David Goodhart is Head of Demography, Immigration & Integration at Policy Exchange. He is the author of Head Hand Heart: The Struggle for Dignity and Status in the 21st Century (2020).
Reducing the demand for government comes in many forms. Perhaps the best cost-saving investment any country can make is in its culture and institutions. A national culture which is high-trust, conscientious and collaborative will outperform one with higher public spending but more internal friction.
Stronger institutions can also save money. Consider the family. It often does efficiently and for free what the state does clumsily and expensively. Weaker families—and we have the weakest of any comparable country in Europe—means a bigger state and higher social spending.
But a warning: any savings from a higher proportion of well-functioning families will only slow the rise in spending on health and welfare. If you add together all the social spending relating to peoples’ health and welfare the public care economy accounts for more than half of all public spending – £500 billion-plus – and, including private services, more than one-third of the whole economy.
This is a huge transformation and is on an upward trajectory because once on the care economy escalator we are compelled to spend a rising proportion of public and private budgets on care. This is driven by three factors: longevity, technology and expectations.
As recently as 1967, one third of men died before they reached pension age: that number is now just 18 per cent, and the average number of years in retirement has risen from 13 to 19. Medical advances keep people alive for longer and keep people alive with severe impairments who would not have lived at all or died young.
We also have different expectations of what we think a civilized society is. We expect disabled people to be supported to live independently and, in many cases, to work. In 1992/3 just 600,000 people of working age were in receipt of a disability benefit, the figure just before the pandemic was 2.3 million = contributing to total disability spending of £20 billion.
Mental illness and depression is the major cause of recent increases. Everyone will have their own view of the causes and most peoples’ lists will include social media. But the greater fragility of families should be high on the list.
As the Institute For Fiscal Studies wrote last year in a paper on Families and Inequalities: “A notable hallmark of British families is their greater fragility and complexity as compared with families in other Western European countries. More children are born into lone mother families and there are higher rates of parental separation. 44 per cent of children born at the beginning of this century had not lived with both their biological parents throughout their childhoods.” About 16 per cent of children are born to parents who are not living together and around 25 per cent of all children are now living in single parent households.
If we have rising generations of less securely attached children, as the dissident feminist Mary Harrington has pointed out, it is probably no coincidence that today’s students yearn for safe spaces. And young people in general, especially young girls, are reporting sharp rises in mental fragility.
It was recently estimated by the Relationship Foundation that family breakdown costs the state around £51 billion a year. Almost all couples are worse off after a split and make disproportionate demands on the welfare system. More than half of lone parents receive housing benefit compared with less than 10 per cent of couple parents. There are other direct costs such as children in care, then the indirect costs of poorer health on the NHS and worse behaviour on the criminal justice system (70 per cent of young offenders are from broken homes).
There are also the harder to calculate extra costs of rising mental illness, in both adults and children, arising from family breakdown and the loss of family support for the elderly from having fewer intact families capable of providing it.
So investing in a real family policy is a worthwhile commitment of political capital. But in recent years family policy has been, for different reasons, a black hole for both main parties. The Conservatives fear saying anything that makes them seem unmodern, and Labour is dominated by an old school feminism that sees female professional success outside the home as the main measure of family policy progress.
That leaves a weak cross-party consensus around expanding subsidised childcare, essentially making it easier for both parents to spend less time in the family providing care. We do need better childcare provision, yet a minority of parents use paid-for childcare: the median spend on childcare for children under five in the UK is zero. And there is plenty of evidence that long periods of formal childcare between 0 and 3 does not provide the emotionally stable start that most children need.
The family as an institution remains largely invisible to the state and the tax system, ever since the individual taxation of husbands and wives removed the extra tax allowance for families with children. Moreover, the state is determinedly neutral when it comes to family structure. A recent speech by Bridget Phillipson, Shadow Education Secretary, repeated the mantra that anyone who wants to promote a traditional family form is stigmatising single parents.
