A new investment to help the yoof of today. The Hug-a-Hoodie ISA.
You think I’m kidding don’t you. I’m not.
An independent report, commissioned by David Cameron and written by Graham Allen, Labour MP for Nottingham North, sets out a system of ‘payment by results’ for private firms who prevent children taking the wrong path. In a rare display of politician agreeing with one another,of cross-party consensus, the ideas are not only endorsed by the prime minister, and (unsurprisingly) but also by Ed Miliband. The report is describes as making “the economic, fiscal and moral case for switching public spending from dealing with the causes of social failure towards investing in programmes that prevent the failure in the first place”.
But the cross-party support is perhaps unsurprising, given that the main thrust of the report “Early Intervention: Smart Investment, Massive Savings” is to save the Government money, both now and in the future. Let me explain...
Children with untreated behavioural problems go on to cost the taxpayer an average £70,000 each by the time they reach 28, 10 times the cost of children without problems. It costs £220,000 to place a child in a secure children’s home and £59,000 a year, on average, to place a child in a young offender’s institution.
Now, the plan is to raise £200million from private and institutional investors to invest in social projects, that may (or may not) otherwise have been funded by the state to prevent these costs becoming payable in the future. You have to admit, it’s a smart move by the politicians- get someone else to pay now, so you don’t have to pay later. Genius.
The types of projects could include helping teenage mothers, young criminals (whether hooded or not) and in inspiring children from work-free families to break the cycle of failure.
Of course, so far, this isn’t looking like much of an investment opportunity for any private organisations who might be so inclined. However, there will be financial incentives to firms which succeed in steering children away from a future of crime and alcohol and drug abuse. Quite how this will be measured is as yet unclear.
Furthermore, the projects will generate profits by from helping problem families and thus reduce the cost of benefit claims and dealing with crime. Presumably the ‘profit’ the Government makes on not paying out will be returned to the firms.
But it’s not just socially-responsible firms who are expected to take over dealing with yoofs and hoodies. The report outlines proposals to involve the great British public by tempting some of the 20m ISA investors with an extra £200 ISA allowance if they open an “early intervention ISA”. In a bizarre ‘Prince and Pauper’ -esque move, the report also recommends that the Junior ISAs, in which families can build up savings for when a child reaches 18, could also be invested in these projects. Individuals would get a profit on their investments if, for example, children stay out of trouble, perform well at school and show evidence of empathy and emotional development. Current and proposed projects include teaching pregnant teenagers how to talk to and cuddle their babies.
Wealthy investors could also be offered early intervention investment bonds and the report recommends a series of tax breaks in the next budget to encourage people and companies to invest.
So what do you think? Is an extra £200 tax free enough to tempt you to invest in a Hug-a-Hoodie ISA? Or is the Government shirking its responsibility while hiding being a Big Society sign?