David Simmonds: The case for more investment in early intervention

The long-term dividends for individuals, local services, employers, and the Exchequer can far outweigh initial costs.

David Simmonds is a Conservative councillor in Hillingdon and trustee at the Early Intervention Foundation.

As we learn more about the long-term benefits of early intervention, the case for long-term investment becomes clearer.

The basic principle of early intervention is as straightforward as it is familiar: it’s better to step in early, when a problem first starts to appear, than to wait and deal with the consequences later.

When it comes to children’s development, from their earliest years through to their transition into adulthood, the long-term consequences of failing to act early can include an increased risk of mental health problems, poorer academic achievement, reduced employment chances, increased antisocial behaviour, risk of offending, and reduced adult relationship quality – which, alongside other factors, can simply serve to perpetuate the cycle from one generation to the next.

In short, too many children are facing challenges or disadvantages that can threaten their future life chances, health, and happiness.

While early intervention cannot solve every problem, it can substantially improve children’s lives, if it is delivered to a high standard to the children or families who need it most. It is vital now, today, to ask whether this is being done, or whether some fundamental changes are required so that effective, early support can be provided to all those who stand to benefit.

First, however, we need to come to terms with the wider benefits that effective forms of early intervention can achieve. Leaving problems unresolved in childhood doesn’t only impact on the lives of individuals and families – it also impacts on society and our economy, by undermining the wellbeing of communities and reducing people’s opportunities to live positive, productive, successful lives.

Intervening early is crucial. There are good grounds to believe that investing early rather than later will lead to cumulative benefits – that the skills children acquire when they are young will lead to greater additional gains as they get older. And these benefits are widely shared, accruing to the whole of society and the wider economy, not just to public services and government bodies.

This ‘pay-off’ may be particularly large where early intervention leads to labour market gains. For example, the Department for Education has estimated that individuals who achieve five or more good GCSEs have additional productivity gains (counting benefits to the individual, Exchequer, and future employers) of around £100,000 over their lifetime, compared with those with qualifications below this level.

The flipside to this potential benefit is the potential extra costs associated with dealing with the long-term impacts of problems rooted early in life. The Early Intervention Foundation (EIF) has estimated that the cost of ‘late intervention’ – covering expensive, acute services such as mental health support, youth justice, and tackling school absenteeism or domestic violence – is nearly £17 billion a year across England and Wales. Though clearly these costs cannot be reduced to zero, this does outline the quantum of resources that are wasted in tackling issues that could have been dealt with sooner, and where the long-term outcomes for society could have been improved.

In short, we know that the costs of intervening early are likely to pay off to society in the long run. The sums can be difficult to do with great accuracy, given the complexity and assumptions involved, but there is a wide body of research which suggests that the value of these benefits to society is often far higher than the costs of intervening.

Now, those of us who advocate for early intervention – among which I count myself, as a trustee of the EIF and long-time champion of local early help services – are sometimes tempted to raise expectations just one peg too high, to alight on early intervention as a means of saving money in local services this year or next.

Early intervention can achieve such ‘cashable’ savings, but that’s when commissioners are able to turn around and decommission services or settings that are no longer required. If early intervention succeeds in reducing demand on a local service, but this additional capacity is immediately soaked up in dealing with other demands – perhaps issues or cases that have simply been on the waiting list – then what looks like a gain may not appear on the bottom line.

Of course, this is still a gain, if front-line services can address a wider range of problems or focus more time on the most urgent cases, but that’s not the same as saving money. As my colleagues at the EIF say, early intervention is not a financial coping strategy for local or central government, and arguments that rest on the potential for short-term cashable savings miss the bigger picture – and risk undermining the good case altogether.

Is enough being done to capitalise on the potential of early intervention? We know that there are some longstanding, oft-cited barriers within the system – from familiar challenges around funding and political short-termism, to less familiar issues, like just how much of what local services provide remains untested, and thus has not been shown to be working, with empirical evidence.

In their new report ‘Realising the Potential of Early Intervention’ the EIF has made a bold case for change, including some fundamental changes to happen at the national and local levels. As they argue, there are resources in the system, but more needs to be done to understand what impact it is having, and what scope there is to redirect funding to things which are more likely to be effective.

