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The Imperative of Social Return on Investment Measure

The Imperative of Social Return on Investment Measure

Like countless others, I firmly believe in the balance of negatives and positives. Despite the myriad challenges and uncertainties facing our world, it’s crucial to recognize the significant and transformative shifts taking place in society. These changes offer ample reasons for optimism and hope for humanity’s future.

However, if we aspire to build a sustainable society grounded in these positive changes, adopting a fresh perspective on public service investment is imperative. We must prioritise proactive measures aimed at fostering well-being development. This necessitates the establishment of robust social value metrics to guide our investments and ensure they align with our collective goals for a thriving and equitable society.

Creating Societal Change for Well-Being Development

The UK government and other OECD countries have faced pressure to enhance public sector performance while restraining expenditure growth. Challenges such as an ageing population and rising healthcare and pension costs contribute to budgetary strains, prompting citizens to demand greater accountability for taxpayer funds.

Various strategies have been attempted to reform institutional structures, including increased devolution and decentralisation and efforts to introduce results-oriented budget and management approaches. However, none have succeeded in establishing a sustainable service delivery model thus far.

Despite recent announcements of substantial funding for the public sector, the gap between service capacity and population needs continues to widen at a pace surpassing resource allocation and capacity development efforts.

To address this challenge, stakeholders, including government, national bodies, regulators, and commentators, advocate for enhanced collaboration and engagement with charities, voluntary community, and social enterprises (VCSE) partnerships. These partnerships aim to shift service delivery from crisis response to an early intervention, preventative model, ultimately reducing demand for public services over time.

Many recognise this shift as critical to improving health, well-being, and care outcomes and achieving a more sustainable service delivery model across public sectors. The COVID-19 pandemic has underscored communities’ resilience and individuals’ willingness to support one another.

During the pandemic’s onset, 750,000 people in the UK registered as NHS volunteers within two days, while numerous volunteer initiatives emerged to assist vulnerable neighbours with essential tasks. Additionally, thousands of local mutual aid groups have formed, and millions have joined local support networks on social media platforms, demonstrating the power of community solidarity and collective action.

We Do Have Great And Strong Communities

While the surge in volunteering during the pandemic was remarkable, it merely underscores our society’s generosity. Annually, over £45 billion is donated to support more than 200,000 charity and voluntary sector organizations, employing nearly 900,000 people. Furthermore, the invaluable contributions of 6.8 million unpaid carers yield health and social care cost savings exceeding £130 billion, while not-for-profit social enterprises contribute over £60 billion to the UK economy.

However, to fully capitalize on the potential for social and economic recovery and address pressing issues such as poverty (£78 billion), criminal activity (£100 billion), drug and alcohol abuse (£36 billion), and mental health (over £120 billion), among others, UK society must establish more robust business cases and success metrics. These measures should foster the growth of place-making initiatives and asset-based community developments.

Effecting systemic change requires deviating from siloed service delivery structures and commissioning models. Instead, we must embrace alternative approaches that prioritise collective well-being and transition toward early intervention and preventative service delivery models.

Poverty As An Example

In November 2019, Devon County Council’s Children’s Scrutiny Committee reviewed a comprehensive Children’s Services Self-Assessment report, providing an updated assessment of the needs of children and families in Devon. The report revealed that 14% of the local authority’s children lived in poverty before factoring in housing costs, which increased to 25% after housing costs were considered.

Additionally, the report noted that over 10% of children are entitled to free school meals, and approximately 41,000 households in the county are grappling with fuel poverty. Following the meeting, Councillor Hannaford commented on the report.

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.

Despite years of emphasis from government, public sector entities, academia, and specialists on the importance of prevention over cure and the calls for proactive measures, the current situation persists. While these efforts have led to some fundamental steps forward, significant challenges remain.

  • Child Poverty Act 2010 – “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 2014-17 – “restating the Government’s commitment to tackle poverty at its source – 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 the 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 rises, as has been recently highlighted by the Resolution Foundation following a 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 in the Perspective of Public Health Investment

In 2013, Donald Hirsch’s studies conducted by Donald Hirsch from the Centre for Research in Social Policy at Loughborough University 2013 shed light on the social and economic implications of poverty among Devon’s 37,483 children. Alarmingly, these findings revealed an annual cost exceeding £400 million, translating to an average burden of over £1,000 per household in Devon.

