'Spend more' on deprived children

4 July 2011 Last updated at 10:01 GMT The report said there was an urgent case for more investment for disadvantaged children Society will suffer "immense penalties" unless more money is spent improving the lives of children from deprived backgrounds, a report has warned.

Asked by the prime minister to look at the issue, Labour MP Graham Allen told the government that early intervention should be its priority for investment.

He suggested increasing public spending on such projects by 1% each year.

But he also called for extra spending from private sources and greater use of contracting payments by results.

In his report, he said: "The message of government and UK society is simple, deeply moral, and economically sound: we must invest now in the lives of neglected children to improve their lives and avoid future costs to society.

"We cannot afford to find an alternative to inaction."

Best start

He called for "political commitment" from Prime Minister David Cameron to turn talk into action.

"By building out the immense costs of failure, it is in fact the best sustainable structural deficit reduction program available," he added.

This was because it was often the state that had to meet the future costs of under-achievement and poor educational attainment, he said.

Nottingham North MP Mr Allen was asked by Mr Cameron to assess how children from disadvantaged backgrounds could be given the best start in life.

In his first report, earlier this year, he advocated "early intervention" by the government to help the social, emotional and intellectual development of pre-school children from deprived backgrounds.

He claimed investment in more health visitors for the 0-2 age group would produce "much better outcomes" and avoid "a lifetime on benefits and low educational achievement".

Private investment

In his second report - Smart Investment, Massive Savings - he turned his attention to how to fund such improvements.

He called for ministers to be more creative in finding additional non-government money.

Suggestions for this included asking the Treasury to commission a review of early intervention growth incentives ahead of the 2012 budget, to assess how the tax regime could help encourage individuals and business to invest.

This review ought to cover corporation tax, capital-gains tax and whether to allow local authorities the right to borrow against cost-savings from outcome-based contracts.

Mr Allen told BBC Radio 4's Today programme: "We are producing for the chancellor and the British taxpayer the biggest deficit reduction programme you could wish for.

"The billions and billions of pounds you will save in court costs, policing costs, benefits... by having good citizens - the savings are enormous."

He added government spending should move from late intervention to early intervention, "from the fire brigade to the smoke alarms, as it were".

He suggested money could be raised from private sources through an Early Intervention Foundation with close links to the Big Society bank.

This should be sustained by an externally funded ?20m endowment, which the government would co-fund with private, charitable and local government sectors.

Anne Longfield, chief executive of the children's charity 4Children, said: "A first step must be to ring-fence resources for early years' programmes by preventing local authorities from spending the ?2billion Early Intervention grant on other things.

"The grant is an important step in delivering a new approach to services and must reach the people it is intended for."

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