In early intervention. as in all areas, public money must be spent in ways that are more likely to improve people’s lives and which build our understanding of ‘what works’ to better inform future decisions.

John Bald: School inspection is not a “little extra”

There is no evidence of funding cuts reducing school standards. But Ofsted does need enough staff to thoroughly assess the performance of classroom teachers.

John Bald is a former Ofsted inspector and has written two books on the history of writing and spelling. He is Chairman of the Conservative Education Society.

Amanda Spielman’s appearance before the Public Accounts Select Committee, and her subsequent letter to it, were not unique – Sir Michael Wilshaw once answered on academy chains – but were certainly unusual. Her normal channel of accountability is, understandably enough, the Education Select Committee. This appearance was triggered by a report from the National Audit Office, saying that Ofsted had no evidence that its inspections were improving education, which, as the NAO knows perfectly well, is nothing new. The purpose of inspection is to report on what is happening – it is up to Ministers and other authorities to make things happen. Inspection can contribute indirectly, by drawing attention to good and poor work, but this is very difficult to prove. It can, conversely, fossilise ineffective, but generally accepted, practices simply by ignoring them.

The accounts committee has a Labour chair, and unions have been pressing Spielman to link what they see as falling school standards to cuts in funding, criticising her roundly for refusing to do so, and calling for the abolition of the inspectorate. Anyone knowing Spielman will understand her commitment to telling the truth as the evidence presents it, and if she says that there is no evidence of funding cuts affecting school standards, that is because, as things stand, there isn’t any.

She was equally clear that this is not the case in Further Education and sixth forms, which, for reasons I’m only now beginning to understand, are funded at lower levels than schools, even though the tasks they face are no less difficult, and in some ways more complex. Schools, she says, have spent a lot of money on teaching assistants, and there is no good evidence that this is effective, a point to which I’ll return in a moment. She might have added that secondary schools have large and very expensive management teams, partly because headteachers are now, in effect, inspectors in their own schools.

A Conservative member of the committee, Sir Geoffrey Clifton-Brown, got to the heart of the issue with this question:

“What I am hearing from this whole exchange that we have been having is that your resources have been cut, inspections have been shortened, and the interval between inspections has been extended. Does that not give rise to a regime where the school can game the system by doing things like the Chair has suggested: having a narrower curriculum and not putting pupils in for the more challenging subjects? Isn’t that likely to give us a narrower and narrower education system?”

There is really no arguing with this. In 2005, Labour destroyed the HMI approach to school inspection by removing the independence of inspectors, downgrading them from the top of the professional tree to middle managers, stopping the inspection of subjects, and extending its remit to areas it knew little or nothing about. Inspectors no longer had time to do their work properly, and this situation has got worse rather than better. Take teaching assistants. Prior to 2005, inspectors had time to evaluate their work in classes, and, if they were teaching on their own, to observe them on the same terms as teachers. One assistant, whom I observed teaching reading for the normal 30 minutes, received a top grade and proceeded to train as a teacher. The school as a whole failed, by a large margin, but we were able to pick out and reward her excellence. I doubt whether any such observation has taken place since 2005, and indeed whether Ofsted has any reliable evidence on the effectiveness of assistants at all. If the evidence of their impact on pupils’ attainment is, as Ms Spielman says, “far from clear”, we should be able to look to Ofsted to clarify it.

It is not the fault of Spielman, or her predecessors, that we can’t.

One of them agreed with me when I suggested that they had “played the hand that they’d been dealt,” and, as Sir Geoffrey’s question indicates, that hand does not enable them to carry out their work properly. Since 2010, the government has made major, and for the most part essential, changes in education, while meeting Treasury targets. Cutting quality control at the same time prevented Ofsted from dealing with potential scandals before they broke, and reduced the quality of evidence available to parents. I continue to read reports, and their quality and basis in evidence is showing strong improvement, as in the brilliant report on Michaela Community School and the report on behaviour at Great Yarmouth, whose headteacher, Barry Smith, is to address the Conservative Education Society on Monday.

