Preventative spending aims to turn the tide as cash is targeted at tackling problems at their source

In THE jargon, John Swinney sought to head upstream yesterday in an effort to deal with the massive budgetary challenge he is facing over the coming years.

He is hoping to turn the flood of cash being spent on families who cannot look after their children, offenders who end up going back to a life of crime, and on elderly and sick people who wind up in hospital when they would prefer to be at home, into more of a stream – by tackling their problems at source.

Mr Swinney’s announcement, to put so-called “preventative spending” at the heart of the Scottish Government’s work, starting with a £500 million investment over three years, is a response to a raft of reports and statistics calling for such action over the last few years.

Think-tanks, public sector leaders and analysts have all warned recently that the system as it stands is heading for the rocks. This is only partly due to the squeeze on public spending. It is also due to the relentless rise in demand for services.

Taking health, one report by the National Endowment for Science, Technology and the Arts recently concluded that in 15 years time, thanks to the country’s ageing profile, the cost of looking after people with long-term problems will be up by £4 billion. The Scottish Council for Voluntary Organisations has graphically noted how Scotland will soon have to start building care homes at the same rate as China builds power stations. Add in the consequences of family breakdown and the circle of reoffending, and evidence has shown that around 45 per cent of all public sector spending is on “failure demand” – or money reacting to social problems.

The hope is that by spending money preventing or at least ameliorating all this, big savings can be made. A report by the parliament’s finance committee last year noted the benefits of so-called “spending to save”; it heard that for every £1 spent on work to support children between the ages of 0-3, savings of up to £14 could be made later. In the care of the elderly, the hope is better housing and social care at home can help cut the £1.4bn annual sum spent in Scotland on treating them in A&E units. Similar work dealing with newly released offenders has also been proven to cut crime by substantial sums, again reducing the long-term costs.

The difficulty for ministers is that all these efforts require up-front spending and do not hold out the promise of immediate success. It may be years before it can be ascertained whether the money has been well-spent..

Mr Swinney was therefore congratulated by leaders in the field last night for having found scarce cash to do this. But voluntary sector leaders were warning of a more immediate difficulty. They fear, once out of the spotlight, Scotland’s public sector chiefs will still shovel much-needed cash intended for long-term preventative work into solving short-term problems, especially at a time when the pressure is on.

Mr Swinney will therefore need to keep a beady eye on his mandarins and health leaders to ensure that his good intentions turn into reality.