The problems with putting a price on child outcomes

Laura Jones, contributor to the online London Review of Books published a blog entry on the 29th of July 2011 entitled "Good for the Poor, Good for Goldman Sachs" that critically examined the messages put forward by the Allen Review, Field Report, as well as the Tickell and Munro Review. Her blog reads:

"Graham Allen, the Labour MP for Nottingham North, was commissioned by the coalition government last year to review the benefits of ‘early intervention’. In his first report, published in January, he found that many damaging and costly social problems can be averted or reduced by giving families the right support during a child’s first three years. It’s a persuasive argument, which has also been made in other recent reviews commissioned by the government from Frank Field, Clare Tickell and Eileen Munro.

The big question though is how to fund early intervention services when the government is committed to spending cuts. Field thinks the answer is to give people parenting courses instead of benefits. Allen’s second report, published earlier this month, sets out a way to pay for early intervention programmes by attracting extra funding from non-government sources. Private investors would be given tax breaks, to be paid for by the money saved as a result of early intervention: from children not being in care; from young people not being in the criminal justice system or on benefits.

The approach depends on being able to attach a price to an outcome, and on being able to link an early intervention programme to the achievement of that outcome many years later. Most of the time, the outcome will be negative – not being a teenage parent, a drug addict or a violent offender – which makes it hard to measure. Allen’s plan also depends on there being no additional demand on resources, so that ‘late intervention’ services can be decommissioned to generate the savings needed to pay back investors:
If social services no longer have to deal with family X, they would need to be able to pull that resource away rather than redeploy that resource to another family lower down the priority list.

Allen’s review team have spoken to a number of potential investors, both corporate and individual. One of them said: ‘Tax relief or tax incentives would encourage me to make an investment.’ It all seems oddly convoluted, and makes you wonder if it wouldn’t be simpler – as well as more reliable, and more just – to make them pay for early intervention programmes through taxation. Though such a naive proposal would surely never get the endorsement of someone like the chairman of Goldman Sachs Asset Management, who says in Allen’s review that he has been ‘delighted to help support the thinking around these concepts’.

Good to know that when a Labour MP is asked to come up with a plan for improving the lives of the neediest he takes the time to make sure it will help the rich get richer too."

Link to the original blog entry on the London Review of Books: Laura Jones, "Good for the Poor, Good for Goldman Sachs", 29th July 2011