There is, though, no question that reports do not give anything like the detail they used to, and I don’t rely on one unless I can check it from other sources.

Spielman said at one point that, “Our inspections are now a review of the school’s own work. A school can show us its work however it likes.” It can also choose what not to show. I know of one school that is still rated good despite a note on its last report, some years ago, of a significant weakness in maths. Until this year’s examination reforms, that seat of learning also boosted its results by having teachers write GCSE assessments, a practice which a senior Ofsted official told me was so widespread that Ofsted could do nothing about it.

The special needs issue that I discussed in my previous article is mentioned in reports, but not investigated in any depth, because inspectors don’t have time to find out whether these pupils are making the progress they should be. The campaign on this issue, like that on funding during the last general election, is biting, and will cost votes.

All three of Michael Gove’s successors have served in George Osborne’s Treasury, and their main area of expertise has been finance rather than education. School inspection has become a casualty, and its fate shows how austerity has bitten into essential services as well as eliminating waste. As austerity comes to an end, the government needs to consider giving it the means to inspect schools – and Further Education – properly once again. It would not cost a huge amount, and I can think of at least one quango that could provide a good chunk of the money.

Howard Flight: The best part of a week on, we can see that last week’s Budget was a popular one

The Chancellor has been fortunate that the public finances have improved substantially at a particularly convenient time.

Lord Flight is Chairman of Flight & Partners Recovery Fund, and is a former Shadow Chief Secretary to the Treasury.

Philip Hammond has been fortunate that the public finances have improved substantially at a particularly convenient time. Economic growth has been revised up next year to 1.6 per cent; employment has been revised up, with 800,000 more jobs than forecast in 2023; wages will rise above inflation for the next five years.

The borrowing target has been met three years early, with the deficit now down to 1.9 per cent of GDP. The debt target has also been met three years early at a peak of 85 per cent of GDP. Borrowing is £11.6 billion lower than forecast at 1.2 per cent of GDP. This has improved significantly the scope of what the Budget can seek to address.

Overall public spending will increase by 1.2 per cent per annum, between 0.2 per cent and 0.4 per cent less than forecast growth. The improved tax yields have enabled the Prime Minister’s NHS commitment to be fully funded.

The Chancellor presented a pragmatic “micro” Budget, seeking to address virtually all of the issues which came up as needing attention. Yet perhaps its most important ingredient was a significant cut in taxation for the majority next April – increasing the personal allowance to £12,500 and the higher rate to £50,000 a year.

Local Authorities are getting an extra £1 billion of funding and business rates for retailers with rateable values below £51,000, will be cut by a third for two years. A further £1.7 billion each year will be provided to benefit working families on Universal Credit with the work allowance – the amount families can earn before losing credits – being increased by £1000 per annum.

A new two per cent digital services tax to insure that large digital firms pay a “fair share” of tax, is expected to raise £400 million per annum. Schools will get a further 400 million this year and defence will get a further £1 billion this year and next. There is also £160 million for counter-terror police. The national living wage will increase by nearly five per cent to £8.21. The national productivity investment fund will be increased to £37 billion and will be extended to 2024. Large roads will get £28.8 billion for 2020-25, and even potholes will get £420 million! PFI will be abolished, leaving a bill for £200 billion to be honoured.

There was a range of extra funding largely for small business – extending the annual investment allowance to £1 million; extending the start-up loans programme for 10,000 entrepreneurs; delivering the lowest corporation tax rate in the G20; keeping three million small businesses out of VAT; reducing the cost of taking on apprentices by halving the co-investment rate for non-levy payers; £121 million to support cutting-edge digital manufacturing; £78 million to fund electric motor innovations; £315 million in quantum technologies and £50 million for new Turing Fellowships.

Measures to help more people into home ownership include abolishing stamp duty retrospectively for first time buyers of all shared ownership properties of up to £500,000; an additional £500 million for the housing infrastructure fund; committing over £7.2 billion to a new help to buy equity loan scheme to support 110,000 new home buyers and the abolition of the housing revenue account cap controlling local authority borrowing for house building.

