Anthony Hilton: A push towards social enterprise can see us rise up the well-being table

Economic growth ‘measures everything except that which makes life worthwhile'

Way back in 1968, shortly before he was assassinated, Robert Kennedy, criticised society’s obsession with economic growth, and the fact that “it measures everything except that which makes life worthwhile”.

This week the OECD published a global comparison of national well-being, an analysis which includes an assessment of the integrity of government, the quality of education, the strength of personal relationships and much else and concluded that Australia by these measures was the richest country in the world.

Other measures frequently put the northern European countries and particularly Finland, Norway, the Netherlands and Denmark at the top of the league with Denmark probably having the edge. The principal reasons they score highly apparently are that there is a high level of trust in those societies; they are non-judgmental so that they live and let live, and people feel they have the power to change what they don’t like.

Empowerment surely is a big part of it because few things are more corrosive to society than the sense of hopelessness and despair which comes from the feeling that nothing will ever get better.

That is why the publication this week of the first annual report from Big Society Capital is so timely. Its purpose is to promote social enterprise – the charities, voluntary organisations and small businesses which combat the effects of social deprivation – by building an infrastructure of support and professionalism which will enable it to be much more effective. Thus it is encouraging the setting up of investment funds which will invest in social projects, fostering the growth of social investment intermediaries who can assist, advise and promote the establishment of front-line organisations, and helping to underwrite social investment bonds, where the funds raised are used, in the words of its chairman Sir Ronald Cohen, “to finance social entrepreneurs in generating innovative, more effective approaches to tackling persistent social issues”.

One example of how they work comes from Essex. It costs local authorities between £100,000 and £200,000 a year to take children into care. The several million pounds raised from an investors bond will finance a multi-year programme run by the charity Action for Children which hopes to reduce the numbers by identifying the children at risk and intervening early to support the parents.

It is a payments-by-results scheme. Success will be measured by a reduction in the number of children being taken into care and the return on the bond will come from Essex paying across a proportion of the money saved.

About a dozen of these bond-funded schemes have emerged, focusing on health, behaviour, literacy, and so on. The financing technique has the potential to become the next new thing.