Early Intervention Revolution
By allocating £250 million from our Investing in Scotland’s Future Fund to an Early Intervention Revolution we have the chance to turn around the way government views the world. Through early intervention we will support positive, preventative work that generates good economic and social results rather than paying out for poor outcomes – crime, educational under-achievement, social injustice.
Most of our funding will go to early years work. A child from a poorer background is two years behind their richer classmates by the age of seven. They never catch up. Research has shown that early intervention with very young children can stop that gap developing. Interventions with children and their parents can transform their life chances.
Overall, spending a pound on early intervention can generate savings of between three and eleven pounds in the future. The details are in the Early Intervention Revolution plan.
There are new models of funding being pioneered around the UK. Outcome-dependent funding, sometimes using innovations such as social impact bonds, is one. Under this, a voluntary sector partner or social enterprise will take on a project and get rewarded for success. This payment could even be related to the savings to the public purse from their success.
We will use a minority part of our Early Intervention Revolution to support projects dealing with early intervention on alcohol, drugs, obesity and crime.
Overall, we estimate a public benefit of at least £2 billion from this investment but we are not banking any of that money in our manifesto costings. We want to use it to continue to support early intervention work.
The Scottish Government’s financial modelling of short term savings from investing in early years/early interventions from pre-birth to aged five suggests that there are potential net savings of up to £37.4k per annum per child in severe cases and of approximately £5.1k per annum for a child with moderate difficulties in the first five years of life. They estimate that medium term annual savings of £131 million can come if all of the interventions are successful.
Digital economy
Currently we are lagging five or ten years behind other countries. The Royal Society of Edinburgh have produced a comprehensive blueprint for bringing super-fast broadband to every community at a cost of £100 million. BT estimate that taking the cables the final mile to every home could cost a total of £200 million, well within our budget.
This system will be good for 30 years. The RSE report estimated that if the money was borrowed then it could easily be paid back inside 15 years with a further 15 years operating life remaining.
Our proposal identifies the lump sum needed for investment.
The RSE estimates that an industry levy of around £25 per annum per subscriber would generate £25m per annum for the Government. In addition the RSE estimates that the public sector currently spends between £53m and £200m annually on networking charges. This would be dramatically reduced under our plans. The public sector spends £30m on telephony every year. This would largely be eliminated under our plans. The International Telecommunications Union estimates that cost savings from just four areas (health, education, energy and transport) will generate savings of £25m per annum.
Added together, it would be reasonable to expect savings of up to £150m per annum from our plans. We have indicated £50m savings by 2014-15 in our costings.
The Royal Society of Edinburgh recommend the establishment of a non-profit distributing Digital Scotland Trust to take forward the investment.
Science Nation
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| A science boffin |
Proportionately to our size, Scottish scientific research is the most cited in the world. We have a good base to secure world-leading research.
The allocation of this resource is part of our reform package for higher education which will avoid the need for tuition fees or a graduate contribution. The additional sum of £250m is roughly equivalent to the level of research and knowledge exchange funding provided annually by the Scottish Funding Council. So it is a significant investment
A part of the strand will be devoted to our plans to support renewable energy research, life sciences and to encourage more women scientists.
Energy Saving
Scottish local authorities spend £100 million every year on energy. Our 2003 manifesto included a fund to help them save money. An interim evaluation made recommendations about how to extend the benefits of the fund. The report concluded that the payback period for energy saving projects is 3.2 years. We are proposing to allocate around £60 million to further public sector projects, including projects wider than just local government and also to projects that support energy generation. This will provide at least the annual savings of £20 million that appear in the Costings section of our manifesto.
The remainder of the fund will be allocated to support households and businesses save energy. Part of this will be repaid through savings in bills (as with the UK Government’s Green Deal) and part will be to provide support and direct help to whole communities, rented housing. There will be a further long-term income stream to the Scottish Government from this plan. It is likely that this funding could support 200,000 homes and businesses.
Finance Scotland
In effect, our reforms to Scottish Water and the creation of the Investing in Scotland’s Future Fund will allow private investors - such as pension funds - to take the easy route to invest in the debts of the safe Scottish Water and allow the Scottish Government to use part of the proceeds to invest in the new and high-growth companies that struggle to get finance. These are the companies that are going to create the wealth, growth and jobs in the future. Yet they have been let down by their greedy, commercial banks. We will get them the money.
We estimate that our Regional Development Banks will be able to lend out £500m in their early years of operation. At a cautiously assumed rate of repayment of 5% that generates income of £25m per annum as shown in our manifesto Costings chapter.
