The Treasury needs to rethink public spending to focus on prevention of the UK’s health, crime and homelessness problems after cuts of up to 78% under the Tories, a report from Demos and the Health Foundation has found.
It said prevention spending should be carved out and protected just like capital spending was from the 1990s onwards so that departments are better able to preserve budgets with long term benefits.
They cited funding for preventive children’s services, which has dropped by 78% since 2010, that can in the long run reduce benefit, crime and homelessness spending. They also highlighted a 28% drop in public health funding per capita since 2015.
Demos and the Health Foundation, a charity committed to public health, said their plan to overhaul Treasury rules – making sure prevention spending was identified – would ensure better long-term societal and economic outcomes.
“Mission-driven government is a core part of Labour’s strategy and so is embedding prevention into policymaking to ensure measurable, lasting outcomes,” said Polly Curtis, the chief executive of Demos. “We are calling on ministers to rewire the Treasury to make sure they are embedding prevention into policymaking to drive cultural change across public services and decision-making processes.”
In the report, Counting What Matters: How to Classify, Account and Track Spending for Prevention, they recommended a new tracking system for prevention spending that could be governed by its own rulebook.
The paper said that one reason this had not been done before was the challenge of defining prevention spending. A recent conclusion from the Institute for Government said there was not a “neat definition of prevention – we do not think there is one. There is not an obvious objective way of distinguishing between acute and preventative services, policies and programmes.”
However, Demos and the Health Foundation believe there is a way of carving out spending on prevention, defining it as “being related to activities or investments that increase the resilience of individuals and communities and lead to avoidance (or reduced risk) of negative outcomes”.
“For example, in health, prevention would be [spending on] healthy lives and avoidance of illness. In homelessness, prevention would be linked to providing secure and stable housing. In children services, it would be improving educational and employment outcomes and avoiding homelessness, crime or other negative outcomes.”
They said prevention departmental expenditure limits could sit alongside revenue and capital spending limits, which they believe would help focus resources on activities that reduce future demand for acute or reactive services, ultimately saving costs.
They highlighted that spending on prevention in health 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 to shift focus from emergency spending to prevention spending in his overall plans for the NHS.
“There is growing evidence that prevention is more efficient than cure. However, public policy is often marked by cuts to prevention spending and increasing pressures from backlogs within the system,” Anita Charlesworth, the co-chair of the productivity commission at the the Health Foundation, said.
“Next year’s spending review is the opportunity to rewrite the rulebook on prevention spending and for the government to align the incentives with their long-term ambition to build a fairer Britain, where everyone lives well for longer.”
In a recent Treasury committee hearing, the chair of the new Office for Value for Money, David Goldstone, was pressed on whether he would focus on longer term preventive spending such as improving mental health care that could take a decade to see results.
The new official said he would be looking at immediate value for money and longer term reform of systems. He also signalled he would look at the financial consequences of poor provision of services, highlighting that there are “longer term impacts of inadequacies in provision of services on benefits, the criminal justice system and all sorts of other areas”.
Goldstone hinted that he could look at provision of services for looked-after children and whether current services were providing value for money and benefits for society.
The issue was raised by John Glen, a former chief secretary to the Treasury, who mentioned the problem of spending on looked-after children being enormous without generating good results for those children or wider society.
A Treasury spokesperson said: “The chancellor has been clear that the spending review will embed a mission-led and reform-driven approach to government, with greater focus on prevention in public service delivery and with every single pound of government spending delivering on the priorities of working people as part of our Plan for Change.”
