I would like to thank Graham Allen, and his fellow reviewers George Hoskin and Michael Little, for their work in producing this first report on Early Intervention for the Government.
The Government will be responding formally to the Report in due course, and I am delighted that Graham will be presenting his report to my colleague Iain Duncan Smith, who is leading much of the Government’s work in this area.
I would also like to thank Graham personally for his long-standing interest in the area of early years investment.
It is absolutely clear, as the report confirms, that investment in the early years of life leads to huge economic, social and emotional benefits later on, both for individuals and for society as a whole. The report helpfully highlights the importance of what it calls ‘school-readiness’. The gaps that exists today in ‘school readiness’ mean that by the time they hang up their coats for their first day at school, children from different backgrounds are already on different tracks, already pointed to very different futures.
The Coalition Government has made a particular commitment to these critical, foundation years. This commitment can be seen in our additional investment in 15 hours a week of early years education for the poorest 2 year-olds in our society, on top of pre-school provision for all 3- and 4-year olds.
The foundation years are quite simply the foundation of a fairer, more socially mobile society. As a Government, we are committed to improving social mobility as the principal objective of our social policy. When inequalities are passed on from generation to generation, the divisions in society become fixed. That is when temporary inequality turns into permanent social segregation.
We also know as a Government that the investments we need to make now to create a fairer society will take many years to take effect. There is a time-lag, delay, that very often discourages the necessary investments.
This is an area where we need to think much more innovatively about the possibility of new funding mechanisms. And I know that Graham’s next report will look in more detail at the complex, vitally important area of financing social projects - another area where he has been a pioneer.
Next month, the Government will set out our plans in this area in some detail when we publish our Social Investment Strategy paper. But I want to take the opportunity today to say a little more about the Government’s thinking.
The Coalition is expanding our thinking on social finance. We are gladly building here on work undertaken by the previous Government. But we are determined to go further and faster, in terms of creating a genuine movement for social investment.
There are a wide range of proven social investments in areas such as early years investments - as today’s report points out - as well as work with repeat offenders, or intervening with problem families. And there is a huge opportunity to draw on the considerable pools of capital outside government to provide funding for many of these projects.
I do not want to understate the complexities in this area, many of which Graham and his team have already noted in their first report. How best to capture the economic returns from social investments, which are inevitably spread over different services, and often over very long time scales? What are the right institutional arrangements for managing both the projects themselves, and the investments?
But these difficulties, real though they are, should not blunt our ambition in this area. There is the potential to open up genuine new opportunities for social investments - and we must seize them.
There is already a successful project in Peterborough, financed by social capital, working with offenders to reduce rates of re-offending - saving money and transforming lives. It is early days, but the signs are encouraging.
The ten local authorities that make up Greater Manchester are working with the Government on the possibilities of a social investment for problem families, including schemes such as the family nurse partnership.
We know that intervening with families with multiple problems is expensive - in some cases, up to as much as £20,000 a year. But we also know that over the long term, the savings generated can be far greater. If we can help youngsters stay out of care, and out of trouble, and out of jail, the social and economic benefits are huge. The long-term savings from helping the families with the deepest problems far outweigh the upfront cost.
The challenge is to find creative ways to bridge the gap between the initial investment and the long-term returns. But right here, in the City of London, we have one of the most innovative financial services centres in the world. Social investment is an area where the expertise of the financial services industry could be usefully deployed.
The Coalition Government has said clearly that we need a new social contract between the financial services industry and broader society. Financial services do not exist in a social vacuum, indeed no single commercial sector can operate in isolation from the values of wider society. The financial institutions of the City have an important role to play, not only in rebalancing the economy, but also in rebalancing society in a fairer direction.
So, I want to see social investment move from the margins to the mainstream. That requires imagination and hard work on the part of government, local institutions and financiers. I can assure you today that the Coalition Government is willing to play our part.