There are measures for those keen on the environment and more money for the Transforming Cities fund. Remarkably, the Chancellor has addressed virtually all the issues of concern to citizens and, as a result, I think, the best part of a week on, that this has proved to be a very popular Budget. The one important reform it has not addressed is the confiscatory rates of stamp duty on larger properties in London and the South East. This had led to a freezing up of the market – bad for revenues and for economic mobility.

George Freeman: There was much to cheer in the Budget. But now we need an inspiring programme for growth.

At the moment, we are treading water and appear to be relying on popular support for Brexit, and the threat of Corbyn, to keep us in office.

George Freeman MP is Chair of the Conservative Policy Forum and The Big Tent Ideas Festival, and is MP for Mid-Norfolk.

On Monday, the Chancellor announced that “austerity is coming to an end”. Politically, there was a lot to cheer in this Budget – some good news and headlines for struggling high streets, our crucial Universal Credit reform, NHS workers and the vast majority of constituents who rely on public services. Furthermore, there were many helpful retail pledges for colleagues in marginal seats. Given the Brexit divisions and infighting, we badly needed some good news.

But if we are going to end the biggest squeeze on disposable incomes since the war, the central question for our future is this: how can we get back to the 2.5-3 per cent growth that we enjoyed pre-Brexit? Before the EU Referendum, we were one of the fastest-growing economies in Europe and the G7. Now we’re one of the slowest-growing.

The Budget invites the public to judge us on different metrics – no longer on our commitment to balance the books (abandoned) or reduce the debt (still growing), but on our ability to “end austerity”. People will now need to feel tangible improvements and see how Brexit can be a catalyst for much higher growth and prosperity.

Because this Budget won’t be decided on the comment pages of broadsheets. It will be decided on the ground.  By parents chatting at the school gates. Families looking after their ageing relatives in care homes. Commuters stuck in traffic jams because the housing has come, but the infrastructure hasn’t. Or the millions standing on trains every morning who’ve shelled out £2,000 for a season ticket and feel ripped off.

I no longer advise the Prime Minister, but here’s what I’d say if I still did. We need to remind people that every public sector pound has to be earned before it is spent, and that we need a more inspiring programme of business-led growth to drive prosperity and opportunity.  This means some big changes.

First, accelerating our transition from a service economy to an innovation nation.  Innovation is key to our driving up productivity, prosperity, inward investment and exports. We won’t escape debt with growth at 1.5 per cent and low productivity.  We need a renaissance of enterprise and innovation.  Such buccaneers as James Dyson and Richard Branson have done more to transform this country’s prospects than any government department ever will.  We need to stop the business-bashing and promote entrepreneurship and innovation. While the UK is still a crucible of start-up entrepreneurship, the engine is not yet humming: we have too many start-ups that are never scaled up, too little of our innovation funded by the City and too little that is taken global by British companies. We need a new national mission. We must be the innovation nation.

Second, tangible access to new markets for our innovation.We can’t just do research.  We need to innovate, manufacture and trade.  If Brexit means anything, it surely means an opportunity to go global. But that can’t mean importing cheap food and cheap clothes from sweatshops. We need to be exporting our innovation. The UK should be using every tool possible to unlock access to the fastest emerging markets in Africa and Asia.

For 40 years our whole economy has been geared to our being a European services economy. Why don’t we make Brexit the moment to embrace a new global strategy for higher growth through exporting technology and innovation into emerging markets? If the opportunity is properly seized, we could use our Industrial Strategy and public sector innovation to make Britain a crucible of new technology scale up and financing through the City.

We could then use our aid budget and global soft power in emerging markets to grow our exports and trade links with the fastest growing economies. Why don’t we offer some of the fastest emerging countries where we have a strong historic links a deeper Aid, Trade and Security Development Partnership?

