Counting What Matters: How to classify, account and track spending for prevention

Over the past two years Demos has been making the case for a fundamental shift in the purpose of government away from firefighting in public services towards preventing problems arriving. First, we set out the case for The Preventative State, to rebuild local, social and civic foundations; then, jointly with The Health Foundation, we made the case to change treasury rules to ringfence funding for prevention. By differentiating between everyday spending, and preventative spending, the government could measure what really matters.

There has been widespread support for this – but also concerns about both the feasibility of measuring preventative spending accurately and appropriately but also that ring-fencing alone may not lead to the desired improvements in outcomes and value for money.

This paper explores the challenge of measurement and makes a series of recommendations, including the passage of a “Public Investment Act”, to show how this could be appropriately achieved.

A second forthcoming paper will look at how to shift the culture of public bodies to think ‘prevention first’ and target spending at activities which are value for money and improve outcomes.