Improving educational attainment creates huge savings for the public sector

 “We have helped inspire students who may not have gone onto university otherwise. From 2013-2014, 100% of our students attained the Government’s benchmark of 5 GCSE passes, including English and Maths…In 2014, 78% of our graduating students gained admission to universities…with 27% going to the Top 20 universities since 2003. Of the students who didn't enter university… two have been accepted into highly selective school leavers’ recruitment programmes and three are taking gap years with the intent of entering university in 2015”

Providing education and training services is the most popular area of work for charities in Southwark; 577 of Southwark’s charities work specifically in the area of education and training.

From this brief paragraph, we can infer that 5 students represented 22% of the cohort the charity was working with, meaning that the 78% of students who gained admissions to university represents 17 students. University attendance translates into savings for the public sector, and creates social and economic value for wider society.

A graduate level 4+ qualification per person, per year, has a £2,996 fiscal value to society; and a £3,404 economic value. Therefore, 17 students going to university, assuming they finish their course successfully, would save the public sector a total of £108,800. This is just for one year.

Let’s also take into account the preventative power – the prevention of issues or events happening further down the line - of attending university, for both individuals and society.

According to research carried out by the Department for Business, Innovation and Skills, there is a huge amount of social benefit associated with an individual participating in higher education. A ‘quadrant’ has been developed, which visually demonstrates the benefit to both the individual and wider society of attending university. Some of the benefits are as follows:

  • Higher earnings and less exposure to unemployment. Over their working life, the average graduate will earn over £100,000 more than an individual with just 2 or more A-Levels. An undergraduate degree increases the probability of being employed – 86% of all young first degree graduates were employed, compared to 60% of 18-30 year olds with qualifications at Level 3 or below.
  • Lower propensity to commit (non-violent) crime. There are differences in conviction rates for burglary, theft, criminal damage and drug related-offences as the level of educational attainment of an individual rises.
  • Better educational parenting. Graduates are half as likely to see educational difficulties in their children then those educated below A-Level.
  • Less likely to smoke and drink excessively. Non-graduates with A-Levels are 50-75% more likely to be a smoker at age 30. Those with lower level qualifications have been shown to be 3 times more likely to start consuming alcohol excessively.

Let’s take a quick look at some of the associated public sector savings:

  • Higher earnings and less exposure to unemployment. The fiscal and economic benefit for a workless claimant who has been claiming Job Seekers Allowance entering work is estimated to be £25,111 per claimant per year.
  • Lower propensity to commit (non-violent) crime. The cost of a court event for burglary is estimated to be £3,960 per event.
  • Better educational parenting. The cost to social services of delivering a group-based parenting programme is estimated to be £1,093 per participant.
  • Less likely to smoke and drink excessively. The estimated cost to the NHS per year of alcohol dependency (per drinker) is estimated to be £2,015. As of November 2014, the estimated smoking costs to society in Southwark per year are approximately £66.4m.

By breaking down the potential savings, we can see that this charity's work, which aims to get young people who had not previously considered going to university to enrol, it much more valuable than it may appear on the surface.

“We provide open access sports and educational provision for over 300 children in the borough to act as a preventative measure to divert them from negative peer influences. We provide focused support to a dozen children showing negative patterns of behaviour.  As a result of this support all have either improved their behaviour/attainment at school”

Participation in sports can have huge benefits for young people. Benefits of physical activity in childhood include increased bone strength, cognitive functioning, and improved mental health. For secondary school pupils, there is evidence that extra-curricular physical activity is associated with positive academic attitudes, better school attendance, and homework completion.

The HACT Social Value Calculator gives the value of 300 under-25s participating in mild exercise (over the course of a year) as £515,713.

We also need to take into account the positive impact on educational attainment. The cost of a permanent exclusion from school is £12,131 per pupil per year. Costs are spread across the local authority, the NHS, and the criminal justice system.

If the charity prevented 300 children from potential exclusion from school, this could result in a public sector saving of £3,696,300.