Third, harnessing the public sector as a test bed of innovation. We’ll never export our innovation if we’re not using it ourselves. Innovation can’t be just about making a lucky few in the City rich beyond their wildest dreams. In order for us to be a test bed for new technology, we need to put enterprise and innovation at the heart of the public sector.  If we want to lead the world in digital health, we won’t do it unless the NHS is already a pioneer. You can have as many digital health clusters in Shoreditch as you like. But if the NHS isn’t testing and buying it, we will never become the innovation nation we need to be. Building, financing and growing these little start-ups into serious businesses of scale. The problem of the austerity era was thinking that our problems could be solved by cutting things. Actually, the only way our problems can be solved is by growing things.

Fourth, empowering local leaders to innovate more. Innovation can’t be ordered from on high. It comes from people having the power to make decisions themselves. That’s why we need to embrace bolder economic localism. Let’s remember that our national economic performance is made up of hundreds of local economies, all of which need to be growing faster. Another five years of ever-tighter spending controls from the Treasury risks undermining local growth and innovation.  Instead of delaying essential local infrastructure holding our growth hubs back, why not let them raise infrastructure bonds in the international capital markets and embrace bold ideas like integrated track and train mutuals which invests users money into better services?

Fifth, a new model of Treasury incentives. Too often, Whitehall’s funding orthodoxy rewards failure.  If you deliver more for less in the public sector we give you…less!   And give more to those failing.  If you ran a business like that it would be bust.  And depressing to work in. It’s no wonder that public sector leaders are so dispirited.  Many are leaving.  We need them to stay.  So why don’t we send a signal to encourage them, be bold and embrace a new model of incentives-based funding which rewards successful local service leaders for delivering efficiency and productivity? We need a new approach based on a radical idea: if an area reduces the deficit quicker than Whitehall’s average we should let them keep 50 per cent of the savings to re-invest.  Why not the same on growth? If councils grow their tax base, why not let them keep 50 per cent for local services?

Our choice as a nation is clear. Do we timidly manage our decline? Or do we set out a bold plan a brighter future? At the moment we are treading water and appear to be relying on popular support for Brexit, and the threat of Jeremy Corbyn, to keep us in office.

For a majority of voters, keeping Corbyn out and delivering Brexit are not good enough answers.  We need to show voters that this is the path to something more inspiring.  We need to start setting out a bold vision for Conservatism in the twenty-first century.

Brexit was the elephant in the room as Philip Hammond presented his Budget

Fiscal activism underpinned by a resilient and sound economy was the main message of this Budget. In recent months it became clear the budget deficit had turned the corner and was on a credible improving trend. The Chancellor has taken advantage of this not to pay down debt and achieve a balanced budget sooner, but […]

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Fiscal activism underpinned by a resilient and sound economy was the main message of this Budget. In recent months it became clear the budget deficit had turned the corner and was on a credible improving trend. The Chancellor has taken advantage of this not to pay down debt and achieve a balanced budget sooner, but rather opt for what he called a balanced approach to the public finances. This means spending more, not raising net taxes and instead allowing the budget deficit to persist, albeit at low levels. This fiscal year the budget deficit is 1.2% of GDP and is projected to be 0.8% by 2023/24.

Despite this, the Budget was trying to be all things to all people, and heavily interventionist, with 86 new tax and spending measures.

The Budget confirmed a sizeable net £103.5 billion fiscal boost over the six fiscal years from 2018/19 to 2023/24. Of this, £98.5 billion was increased spending, the vast bulk being the previously announced boost to NHS spending. For four of the six fiscal years, net tax cuts were announced, and these will be particularly large next year at £4.2 billion, led by an increase in personal tax allowances.

The Chancellor stressed a “Double Deal Dividend” but was unable – probably because of the ongoing negotiations – to focus on saying whether there will be any Brexit Dividend. Brexit was the elephant in the room. Of course, it is not just Brexit, but what you do when you leave the EU that is key and that will help deliver this dividend.

I agree with the idea of a Deal Dividend in that once there is clarity about what lies ahead then this will trigger a rebound in investment. Uncertainty over the last two years is likely to have dented or delayed investment plans. The Double Deal, as the Chancellor called it, is that he is keeping back some fiscal fire power in case he needed to act and boost demand in the event of a No Deal. But it is the Brexit Dividend – including how to spend domestically the sizeable sums we send to the EU, as well as delivering a pro-growth economic agenda – that is key.

