Wherever in the world you look, whether the objective is less crime, better education or more confident child protection, politicians and policy makers are asking the same plain question, the leading US cost-benefit analyst told a UK children’s services conference today. How do we introduce effective programs without breaking the bank?

Steve Aos from the Washington Institute of Public Policy was telling a cross-section of the Birmingham UK children’s services workforce how his home state’s legislature was succeeding in transforming the stark reality of the argument that money talks loudest the world over into adventurous, effective prevention strategies.

Aos’s work rests on evidence that prevention programs can produce better educational outcomes, less substance misuse and better mental health. He has also considered prevention’s potential for reducing crime and developmental disabilities.

He explained how his analysis always began with a systematic review of the evidence. In assessing the impact of early childhood education on child outcomes, for example, he examined every rigorous evaluation in the US since 1965, in the process identifying improvements of around five per cent in graduation rates and in the proportion of children repeating grades. He found that it also reduced the call on special educational services by four per cent, and the proportion getting criminal convictions before their thirtieth birthday from 24 to 17 per cent.

By this reckoning early education was a wise investment. In Washington state, the provision cost $7,709 per child. The return – in terms of tax revenue from higher earnings, the reduced amount of compensation paid to the victims of crime and smaller demands on services – was $19,469, the equivalent of $2.53 for every dollar invested.

Aos also illustrated the concept of investing-to-save in relation to Nurse Family Partnership (NFP), one of a number of proven models being implemented in Birmingham. For the small population of parents who could benefit from NFP the costs were high – over $10,000 per child. But at $25,000 a child the returns were just as impressive, he said, again reflecting greater economic contributions and lower levels of long-term dependency.

The US prison system provided another illustration. Incarceration rates had risen threefold in the US in the last 30 years. More than ten in every 1,000 US 18-49 year olds was locked up. That rate was five times higher than in the UK, whose own prison population was among the largest in Europe.

As more prisons were built, the crime rate had decreased, he said. In Washington state it was down by 20 per cent since 1980 when the surge in jail building began. But the cost to the taxpayer had been enormous. Investment in criminal justice had risen by 80%. So it was not simply a matter of knowing how to reduce crime but how to reduce it in the most effective way

His Institute undertook a series of systematic reviews, looking at nearly 600 rigorous evaluations. He then considered the economics of each option for the taxpayer and for the victim of crime. Finally he modeled the impact on the state budget of the current portfolio of services, of one moderately altered and of one aggressively reworked.

He found that all the options, the continued building of prison cells included, brought the state some cost benefits. But stopping prison building and including new prevention programs in the portfolio brought better returns. Using the standard calculations of Wall Street brokers, the return on investment increased from 24 to 28 per cent when prevention programs were added.

In the fully integrated system of children’s services in England, Birmingham is able to influence most budgets – but not prison building. So Aos offered the city some more general messages as it embarked on its prevention strategy.

“However much we might like an idea”, he warned, “it’s worth bearing in mind that some things work and some don’t. And some things that appear to have attractive economics, for example because they are inexpensive, in the long run may turn out to be very expensive.

“In this context it is worth spreading the risk. Think of a portfolio of investments. Don’t put all your eggs in one basket. That way if one of your well thought out ideas doesn’t pay off, your good bets will still produce good returns, both for children and for the taxpayer.

“And finally,” he said, “don’t overlook the importance of good implementation. Too many people think that the job is done when the portfolio is formed. But that’s the moment the job starts. If you don’t buy the share, or in our case if you don’t implement the programs with fidelity, then guess what? You don’t get much back on your investment.”