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The rules of the game: Why does government struggle to invest in a preventative approach?


3 Jul 2018

Tom McBride reflects on the importance of and challenges facing long-term ‘invest to save’ spending within government – nationally and locally – prompted by new recommendations from the Mental Health Policy Commission.

This week saw the launch of Investing in a Resilient Generation, the report of the Mental Health Policy Commission based at the University of Birmingham. The commission’s focus on tackling mental health problems through a much greater emphasis on preventative services in childhood and adolescence is very welcome. Here at EIF, our mission is to ensure that effective evidence-based services are available to all children and young people at risk of experiencing poor outcomes, and it is always great to hear others championing the need to act early in order to avoid social, financial and economic costs in the future.

Perhaps one of the least eye-catching but most important issues raised in the report is the need to change the rules of the game when it comes to how government spending operates in relation to prevention services. This might sound like a highly technocratic issue, but it will require serious attention if, as a country, we are going to start to make significant improvements in outcomes for children and young people.

Anyone who has spent time in or around central and local government will recognise the challenge: governments – like people – are not good at investing for the future. We all know we should be saving more for our pension, say, or fixing the roof before it starts leaking, but there are also lots of important things for us to spend our money on now. Government works in a similar way. Of course it makes long-term investments, such as raising future productivity through investing in education. But government knows full well that it could do more, and that there are financial savings and economic benefits to be had from supporting children to avoid poor life outcomes.

Prioritising future potential over important short-term issues can be hard to justify, especially in a constrained fiscal environment. Over the long term, improving adult mental health is likely to lead to reductions in spending on social security benefits, as adults suffering with mental health problems are more likely to have periods off work. But benefit payments are administered by the Department for Work and Pensions, and there are few incentives for other parts of government to take steps to reduce future benefit spending by investing in preventative mental health provision. Furthermore, even if this lack of incentives can be overcome, current deficit and borrowing targets make it very difficult to make investment cases which require ongoing revenue spending, rather than one-off capital spending, without serious political backing.

At a local level, the reasons why more is not being spent on preventive services are many and complex, but include:

  • Constrained public spending: inevitably, as local authorities face real-terms cuts in spending they prioritise statutory services over discretionary services such as early help and prevention.
  • Long-term nature of benefits: We can all agree that reducing the incidence and severity of mental health issues is a good thing in itself, and one which will lead to significant future benefits in terms of reduced health care spending and increased productivity. But these benefits will accrue over decades, when local authorities and other agencies are facing budget constraints right now.
  • Who these benefits accrue to: Improving adult mental health provides wide-ranging benefits for a diversity of people and bodies, including:
    • individuals, in terms of better wellbeing and better employment outcomes
    • health and social care services, in terms of reduced demand for services
    • the social security system, in terms of reduced benefit expenditure
    • the exchequer, in terms of greater tax receipts; and
    • future generations, in terms of the many benefits of improved parenting.

But this means that many of the agencies that would be responsible for delivering preventative services, such as local authorities and schools, see little of the long-term benefits.

The significance of these challenges is borne out by our own research, in which we asked early intervention leaders and decision-makers from across the country to identify the greatest barriers to increasing the level of effective early intervention that is available. Early intervention being outranked by higher priorities, not being a statutory requirement, the benefits accruing too far into the future, and benefits accruing elsewhere in the system all appear in the top five, along with the short-term costs being too high.

In their report, the Birmingham commission has suggested some interesting ideas to address the lack of incentives within the system to invest in prevention services, including front-loading some of the expenditure in the forthcoming spending review into prevention, on the basis that this will bring down spending on ‘late action’ later in the period. But there may be still bigger questions that need to be addressed. In the week that we celebrate the NHS’s 70th birthday, many commentators – including Sir Amyas Morse and Paul Johnson – are questioning the adequacy of future funding plans to meet rising demand, and calling for greater consideration of how we fund and deliver healthcare. Our view is that this debate needs to be extended to how we fund services for children and families, and how we can create a system which incentivises all parts of government to invest in preventative services to improve long-term outcomes for generations to come.