This blog is written by Cliff Prior, Chief Executive of Big Society Capital, and is the seventh in our “A Question of Growth” series. Over the next few weeks we will be posting a new piece every Tuesday and Thursday. You can read all of the previous blogs in this series here.
Working out what good our actions will achieve in the long run is highly speculative. The world is not linear. Plenty of good intentions prove to have bad consequences: biofuel planting that puts up food prices for the poor, medicines like thalidomide that have savage unintended effects, government targets that drive appalling behaviour like the ambulances waiting in the carpark to avoid triggering the 4 hour trolley wait.
The world is, in reality, a spider’s web of interlinked strands. Pull one in the direction you want, and plenty others get distorted out of place. Good growth is seen in hindsight. We used to quote Zhou Enlai saying about the French revolution, “it’s too early to tell” – and now we know he didn’t even mean that after all. Hindsight…
And that’s before all the challenges of turning “good” into any kind of economic answer – particularly when any benefits are dispersed over different areas, different Government departments or families and communities, cashable versus virtual savings, questions of attribution and contribution, the burden and complexity of data collection.
But despite the difficulties, good growth is sometimes overwhelmingly clear in its value. Mental health is one of the most compelling cases.
For some time, the Government has committed to a mantra of “No health without mental health”. Their economic case for this is powerful. Estimated annual costs for key conditions include: depression £7.5 billion, anxiety £8.9 billion, schizophrenia £6.7 billion. At each stage of the conditions, from positive promotion through early identification and intervention, there are solutions which can make huge savings to health and social care, and generate substantial gains – good growth – in greater employment and social contribution.
Going earlier in the journey of life, the Analysis of the Impact on Equality (AIE) gives estimates of net savings to the Exchequer from providing parent-training programmes to cohorts of children with conduct disorders. Many of the benefits from childhood interventions extend into adult life. Total gross savings over 25 years have been estimated at £9,288 per child and exceed the average cost of the intervention by a factor of around eight to one.
All good, all important. But the financial costs are only part of the story. A child of between 3 and 8 years showing antisocial behaviour costs £5960 a year. Part is on NHS and social services provision, but the lion’s share of the cost is on the family.
Premature mortality is a well-known phenomenon among people with severe mental health problems, with an average reduction in life expectancy of 15 years for women, 20 years for men, compared to the general population. That is worse than long term smoking. These are human costs, and human losses on an appalling scale.
People with untreated mental health problems stand much less chance of employment. Less chance to support a family. Less chance of living a good old age. Less chance of contributing to “good growth”.
So why are the preventative and early intervention approaches not used widely?
Cost is a glib answer. The cost of double running – prevention and care – is a more solid one. The quantum of intervention is another – you have to get to a substantial scale of benefit before you can close a hospital ward or clinic, and even then the closure may jeopardise the viability of the wider institution. Lack of trust that the benefits will really flow. The knowledge that there are thousands more people seeking help who are just below the severity of the people you are working with right now, so do you really make savings or “just” help improve lives?
One of the solutions to these problems is the model of social impact bonds. Investors put up funds to pay the running costs. The agencies delivering the services get paid by the investors. Commissioners commit to pay on results. It helps with the double running. It also commits the commissioners to follow through for a set period of time, allowing the service providers to focus on doing the job and improving their work.
Social impact bonds or SIBs are often seen as over complicated, expensive, clunky models. Meeting people from the charities and social enterprises who have delivered social impact bonds, I hear a very different story: the results are great, the process can be painful, but leaves the agency much stronger to deliver excellent results into the future.
For example, in Newcastle, Ways to Wellness is a Social Impact Bond which is supporting people with long term conditions, often accompanied by anxiety and depression, through social prescribing. In the model, the health commissioner only pays if individuals’ wellbeing improves and if secondary care use is reduced as a result of better self-management. This approach has enabled upfront investment in preventative support with the aim of avoiding acute care costs down the line.
The Fair Chance Fund uses a SIB model to support homeless, unemployed young people with the commissioner only paying for entry into and sustained education, employment and accommodation. Many of the young people in the programme suffer from mental health problems and the flexible approach of an outcomes contract has allowed the delivery bodies to provide personalised support for those young people, helping them overcome some of those problems and lead a better life. It’s investment for good growth.
Social impact Bonds can also help align funding from different sources for outcomes which fall in the gaps of departmental silos. For example, the Mental Health and Employment SIB in Haringey, Staffordshire and Tower Hamlets seeks to address the employment gap between those with mental health conditions and the wider population. The commissioners of the SIB only pay if job outcomes, including user engagement, are achieved. This outcome focused approach has allowed the providers to deliver Individual Placement Support (IPS) with both local funding as well as top up from central government for the employment outcomes delivered.
Of course SIBs are only one variety of outcomes based funds. And again, they try to convert human suffering – and loss of human contribution – into cash. But that doesn’t mean the human benefits are not there.
So think of the child with a mental health problem, and the life she or he will have if helped or left without help. Think of the family supporting that child, and the life they will have. Think of the future decades of contributing value and feeling esteem through a job, or the damage and cost of long term employment.
Good growth – sometimes you know it when you see it.
Cliff Prior is Chief Executive of Big Society Capital. He originally trained as a scientist and spent over a decade working in health with the NHS Modernisation Board, the Medicines Commission, the Healthcare Commission and others.