LSE report on value-for-money in well-being
New report from LSE Centre for Economic Performance seeks to improve well-being and reduce misery by noting the cost-effectiveness of different government policies.
Every year, governments of whichever hue spend billions of pounds on our behalf. Money goes to health and schools and infrastructure, to public bodies and initiatives aimed at the public good. This of course, includes a range of policies related to social care. But do we get value for money?
Photo by Sydney Sims
The authors of a new report from the LSE Centre for Economic Performance have sought to answer this question by comparing the benefit delivered to people by a given policy relative to its net cost to government. This benefit/cost ratio, they argue, is the key single number that the government should use when makes spending decisions – so this is a very timely report as Parliament resumes work this week.
In doing so, they provide a figure for the value of psychological therapy for those suffering from addiction or various mental health disorders, and quantify the benefits of mental health support teams in schools. They also calculate the benefit of raising the state pension age to 68.
Now, many would object to this approach, saying we should provide services on the basis of need. The suggestion from this report is that this kind of analysis can help us better target limited resources, and so be more effective in meeting those needs.
- Read the LSE report: Value for money: How to improve well-being and reduce misery
The report, supported by the Economic and Social Research Council, measures benefits in terms of the monetary equivalent of the impact of a given policy in improving well-being, with the costs including an allowance for savings in subsequent years.
Chapter 2 looks at mental health and employment, where the authors find that NHS Talking Therapies pays for itself within two years, in terms of government budget.
They then go into some detail on the value of psychological therapy for addiction and severe mental illness, providing individual statistics for alcohol dependence, hard drugs dependence, gambling, personality disorder (both anti-social and borderline), psychosis, bipolar disorder and anxiety/depression. Again, for each condition the conclusion is that there is negative net cost to government in the first two years. What’s more, a further analysis shows that for an average young person treated by mental health support teams (MHSTs) in schools the cumulative cost-savings outweigh the costs within two years.
However, the authors find that employment support for mentally ill people is less effective. While support for those with moderate cases of mental illness pays for itself within five years, benefits for those with more severe cases are only slightly above costs, which the authors note is ‘a relatively low ratio when compared to other policy choices.’ Even so, it posits that there is good reason to make special consideration here, and suggests that tackling inactivity could also help in many cases.
Chapter 3 covers schooling and apprenticeships, where the benefit to cost ratio comes out highly in favour of relationships, sex and health education (RSHE) at secondary school but does not find significant effects from smaller class sizes.
In Chapter 7, the authors address the state pension age, which – having ploughed through the numbers – they are in favour of raising to 68. Other areas of policy addressed include housing, policing, road and rail.
In closing, the authors note the link between household income and enhanced well-being, which they link to economic growth. ‘This report does little more than put a toe into the water,’ they conclude. ‘But we hope it helps to stimulate a major rush of similar analysis as the basis for the coming 3-year Spending Review.’
In related news:
Preparation is the key to success, or to ensure children’s safety
45% of disabled victims are dissatisfied with police response
