Preventative Services and Austerity: Who Pays and Who Will Pay the Price?

For the previous 3 years I've been increasingly involved in work around the development of Social Impact Bonds (SIBs) in the UK. I've attached a short introductory article I wrote for the professional journal 'Shared Service Architect' for those who may be less familiar with the concept of SIBs.

I am currently actively involved in the development of 2 SIBs, one seeking to create stronger pathways to employment for young people in Kent and another examining early preventative services to reduce risk of child abuse and neglect in Greater Manchester. Other SIBs themes I've worked on include the reduction of hospital admissions for the elderly resulting from falls, preventions of severe mental health disorders in children and adolescents, childhood obesity and reducing the social and personal impact of mental health disorders in military veterans.

Admittedly these are a wide range of social issues but all share common issue: they are either preventable or able to have their impact significantly reduced by means of targeted preventative interventions.

In a time when governments at all administrative levels are as hard pressed within a working generation, simply cutting services is not an option.

The private sector will not simply step in and the demand will not subside if a service is discontinued. The potential wider social impacts of failing to provide assistance to the vulnerable will be felt by all: quality of life, the economy and our physical and natural environments will be hit as a result.

The logic of investing in prevention however appears either lost, too difficult or impossible to fund. SIBs by seeking private investment and providing a return (dividend) based on cashable savings provides a real opportunity to both shift the behaviours of government commissioners and, at the same time, freeing up new funding opportunities.

However, SIBs are slow to materialise. The ‘hump’ as a colleague from the Cabinet Office described it, appears to be not one resulting from lack of finance or mechanisms, but one of culture.

How well equipped are our public servants and politicians to feel empowered to both:

• Be bold and invest in early prevention rather than react to crises?

• Think like private sector investors and understand that risk is part of the process of innovation?

The public purse is under huge pressure there will come a time within the next 2 years according to CIPFA* when we can cut no longer. Creative government may wish to look at the opportunities social investment can bring, but in order to do so needs to undergo a significant cultural and skills shift.

*Chartered Institute of Public Finance and Accountancy