The economy has suffered from a lack of demand. But it also needs a supply side agenda too and the Chancellor was right to acknowledge this. Given this, the economic and fiscal numbers were credible.

The good news is that the budget numbers are on an improving trend. As long as the market believes the projections are credible, and borrowing rates stay low, then the current economic environment provides a powerful dynamic in which the budget deficit can fall further, as it did post-war when public debt plummeted from 240 per cent of GDP. Last year’s debt of 85.2 per cent of GDP was a peacetime high and is projected today to fall to 74.1% by 2022/23.

This Budget was partially aimed at showing austerity is over. The trouble is, there is no clear definition of this, but you tend to know it when you see it. For many, it will mean an end of the squeeze on departmental budgets – and we will have to wait until next year’s Comprehensive Spending Review to see what will happen, particularly to the previously non-ring-fenced areas.

While I am an advocate of fiscal activism, the reality is that the UK needs to save in good times to be able to spend in bad. It did not do this and the financial crisis blew the fiscal numbers off course. Not only did austerity restrain demand at a time when the economy needed it, but also the government then missed the opportunity to borrow at record low rates to fund necessary infrastructure. Now, one could argue tax cuts should be high on the agenda, hence it is welcome that personal tax allowances were raised from next year.

Ending austerity should not mean unlimited public spending. There clearly needs to be ongoing reform, including regional wage policies. Ending austerity should not mean keeping taxes high to fund spending. It also does not mean sacrificing capital spending to fund current expenditure. Thankfully the Budget showed both a desire to avoid further tax hikes, an aim for cuts and to protect capital spending plans.

It is important to appreciate that the margin of error on these one year ahead fiscal numbers is huge. Thus, we should resist the temptation to aggregate forecast changes over the next five years, as it makes little sense to do so. The key is: what happens to growth?

The trouble is the UK’S economic picture is one of low growth, low inflation and, presumably, low interest rates. The UK’s trend rate of growth has previously been revised down since the global financial crisis. At this Budget the growth forecast was tweaked lower by the independent Office for Budget Responsibility (OBR), to 1.3%, and higher from 1.3% to 1.6% for next, and averaging around 1.5% up to 2023.

This leaves the UK vulnerable to any global setback. Vital is what happens to productivity growth and this would be boosted by increased investment and innovation – and it is helpful there were incentives to try and boost these. I would not be surprised if UK growth in 2019 is higher than expected: as consumption could be boosted by rising wages, higher employment and the announcement of an increase in personal allowances from next spring, while a Brexit deal would likely boost investment.

The most striking aspect is that the OBR projects a further 800,000 jobs by 2023, bringing to 4.2 million the net new jobs since 2010. This puts to shame Project Fear’s misplaced projection of massive job losses in the wake of a vote to leave.

Previously I have described the EU as like the Titanic. Despite warnings of impending problems and the need to reform, it will not change direction and we are lucky to be jumping ship. The trouble is, after a Budget like this, and with a Chequers Deal pending, the UK is in danger of becoming like the Marie Celeste – in touch of the new world, it is being left to drift with no-one at the helm. One hopes that once a credible deal is agreed the sense of direction will be clearer.

What about a no deal? Clearly we want to avoid a no deal, but a valid question is that the implied threat on the eve of the Budget that if there was no deal then the Chancellor would have to take action to make Britain universally competitive – including cutting taxes and easing the regulatory burden on firms, as well as to use fiscal policy to provide support to the economy – was a bizarre one. It must surely have been aimed at our EU neighbours, to encourage them to reach a deal.

But one wonders why this is couched in a threat and should it not be the focus of policy now – deal or no deal? Of course, the Chancellor is constrained from pushing this, while the negotiations are ongoing, but it should highlight that the UK should be in a better position once it can determine its own post-Brexit destiny. Of course, this makes it vital we do not box ourselves in with a Chequers-style deal and instead edge towards a free trade agreement like Canada Plus.

Photocredit: UK Parliament/Jessica Taylor

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