Iain Duncan Smith – 2013 Speech to the Wave Trust

Below is the text of the speech made Iain Duncan Smith, the Secretary of State for Work and Penions, to the Wave Trust in London on 25th April 2013.

Introduction

It is a pleasure to be here today, in support for the Wave Trust’s 70/30 campaign, and I’d like to thank George for inviting me.

I have long been a supporter of Wave’s work and philosophy…

… and this latest aim – to drive a 70% reduction in child abuse, neglect and domestic violence in the UK by 2030 – exemplifies your dedication, ambition, and drive to make a real difference.

The difference that could be achieved in terms of improving children’s chances and transforming lives is enormous.

For thanks to your research, and that of other pioneers in the field, we now understand how strongly a person’s earliest experiences shape their later life.

Compelling evidence shows that what happens inside the family, when a child is very young indeed, strongly determines how they will interact with people… how ready they will be to learn… ultimately, where they will end up in life…

… for better, or indeed, for worse.

Early years

In a country as wealthy as ours, it is an injustice that so many children are trapped in disadvantage from an early age.

Whilst some children thrive despite growing up in difficult circumstances, all too often, the mark left by this experience lasts a lifetime… confining individuals to the margins of society because of where they have started out in life.

By as young as 4 years old, there is already an attainment gap of a fifth between disadvantaged children and their more affluent peers.

From the back of the classroom, it is a slippery slope to truancy, to school exclusion, from there to a life of benefits, and in extreme cases, gangs and crime.

More than half of young offenders were permanently excluded from school…

… and two in every five prisoners report having witnessed violence in the home as a child.

Early intervention

This is a bleak future, and we must end it.

Yet for too long, our social policy has been based on maintaining social problems rather than preventing them… allowing disadvantage to become entrenched.

As a result, we have paid out ever increasing amounts in welfare, social programmes and care… whilst feeling the social costs at the same time.

Take the fact that 120,000 of Britain’s most troubled families cost the state £75,000 in special interventions each year… £9 billion annually overall, of which £8 billion is estimated to be spent reactively – on visits to A&E, police call outs, prison services, and more.

£8 billion spent picking up the pieces of social breakdown, but doing little to transform the families’ dysfunctional lives.

Social Justice

That’s a policy of late intervention and it has to change – for it’s not only a drain on public funds, but also a tragic waste of human potential.

Across the UK, despite the number of workless households having fallen by 240,000 since 2010, there are still 3.7 million households – around 1 in 6 – where no-one works…

… meaning over 1.8 million children living in a workless household.

Especially in tough economic times, every pound we spend must bring about the positive, sustainable outcomes that people so badly need.

Instead of a maintenance approach, this government is determined that early intervention should be a defining principle in how we tackle social problems…

… central to our strategy delivering social justice…

…breaking the cycle of disadvantage…

… and transforming the lives of those most in need.

Just today, we published our Social Justice Progress Report, which shows how far we’ve come over the last year in putting this principle into practice.

Early years

As the Wave Trust has long advocated, we are starting with the family…

… taking action in the earliest stages of a child’s development, and helping parents in order to give their infants a better start in life.

Whether it be in terms of health, where we are training an additional 4,200 health visitors and doubling the number of Family Nurse Partnerships to 13,000 by 2015…

… education, where we are extending free early education to the most disadvantaged two-year-olds…

… or families, where we are investing £30 million in support to build strong, resilient relationships …

…through all this, the government are steering the focus and the spending towards areas which we know can make a real difference to improving children’s life chances.

Cross-party consensus

What’s more, even across party lines, there is a growing consensus around the vital importance of children’s formative years.

This was one of our priorities on coming into government, and led to the commissioning of a series of reports, including Frank Field’s report on poverty and life chances, and two reports from Graham Allen that focused on early intervention…

… aimed at developing cross-party agreement on what needed to be done in this space.

But there us someone else in the House of Commons who has done a huge amount over the years to advance this cause, and that is Andrea Leadsom.

Andrea was chairman of OXPIP – the Oxford Parent Infant Project – and a founding trustee of NORPIP in Northampton…

… and is now championing the roll-out of a national network of PIPs, offering therapeutic support across the country to help mothers and babies develop a strong and loving attachment.

She has also played a vital role in establishing the first All Party Parliamentary Group on Early Intervention, which had its inaugural meeting just last week.

