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  1. Wealth
September 19, 2011

Early intervention by private funding can save billions, report says

By Spear's

Early intervention can significantly reduce the economic cost of some of the UK’s most difficult social problems, currently £100 billion a year, a report published by Barclay’s Wealth has found

Early intervention can significantly reduce the economic cost of some of the UK’s most difficult social problems, currently £100 billion a year, a report published by Barclay’s Wealth has found. The report, produced in co-operation with consultancy New Philanthropy Capital, added that private funders are often better placed than government to tackle the root causes of social problems through preventative programmes.

The report focussed on three of the most costly social problems in the UK and measured their economic impact, including the cost of necessary social, health, prison and probationary services, benefit payments and lost workforce productivity. It found that children with conduct problems cost the public purse £51 billion a year, and adults out of work due to mental health problems and chaotic families cost £45 billion and £12 billion respectively.

By funding early interventions into these social problems, significant savings can be made, the authors argued. For instance, dealing with just one child with serious behavioural problems can cost £148,000 by the time they reach 16. However, supporting the same child via intensive family support, counselling in schools and Multi Systemic therapy would cost £32,000 over the same period.

Similarly, special support offered to employees with mental health issues before they leave work can deliver savings of up to £2.50 for every £1 invested. Annual savings of around £40,000 a year, and sometimes up to £130,000 a year, can be made through early intervention in problematic and chaotic families.

According to Emma Turner, director of Client Philanthropy at Barclay’s Wealth, this economic approach to analysing social problems allows funders to understand the value of tackling some of these problems, especially when they don’t always have emotive appeal.

‘It is clear that these three issues are proving a significant burden to the welfare state, from an economic as well as a social point of view. However, these issues don’t necessarily elicit the most generous response from private funders. The more light that is shone on these types of social issues and the impact of interventions — such as those highlighted in this research — the more chance there is of private funding being made available to help,’ she says.

The report argued that private funders — especially those adopting a strategic approach to their giving, with an appetite for risk and a willingness to support projects with long-term benefits, labelled in the report as ‘change makers’ — are often excellently placed to intervene in these projects. While governments often respond to problems only once they reach crisis point, private funders are more able to take a long-term view and fund innovative, early intervention or prevention projects.

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The reports findings were based on research conducted by New Philanthropy Capital between February and June 2011, which involved surveying 100 experts, conducting literature reviews and reviewing government data.

by Sophie McBain

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