Why small data matters too

My father is an engineer, and while I struggle to change a light bulb, he did impress on me from an early age the importance of the right tool for the job. And that’s what this blog is about – choosing the right tool; or to put it another way, how governments can use data to buy more socially innovative solutions.

There is a need for radical innovation. Put bluntly, governments around the world are straining under the social challenges of a resource-constrained and rapidly ageing world. These challenges are often complex, deeply interconnected and costly. For example, in the UK, 30% of prisoners have a family member with a conviction, 72% of young offenders repeat-offend within a year, and young people eligible for free school meals – an indicator of poverty in the UK – are 400% more likely to be excluded from school. We clearly need to do things differently.

Now historically, what do governments tend to do when they want to improve things? They get more specific; they define targets and inputs more closely. This can work well in certain cases, but not always for complex social issues where we don’t necessarily know what works. But equally, for the good governance of public money it’s tricky to go the other way, and define nothing. So in the UK we’re increasingly trialling something else – defining the outcomes we would like to see, but letting providers deliver them in the way they think best. In short, we’re allowing them to innovate.

Now that seems pretty obvious, but it’s surprising how few governments are doing this at scale. The next step is rarer still.

We’re making the costs of many of these issues publicly available and transparent to governments. For example, £64,819 is the cost of a child taken into care for a year; £39,472 is the cost of a prisoner per year; £11,972 is the cost of somebody being excluded from school. Here in the UK Cabinet Office, we’ve worked with a group called New Economy to put 640 of those costs online. It’s only a start, but it allows groups outside the government to look at those costs and question whether they can do it more cheaply. And what we’re finding is that many socially innovative organizations – charities, community groups, social entrepreneurs and so on – can. Particularly on those complex social issues that require a deep understanding of the service user.

What this shows, for me, is the power of small data. It requires governments to be clearer on what they want to buy, and social organizations to be clearer on measuring their impact. Obviously, not everything that counts can be counted, but it’s a powerful model.

To give a practical example, we know that the life costs of somebody becoming “NEET” (not in employment, education or training) are very high. We also know that intervening earlier, while they are still at school, is effective. So the Department for Work and Pensions has published a rate card for what we’re willing to spend on outcomes that we know are closely connected to employment; £1,400 for improved attendance, for example. We’re putting close to £60m in outcomes payments into piloting this approach. And it’s fascinating how many socially minded investors are keen to invest in social ventures to deliver those outcomes, carrying the financial risk if they don’t.

This feels to me to be a simple, but big idea. We’re trying it across many policy areas including health, ageing and reoffending. But why is it just the government? Why not corporations or foundations, or all of us using data to innovate? Now that really would be a revolution in impact.

Further reading
Gordon Brown: How can every child get an education?
The role of governments in social innovation
Hilde Schwab on scaling social innovation

Author: Kieron Boyle is head of Social Investment at the UK Cabinet Office and a World Economic Forum Young Global Leader. 

Image: A bulb hangs inside a restaurant in Madrid. REUTERS/Andrea Comas