With a cross-party manifesto to follow, focussing on the importance of conception to two…

… all this will help to establish a resolute commitment to children’s early years, now and under governments to come.

Government spending

This is a historic shift in how we deliver services for the most vulnerable…

… replacing reactive policies, and a short-term focus on politicians’ pet projects, with a meaningful, sustained approach that will pay dividends further down the line.

Yet alongside this shift from a maintenance approach to a transformational one… we must also achieve a shift in how government funds its interventions.

We have to reject the old tendency to lavish money on programmes in the hope that more money alone will solve the problem…

… and instead, we must open up a whole new dimension – one focussed solely on the return that money is achieving.

Every pound for life change.

Social investment

I believe that here too, we are starting to make real progress.

In particular, we are opening up new funding streams based on payment by results…

… where we pay for what works, reducing the risk on the taxpayer…

… and the money follows the outcome, meaning providers are only rewarded for the positive life change we want to see.

You may have heard of the Peterborough social investment bond, the first of its kind – where investors are funding charities to run rehabilitation programmes with prisoners.

If reoffending falls by 7.5%, the investors receive a financial return, paid for out of the reduced costs of social breakdown… whilst making a real difference to society at the same time.

Such is the success of Peterborough that we have now seen 13 social impact bonds spring up across the country, from Perth to the Midlands, Merseyside to London… making the UK a global leader in social investment.

In all cases, it is about saying to investors: ‘You can use your money to have a positive impact on society, and you can make a return.’

Huge potential

Our aim is to strengthen the UK’s position further still, by making it as easy as possible for the social investment market to develop.

One vital step has been the establishment of the Early Intervention Foundation, which launched on 15 April, with both huge cross-party support and the backing of leaders in the local and community sectors.

Let me say here this evening that we owe a debt to Graham Allen – a colleague and a friend, whose drive and dedication made this happen.

The Early Intervention Foundation will play a crucial role:

advocating early intervention over late reaction in tackling social problems amongst children and young people…

… rigorously assessing what works, to determine both the best early interventions available and their relative value for money…

… and independently advising local commissioners, providers and potential investors on the best evidence-based programmes, enabling them to make the best choices in how they support children and families.

The work of the Foundation will be aided by a government investment of £20 million in a new Social Outcomes Fund, with the aim of catalysing new social impact bonds and topping up their returns…

… specifically in complex areas such as children’s early years, where the yield is spread across different services – health, welfare, education, and so on.

A more cohesive society

Yet there is still more to do, capitalising on a predicted rise in demand for social investment to as much as £1 billion by 2016.

If we can get it right, I believe social investment has huge potential.

Clearly, it has the potential to greatly increase the amount of funding available for social programmes by bringing in private investment money on top of that provided by government or pure philanthropy alone.

But more than that – perhaps most importantly – I believe social investment could be a powerful tool for building a more cohesive society.

The gap between the top and bottom of society is in many cases larger than it has ever been.

We have a group of skilled professionals and wealth creators at the top of society who have little or no connection to those at the bottom.

Yet as George and others at Wave will tell you – in so many cases, what divides the two is little more than a different start in life.

I believe social investment gives us an opportunity to lock not just the wealth but also the skills of those at the top of society back into our most disadvantaged areas.

Imagine you create a social bond in a particular deprived neighbourhood. Investors buy into it and as with any investment, will want to see it flourish – taking an interest in that community where they would otherwise be totally detached.

At the same time, these wealth creators can have a dramatic effect on the communities themselves – taking the city to the inner city…

… and showing those at the bottom that they have an opportunity to turn their own lives around and move up the social ladder.

Conclusion

For too long, our failure to make each pound count has cost us.

Not only in terms of a financial cost – higher taxes, inflated welfare bills and lower productivity, as people are trapped in dependency long-term.

But also the social cost of a fundamentally divided Britain – one in which children born just streets away from each other, are left miles apart in terms their life chances and outcomes.

We can no longer afford to spend ever greater amounts on ineffective remedial policies.

Instead, by investing in the early years – harnessing the expertise of our early intervention community and the power of social investment – we can make a transformative difference.

Setting children on the path to a productive and independent life beyond the state…

… restoring hope, aspiration and belief to communities who have been left behind…

… laying the future foundations for a cohesive and successful society.