The Treasury should focus on preventing UK government spending, the report says
The Treasury must rethink government spending to focus on preventing Britain’s health, crime and homelessness problems, following cuts of up to 78% under the Tories, a report by Demos and the Health Foundation has found.
It said that prevention spending should be distributed and protected, just as capital spending was from the 1990s, so that departments are better able to sustain their budgets with long-term benefits.
They cited funding for preventative children’s services, which has fallen by 78% since 2010, which could reduce benefits spending, crime and homelessness in the long term. They also highlighted a 28% decline in per capita public health funding since 2015.
Demos and the Health Foundation, a charity dedicated to public health, said their plan Revising the Ministry of Finance’s rules – to ensure that prevention expenditure is identified – would ensure better long-term social and economic outcomes.
“Mission-driven governance is a core part of Labour’s strategy and so is embedding prevention into policymaking to ensure measurable, sustainable results,” said Polly Curtis, Demos’s chief executive. “We are calling on ministers to rewire the Treasury to ensure they embed prevention into policymaking to drive cultural change in public services and decision-making processes.”
In the report Counting What Matters: How to Classify, Account and Tracking Spending for Prevention, they recommend a new tracking system for prevention spending, which could be governed by its own rulebook.
The paper said one reason this had not been done before was the challenge of defining prevention spending. A recent conclusion from the Institute for Government states that there is no “neat definition of prevention – we don’t think there is. There is no obvious objective way to distinguish between acute and preventive services, policies and programs.”
However, Demos and the Health Foundation believe that there is a way to distribute prevention spending by defining it as “related to activities or investments that increase the resilience of individuals and communities and lead to the avoidance (or reduction) of the risk) of negative outcomes” .
“For example, in the field of healthcare, prevention would consist of spending healthy lives and avoiding diseases. In the case of homelessness, prevention would be linked to the provision of safe and stable housing. In children’s services, this would improve education and employment outcomes and prevent homelessness, crime or other negative consequences.”
They said prevention department spending limits could sit alongside revenue and capital expenditure limits, which they said would help focus resources on activities that reduce future demand for acute or reactive services, ultimately saving costs.
They highlighted that health care prevention spending was already measured through the Office for National Statistics and could be duplicated for other areas.
Wes Streeting, the Health Secretary, has already made it a priority in his overall plans for the NHS to shift the focus from emergency spending to prevention spending.
“There is increasing evidence that prevention is more effective than cure. However, government policy is often characterized by cuts in prevention spending and increasing pressure from backlogs within the system,” said Anita Charlesworth, co-chair of the Health Foundation’s Productivity Committee.
“Next year’s Spending Review is the opportunity to rewrite the rulebook on prevention spending and for the Government to align incentives with their long-term ambition to build a fairer Britain, where everyone lives well for longer. ”
At a recent Treasury committee hearing, the chairman of the new Office for Value for Money, David Goldstone, was pressed about whether he would focus on longer-term preventive spending, such as improving mental health care, which could take up to a decade to see results.
The new official said he would look at immediate value for money and longer-term reform of the systems. He also indicated he would look at the financial impact of poor service delivery, stressing that there are “longer-term consequences of service shortfalls on benefits, the criminal justice system and a range of other areas”.
Goldstone hinted he could look at providing services for looked after children and whether current services provide value for money and benefit to society.
The issue was raised by John Glen, former Principal Secretary to the Treasury, who said the problem of huge spending on looked after children without delivering good outcomes for those children or wider society.
A Treasury spokesperson said: “The Chancellor has made clear that the spending review will anchor a mission-driven and reform-oriented approach to government, with a greater emphasis on prevention in the delivery of public services and where every pound of government spending will deliver on the priorities . of working people as part of our Plan for Change.”