This is, fortunately, no longer the case, and public policy agnosticism is giving way to more official acceptance of the evidence for much better outcomes on average for children from stable two parent families. Two recent Government reports, the CRED report on disparities led by Tony Sewell and the last report by the Children’s Commissioner, Rachel de Souza, both made this point explicitly.
Strengthening a sense of family obligation and making it easier for couples to come together and remain together, especially through the high stress years of young children and maximum work pressures, means leaning against some of the most powerful forces in contemporary culture, forces that promote short-term gratification.
Not everything costs money. Politicians can contribute to shifting norms in what they talk about and the evidence they point to about families (and leading by example should not be required). Some things cost very little. Why is free partnership counselling not offered to struggling lower income couples via GPs or the benefit system?
The tax and benefit system is currently remarkably family unfriendly. The UK is an international outlier in not having a substantial tax allowance for couples raising children and child benefit has also become significantly more restricted in recent years. A report last year for Policy Exchange found that families with young children in the UK pay significantly more in income tax than comparable families in countries like Germany and France. Single parent benefits could be withdrawn more gradually to reduce the so-called couple penalty.
Measures to make it more affordable for one parent, usually but not always the mother, to stay at home for more of the time when children are pre-school, or at least to work less outside the home, would also contribute substantially to lowering stress and is popular among young mothers. The simple act of paying childcare subsidies direct to parents, as in Canada, therefore allowing a choice of keeping care in the family, or buying it from outside, would make a big difference without adding to state spending, as would the ability to front-end child benefit.
Other measures that might require some extra spending in the short-term to promote less spending in the longer run include encouraging more families to continue caring for elderly relatives, with appropriate social care back-up, via subsidies for granny flat conversions and encouraging fathers to contribute more to raising children, in the era of the double bread-winner couple, with longer paternity leave.
Strengthening family life requires a cultural shift for which there are no simple policy levers, but the prize is improved well-being and savings of tens of billions. Saving on that bill for family failure requires some investment in family success.
David Goodhart is Head of Demography, Immigration & Integration at Policy Exchange. He is the author of Head Hand Heart: The Struggle for Dignity and Status in the 21st Century (2020).
Reducing the demand for government comes in many forms. Perhaps the best cost-saving investment any country can make is in its culture and institutions. A national culture which is high-trust, conscientious and collaborative will outperform one with higher public spending but more internal friction.
Stronger institutions can also save money. Consider the family. It often does efficiently and for free what the state does clumsily and expensively. Weaker families—and we have the weakest of any comparable country in Europe—means a bigger state and higher social spending.
But a warning: any savings from a higher proportion of well-functioning families will only slow the rise in spending on health and welfare. If you add together all the social spending relating to peoples’ health and welfare the public care economy accounts for more than half of all public spending – £500 billion-plus – and, including private services, more than one-third of the whole economy.
This is a huge transformation and is on an upward trajectory because once on the care economy escalator we are compelled to spend a rising proportion of public and private budgets on care. This is driven by three factors: longevity, technology and expectations.
As recently as 1967, one third of men died before they reached pension age: that number is now just 18 per cent, and the average number of years in retirement has risen from 13 to 19. Medical advances keep people alive for longer and keep people alive with severe impairments who would not have lived at all or died young.
We also have different expectations of what we think a civilized society is. We expect disabled people to be supported to live independently and, in many cases, to work. In 1992/3 just 600,000 people of working age were in receipt of a disability benefit, the figure just before the pandemic was 2.3 million = contributing to total disability spending of £20 billion.
Mental illness and depression is the major cause of recent increases. Everyone will have their own view of the causes and most peoples’ lists will include social media. But the greater fragility of families should be high on the list.
As the Institute For Fiscal Studies wrote last year in a paper on Families and Inequalities: “A notable hallmark of British families is their greater fragility and complexity as compared with families in other Western European countries. More children are born into lone mother families and there are higher rates of parental separation. 44 per cent of children born at the beginning of this century had not lived with both their biological parents throughout their childhoods.” About 16 per cent of children are born to parents who are not living together and around 25 per cent of all children are now living in single parent households.
