Topic: Article
Posted on 8th Jan 2021

Build Back Happier? Yes, But…

Wellbeing is a much-discussed word right now, and it deserves its moment in the spotlight. For some time, those that assess the impacts of new public policy have not considered the opportunity wellbeing metrics could pose to the effectiveness of said policy. Could this be wellbeing's moment to create change?

When the majority of the factors that contribute to good levels of wellbeing are positive, we tend to feel good about our lives. These factors include levels of income, education and employment, mental and physical health, feelings of security, the influence of the environment on our lives, our community and social life, and our family life. But when too many of these factors have a negative influence on the way we feel about ourselves, we can suffer on a sliding scale from anxious and unhappy to (in extreme cases) levels of crisis.

Right now, and for some time, those that assess the impacts of new public policy have not considered how people might feel when they experience the influence of initiatives and projects. Instead, policy is tested in terms of cost benefit – essentially the financial productivity resulting from change. In human terms this means that the prediction of the influence of new policies on people barely ranks as much more than a guess, if it is considered at all. If government really wanted to achieve what it is elected to do; to keep us safe and provide public services for our wellbeing and happiness, then the way we assess policy really needs to change.

Lord Gus O’Donnell has been working to get this message out for some time. Writing recently with Professor Richard Layard in The Times, and on his own in the Financial Times he states that the UK government has struggled to explain why lockdown measures to supress the Covid-19 virus are also good for our health and wellbeing. It should have been easy to show why the economics of better health outweighed the temporary reduction in personal freedom. But without a history of wellbeing literacy among policymakers, this message could never have been accompanied by the figures and chart we take for granted in the government’s daily COVID-19 press conferences.

It is not easy to understand how the multiple factors that affect people’s lives manifest in terms of a reaction to changes in their environment. But a more serious attempt to get to grips with this has to be better than the prevalence of ignorance. As Gus O’Donnell puts it, it is better to roughly measure the right concepts than to use more precise measures of the wrong concepts.

The government in Whitehall has sought to encourage some thought about wellbeing by requiring bidders for central government contracts to include proposals on how they will enhance social value (see Procurement Policy Note 06/20 for more details). This, along with the more established terms in the Social Value Act is having an effect on  public sector procurement, but there is still a lot to be desired.

HM Treasury publishes guidance known as the Green Book to help those assessing the merits of projects and programmes that require public spending such as taxation, changes to regulations, and changes to the use of existing public assets and resources. The Green Book is designed to help decision-makers to ‘maximise the delivery of economic, social and environmental returns for UK society…’ A recent review of the guidance (November 2020) concluded that the Green Book’s current appraisal practice ‘risks undermining the Government’s ambition to “level up” poorer regions and to achieve other strategic objectives’. It also suggested that significant changes would be necessary to correct this problem. The key fault was that cost-benefit analysis (CBA) is good at counting the transactional monetary benefits of projects and programmes, but it often fails to identify the ‘the specific social and economic features of different places and how the intervention may affect them’. Another way of saying this is that cost benefit approaches are poor at understanding people, and how they respond to changes to their lives.

It is a common accusation and one that has been levelled at adherents of CBA for decades. In a famous speech on his ill-fated Presidential campaign, Bobby Kennedy said this approach ‘measures everything except that which makes life worthwhile.’ Others in academia (Bronstein et al. for example) have often criticised the reliance of CBA on hypothetical preferences (asking people to guess the value of goods and services they might gain or lose for example) rather than asking them how they feel about the prospect of these outcomes. This they say leads to ‘systematic errors’. They advocate better methods based on people’s actual experience of life as an alternative.

It remains to be seen whether the Treasury’s redraft of the Green Book will give sufficient encouragement to project appraisers to conduct surveys of local levels of wellbeing. However, the mere acknowledgement that this has been a recurring blind spot in the formation of public policy is very promising. The review of the Green Book has not quite fired the starting pistol on people-based evaluation, but by saying that locality matters, it begs the question; how else would you know how a place reacts to policy unless you asked the people who live there?

A call to build back happier requires more reliable ways of determining levels of wellbeing, otherwise it is just hollow rhetoric. To apply this to a decision to go ahead with project programme or policy would be brave, but not unprecedented. The Bank of England has been carrying out an ongoing project to embed climate change into financial decisions and macroeconomic analysis. The parallel with embedding wellbeing into key policy decisions should be clear to anyone in government.

Lord O’Donnell is right to have used all of his extensive experience in government to identify this as a key objective in 2021. If we have learned anything from the COVID-19 crisis, the Black Lives Matter protests and the Me Too movement it is that things only get better when we listen to what people are saying about their lives. However, without more sponsorship in the heart of government, the relative increase in enthusiasm we are seeing to promote wellbeing in policy formation, planning and decision-making is likely to wither on the vine. A Cabinet Office Unit for the Integration of Social Value could work for wellbeing in the same way that the old Behavioural Insights Team (or Nudge Unit) worked to help government to understand how to influence the population by appreciating what it is to be a human being. Setting up a body to build wellbeing and social value could improve the county’s economic performance and go some way to return faith in why we have government at all.

Crafted in Liverpool by Kaleidoscope