Economic benefits of early years support


New research into the financial impact of effective early years support for children in Scotland shows it could save the public purse up to £131 million a year in the medium term.

A wide range of international studies have already shown the substantial benefits of effective early intervention for children, mainly from pre-birth to the age of eight.

This Scottish Government study builds on that research by looking specifically at the benefits in Scotland – in the short, medium and long term – for children with no additional needs, children with moderate additional needs and children with severe additional needs.

The key findings were:

* The short term savings from investing in early years services and support from pre-birth to aged five could be up to £37,400 a year per child in the most severe cases – children who have complex health and social care needs, and approximately £5,100 a year for a child with moderate health and social care needs.
* The potential medium term savings, if interventions from pre-birth to eight are 100 per cent effective, could be up to £131 million a year across Scotland, while in the long term, failure to effectively intervene to address the complex needs of a child in early life could result in a nine fold increase in costs to the public purse.
* A package of effective early years support to reduce the frequency and type of services demanded by children with the most severe needs could have a significant impact on improving outcomes for them and reducing long term costs to the public purse. If earlier, effective support could be given to a child with the most severe needs, resulting in a 10 per cent reduction in the total amount paid out to cover services later in life, this could result in a potential savings of around £94,000 for each individual.

Cabinet Secretary for Education and Lifelong learning, Michael Russell, said:

“There is a comprehensive range of evidence which shows that the early years are crucial to a child’s health, development and life opportunities. By providing the right support in those early years we can help reduce the risk of poor health, poor educational outcomes and poor employment opportunities for the most disadvantaged children. International evidence has also shown that investing a pound during those early years can save the public purse between three and seven pounds later on.

“This new Scottish Government study highlights the potential short, medium and long term savings here in Scotland of effective early intervention and estimates that the medium term savings could be up to £131 million a year, while failure to intervene effectively during those early years could cost nine times more to the public purse in the longer term.

“Across Scotland there is already a great deal of good work underway to improve outcomes in the early years. However, as I said at the Children’s Summit in June, we need to continue to build on and accelerate that work given the benefits this will have for children and society as a whole. This study will help add to the range of evidence which already exists on the importance of and benefits of early intervention so that service providers can consider this when planning for the future.”

John Swinney, Cabinet Secretary for Finance and Sustainable Growth, said:

“This study follows extensive work the Scottish Government and COSLA have been jointly carrying out in relation to developing support for early years. This study presents an opportunity to build on this joint work and, more generally, on the strong partnership that now exists between national and local government in Scotland.

“I hope that other key members of Community Planning Partnerships will also find the report of use in terms of considering future budget priorities.”

In conducting this study, the approach taken by Scottish Government researchers was to construct hypothetical pathways for three cohorts of children.

The first pathway provides the baseline and represents a child who receives a package of standard universal services and has no additional needs. The second pathway represents a child who has moderate additional needs. The third pathway represents a child who has severe additional needs.

For the purposes of the study, the numbers of looked after children in the community were a proxy for the size of the modest needs group of children, while the number of looked after children in residential and secure care provided the proxy for those with severe additional needs.

The model examines hypothetical, but realistic, life journeys for the two additional needs groups during the short term – from birth to five years – and during their full lifetime, and calculates the estimated additional costs to the public purse for these two groups in comparison with children with no additional needs.