Building upon this research, the Joseph Roundtree Foundation (JRF) further investigated the consequences of poverty in their 2016 report, ‘Counting the Cost of UK Poverty.’ Their analysis uncovered staggering figures, indicating a total public service expenditure of £69 billion across the UK. Moreover, the study revealed additional costs stemming from child and adult poverty, amounting to £6 billion and £2.7 billion, respectively, making the total a staggering £78 billion.”

And when these costs are mapped across service delivery themes:

  • 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).

Notably, the public sector is often perceived today as an unsustainable expense. Yet, our nation grapples with persistently high poverty levels, resulting in significant avoidable costs across various public services.

Studies consistently underscore that effectively addressing poverty demands concerted efforts from specialised resources working collaboratively rather than in isolated silos to achieve and sustain positive long-term outcomes.

Recognising this, we acknowledge the invaluable role that local communities, charities, and VCSE sector service providers play. They offer valuable insights into local needs and are proven innovators in developing and delivering sustainable, community-driven solutions.

Devon has articulated a strategic plan for addressing poverty and inequality, emphasising the importance of coordination and promoting services that enhance resilience, self-reliance, and independence. The critical question now centres on how implementing this strategy will catalyse the transformative change needed.

Social Return On Investment Measures To Transform Thinking And Better Help Secure Investment

It’s crucial to recognise that while poverty significantly impacts community well-being, it represents the surface of a broader array of determinants affecting well-being needs across the UK.

Since 2017, I’ve been dedicated to developing social and economic metrics to shift the narrative from viewing public services as unaffordable to recognizing the substantial social and economic gains achievable through more strategic funding and investment.

This shift is driven not only by the understanding that the current crisis-oriented model of public service delivery is unsustainable but also by firsthand experiences of the detrimental effects on quality of life. We must acknowledge the shared struggles of millions who face challenges in accessing necessary care and support, which is unacceptable and unimaginable given the missed opportunities for improvement.

My work involves a comprehensive review of academic studies and research to quantify the social and economic impacts of various social issues beyond poverty. This data provides valuable context to understand the broader implications of well-being needs, as outlined in reports like the Joint Strategic Needs Assessment (JSNA). By examining issues such as mental health support, homelessness, truancy, anti-social behaviour, and criminal activity, we can estimate the significant £2 billion loss in social and economic opportunity in Devon alone.

Expanding our perspective to recognize that these challenges are not unique to Devon but are mirrored across the UK, the total lost opportunity value escalates exponentially, potentially exceeding £500 billion nationwide. Now, more than ever, we must acknowledge the economic challenges of the past decade, compounded by the new hurdles presented by the pandemic.

Investing in public and community services requires a measurable, positive outcome that reverses the current decline in society’s health and well-being needs.

About This Work

My enduring goal is to foster a shift towards comprehensive measures of societal well-being that move beyond the sole reliance on Gross Domestic Product (GDP). This current approach overlooks critical factors such as environmental sustainability, human capital, inequality, and the invaluable contributions of the unpaid economy. These include the millions of individuals engaged in not-for-profit activities, as highlighted earlier in this article.

In addition to advancing the refinement of well-being datasets, I am committed to broadening their scope to encompass sustainability considerations, such as ecological impacts, community wealth building, and regenerative economics. Ideally, this expansion would build upon existing frameworks and initiatives, such as the government’s TOMS (Themes Outcomes and Measures) and proposals like the New Economics Foundation’s dashboard of five indicators or the Doughnut Economics approach. However, significant challenges remain in effectively measuring social and environmental value.

If you are interested in this endeavour and would like to learn more or explore potential collaboration opportunities, I encourage you to contact me at info@eculturesolutions.org. Together, we can work towards a more holistic and sustainable approach to societal development.

About the Author

Paul White is a founder of eCulture Solutions (www.eculturesolutions.org) and a passionate exponent of social enterprise and the opportunity to leverage digital innovation and technology to deliver sustainable, social, economic, and ecological change and better address the development of individual, family, and community well-being.

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