’s challenges are replicated across every county of the UK, then this lost opportunity value grows exponentially to very easily exceeds £500 billion for the whole of the UK.
Now more than ever, recognising the economic challenges and austerity of the last 10 years that are now leading into the new challenge of the pandemic, society needs to ensure any investment made into public and community services does produce a measurably positive outcome, and one that demonstrates a turning of the tide on the current growing deficit of societies’ health and wellbeing needs.
ABOUT THIS WORK
It is my long-term ambition to see measures of wellbeing that guide societal development bring about a shift from the current singular focus on the economic measure of Gross Domestic Product (GDP), of goods / services produced, that presently ignores environmental and human capital, inequality, and the unpaid economy, those millions contributing to society supporting not for profit activities highlighted at the outset of this article.
As well as continuing to mature the wellbeing data sets, I am also seeking to extend the range to include sustainability framing, to allow the inclusion of ecological impacts, community wealth building and regenerative economics, ideally through incorporation of works already done, or in progress. To some extent the government TOMS (Themes Outcomes and Measures) are reflecting some non-monetary aspects of social value created by investments, but for a limited range of outcomes. The New Economics Foundation proposes a dashboard of five indicators and the Doughnut Economics approach takes a much wider range of factors into account, but the data requirements are large. In short, issues in measuring social and environmental value have yet to be resolved.
If you are interested in this work and would like to know more, or better yet explore how you might collaborate and support this work, then please contact me at firstname.lastname@example.org
About the author
Paul White is a founder of eCulture Solutions, and a passionate exponent of social enterprise and the opportunity to leverage digital innovation and technology in the delivery of sustainable, social, economic and ecological change to better addressing development of individual, family, and community wellbeing.
¹⁰ Inflation Nation • Resolution Foundation – Putting the Spring Statement 2022 in context
¹⁴ https://www.gov.uk/government/publications/joint-strategic-needs-assessment-and-joint-health-and-wellbeing-strategies-explained and an example from Devon - https://www.devonhealthandwellbeing.org.uk/jsna/