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Short term cuts make long term holes

11th January 2013

Photo: Kriss Szkurlatowski,

There is a lot less money around at the moment, so what little there is needs to be spent wisely. One of the easiest options is to make cuts to preventative services for people who aren’t in the system… yet.

This may be a quick win for the government, but they’re in danger of leaving a much bigger hole than anyone seems to realise. Cuts to support services may provide a small saving in the short term but, long term, the figures just don’t add up.

Take one of Gateway’s recent clients. Sarah* was referred to Gateway when she became pregnant. Given her troubled background, and the lifestyle that she was leading at the time, it was expected that her new baby would have to be taken into care.

For nine months, during and after her pregnancy, a Pregnancy Outreach Worker helped Sarah to access help from a variety of sources. Homeless, with one child already in care, Sarah needed practical and emotional support. Her POW listened without judging, made it easier for her to attend her appointments, and helped her understand what was happening at case conferences.

We helped Sarah apply for crisis loans to get her through the pregnancy and first few months after the birth. She underwent anger management counselling and drug counselling. We helped her to find local authority housing.

Eventually, after a lot of hard work by both Sarah and her POW, she was able to show that she could provide stability and proper care for her own child. And so, when the baby was born, social services came to the decision that mother and baby would be better off staying together.

I’m not telling you this story in the hope of warming your heart. I’m telling you because:

  • The approximate cost of taking a child into care for 9 months is £28,000
  • The approximate cost of the combined preventative services that Sarah accessed over 9 months is £6,000

Preventative services have saved our economy over £20,000. And that’s just for one child.

This theory works across all services, not just for Gateway POWs. Fall prevention, for example – everything from installing grab rails to making little lifestyle changes so that someone uses the stairs less – minimises the chance of someone having a fall. The estimated cost for the first time a person falls is about £40,000, but that £40,000 could pay for fall prevention staff to go into around 200 homes. Yes, that’s £40,000 per person vs £200 per person.

Often there is a perception of voluntary/third sector organisations as “do-gooders”, but we’re not just in this to be nice. Of course there is a moral, emotional, argument that says “people need to be helped”, but there’s also a compelling economic argument: people who are better supported, who are cared-for before their issues escalate into crises, simply don’t cost as much.


*names have been changed

Sources for figures:
Average cost of child in foster care: The Schools and Families Committee – 2008/9. £774 per week, so 9 months = £27,864. Costs of support services are estimated; based on Gateway FS’s POWs service, which is costed at £20 per hour. First falls costs: Birmingham Local Authority Strategic Shift to Prevention 2012.

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  1. alun severn

    Hi Vicki, A great post and a fascinating example of the difficult situation social enterprises find themselves in at the moment.

    On the hand, they need to find ways of capturing and demonstrating ‘social value’ so that they can compete under the terms of the Public Services (Social Value) Act 2012. (Or, to put this slightly differently, they need to find ways of ‘formalising’ and measuring the social value that many SEs have for a long time expected people to take on good faith….)

    And yet, on the other hand – and probably for the foreseeable future – the snippets of information that public purchasers will pay attention to are the kind of hard-nosed cash saving demonstrated in the scenario above.

    I think GFS demonstrates that in some situations and for some scenarios this can be done.

    I think more SEs need to build themselves a little stockpile of similar cost-benefit analyses about specific aspects of their services, ready for whenever they are challenged to demonstrate a saving to the public purse.

    It isn’t always easy to construct such comparisons and maybe SEs need to buy-in the time and/or expertise do it. If so, it would be money well spent.

  2. Katherine Hewitt

    Heavily funding preventative measures needs to be a vital part of government strategy but yet again we’re seeing the bulk of money going to reactive measures. So treating the problem once it’s occurred. I was at a meeting the other week (that will remain nameless) and noted out of a multi million pound budget less than 5% was going to be spent on preventative work.