If we have rising generations of less securely attached children, as the dissident feminist Mary Harrington has pointed out, it is probably no coincidence that today’s students yearn for safe spaces. And young people in general, especially young girls, are reporting sharp rises in mental fragility.
It was recently estimated by the Relationship Foundation that family breakdown costs the state around £51 billion a year. Almost all couples are worse off after a split and make disproportionate demands on the welfare system. More than half of lone parents receive housing benefit compared with less than 10 per cent of couple parents. There are other direct costs such as children in care, then the indirect costs of poorer health on the NHS and worse behaviour on the criminal justice system (70 per cent of young offenders are from broken homes).
There are also the harder to calculate extra costs of rising mental illness, in both adults and children, arising from family breakdown and the loss of family support for the elderly from having fewer intact families capable of providing it.
So investing in a real family policy is a worthwhile commitment of political capital. But in recent years family policy has been, for different reasons, a black hole for both main parties. The Conservatives fear saying anything that makes them seem unmodern, and Labour is dominated by an old school feminism that sees female professional success outside the home as the main measure of family policy progress.
That leaves a weak cross-party consensus around expanding subsidised childcare, essentially making it easier for both parents to spend less time in the family providing care. We do need better childcare provision, yet a minority of parents use paid-for childcare: the median spend on childcare for children under five in the UK is zero. And there is plenty of evidence that long periods of formal childcare between 0 and 3 does not provide the emotionally stable start that most children need.
The family as an institution remains largely invisible to the state and the tax system, ever since the individual taxation of husbands and wives removed the extra tax allowance for families with children. Moreover, the state is determinedly neutral when it comes to family structure. A recent speech by Bridget Phillipson, Shadow Education Secretary, repeated the mantra that anyone who wants to promote a traditional family form is stigmatising single parents.
This is, fortunately, no longer the case, and public policy agnosticism is giving way to more official acceptance of the evidence for much better outcomes on average for children from stable two parent families. Two recent Government reports, the CRED report on disparities led by Tony Sewell and the last report by the Children’s Commissioner, Rachel de Souza, both made this point explicitly.
Strengthening a sense of family obligation and making it easier for couples to come together and remain together, especially through the high stress years of young children and maximum work pressures, means leaning against some of the most powerful forces in contemporary culture, forces that promote short-term gratification.
Not everything costs money. Politicians can contribute to shifting norms in what they talk about and the evidence they point to about families (and leading by example should not be required). Some things cost very little. Why is free partnership counselling not offered to struggling lower income couples via GPs or the benefit system?
The tax and benefit system is currently remarkably family unfriendly. The UK is an international outlier in not having a substantial tax allowance for couples raising children and child benefit has also become significantly more restricted in recent years. A report last year for Policy Exchange found that families with young children in the UK pay significantly more in income tax than comparable families in countries like Germany and France. Single parent benefits could be withdrawn more gradually to reduce the so-called couple penalty.
Measures to make it more affordable for one parent, usually but not always the mother, to stay at home for more of the time when children are pre-school, or at least to work less outside the home, would also contribute substantially to lowering stress and is popular among young mothers. The simple act of paying childcare subsidies direct to parents, as in Canada, therefore allowing a choice of keeping care in the family, or buying it from outside, would make a big difference without adding to state spending, as would the ability to front-end child benefit.
Other measures that might require some extra spending in the short-term to promote less spending in the longer run include encouraging more families to continue caring for elderly relatives, with appropriate social care back-up, via subsidies for granny flat conversions and encouraging fathers to contribute more to raising children, in the era of the double bread-winner couple, with longer paternity leave.
Strengthening family life requires a cultural shift for which there are no simple policy levers, but the prize is improved well-being and savings of tens of billions. Saving on that bill for family failure requires some investment in family success.