Monday, 17 October 2016

Troubled Families - anatomy of a policy disaster

[IMPORTANT DISCLAIMER: This blog represents my personal view only: not that of NIESR or of the evaluation consortium led by Ecorys]

People sometimes ask me why I spend so much time correcting the inaccurate or misleading use of statistics by politicians and newspapers. After all, they say, it’s just politics and spin, mostly – a Minister getting her facts wrong doesn’t necessarily mean anything for real people or actual policy.  Perhaps I should calm down and focus on what's really happening, not the public statements.  

However, with the publication of the evaluation of the Troubled Families Programme (TFP), we have a perfect case study of how the manipulation and misrepresentation of statistics by politicians and civil servants – from the Prime Minister downwards – led directly to bad policy and, frankly, to the wasting of hundreds of millions of pounds of taxpayers’ money.The findings of the evaluation are set out here - those interested in the detail of the TFP should read the synthesis report, produced by a consortium led by Ecorys and including NIESR, or at least the Executive Summary of NIESR’s National Impact Study. But, after trawling through literally hundreds of regressions, the bottom line is quite simple:
The key finding is that across a wide range of outcomes, covering the key objectives of the Troubled Families Programme - employment, benefit receipt, school attendance, safeguarding and child welfare - we were unable to find consistent evidence that the programme had any significant or systematic impact.  The vast majority of impact estimates were statistically insignificant, with a very small number of positive or negative results.  These results are consistent with those found by the separate and independent impact analysis using survey data, also published today, which also found no significant or systemic impact on outcomes related to employment, job seeking, school attendance, or anti-social behaviour.  
In other words, as far as we can tell from extensive and voluminous analysis of tens of thousands of individual records, using data from local authorities, DWP, HMRC, the Department for Education, and the Police National Computer, the Troubled Families Programme had no impact on the key outcomes it was supposed to improve at all. It didn’t make people more (or less) likely to come off benefits .To get jobs. To commit fewer crimes. And so on. And, just to rub it in, these findings were confirmed by an entirely separate evaluation, conducted by another research organisation, which used a different data set and a different methodology to come up with essentially the same answer – no measurable impact on any of the key outcomes.

But the key point here – and the indictment of politicians and civil servants - is not that the TFP didn’t achieve what it set out to do.  That's unfortunate of course. But successful policymaking requires experimentation and risk-taking – and by definition, sometimes that results in failure. If new programmes never failed to deliver the promised results, that would show government was not taking enough risks. That is should not be the issue. Indeed, many social policy experts thought that the basic principles underlying the programme made a lot of sense.   The point is that it was the government’s deliberate misrepresentation of the data and statistics that led to badly formulated targets, which in turn translated into a funding model that could have been designed to waste money. Bad stats meant bad policy.

And yes, I (and others - I'd note in particular Ruth Levitas and Stephen Crossley) told them so.  In February 2012, I explained the fundamental flaw in the analysis – that the government was taking a set of families who were undeniably poor and disadvantaged, and redefining them – without a shred of evidence – as dysfunctional and antisocial.  I said:

What began as a shortcut taken by civil servants with the data was translated into a speech by the Prime Minister that simply misrepresented the facts. That in turn resulted in sensationalist and misleading headlines; the end result, more likely than not, will be bad policy.

Did they stop, listen, and think? No. Instead they chose to translate an obviously flawed analysis, constructed for the purposes of a speech, into local level targets and funding.  Four months later, I wrote:

Even leaving aside the morality of using the language of "stigmatising" with respect to a set of families many of whom neither deserve nor will benefit from any such thing, this is a terrible way to make policy.  Using data - and a completely arbitrary national target number - that everyone knows are simply wrong, solely because it would be embarrassing to admit a mistake, will make the programme less effective and risks wasting public money.  Not only does it reflect badly on Ministers, it also does no credit to the senior civil servants who allow the publication of information which - at the most charitable - appears to reflect a complete lack of understanding of the relevant data.   This is a clear case for the National Audit Office. 

We can now skip ahead three years.  It was at this point, in March 2015, that Ministers decided to pre-empt the result of the evaluation, claiming that:

More than 105,000 troubled families turned around saving taxpayers an estimated £1.2 billion

This was untrue.  And we – including the civil servants responsible for the press release - knew it at the time, as I pointed out:

We have, as of now, absolutely no idea whether the TFP has saved taxpayers anything at all; and if it has, how much.  The £1.2 billion is pure, unadulterated fiction.

But it was worse than that.  As Stephen Crossley observed, anyone who actually bothered to read the CLG report in detail would have realised that the TFP targeting and funding model was - just as I had predicted - resulting in huge misallocations of money:

Manchester (for example) have identified, worked with and turned around a staggering 2385 ‘troubled families’. Not one has ‘slipped through the net’ or refused to engage with the programme. Leeds and Liverpool have a perfect success rate in each ‘turning around’ over 2000 ‘troubled families. By my reckoning, over 50 other local authorities across the country have been similarly ‘perfect’ in their TF work. Not one single case amongst those 50 odd councils where more ‘troubled families’ were identified or where a ‘troubled family’ has failed to have been turned around.

Commenting on Stephen's analysis, I said:

In other words, CLG told Manchester that it had precisely 2,385 troubled families, and that it was expected to find them and “turn them around”; in return, it would be paid £4,000 per family for doing so. Amazingly, Manchester did precisely that. Ditto Leeds. And Liverpool. And so on.  And CLG is publishing these figures as fact.  I doubt the North Korean Statistical Office would have the cheek.

At this point, it should have been blindingly obvious to the most casual observer that TFP was not - as the government had claimed - a "payments by results" programme. Numbers which had absolutely no basis in any objective reality had first become the basis for targets, then for claimed "success", and then for money.  It wasn't payment by results. It was make up the results as you go along. And cash the cheques.  The results of the evaluation should hardly come as a surprise.  

As a postscript, it's worth noting the caveats in NIESR's evaluation, which state, carefully and correctly, that issues with data quality mean that:

the results cannot be taken as conclusive evidence that the programme had no impact at all

This is quite true. But CLG's attempt to use this as an excuse for their failures conforms perfectly to the classic definition of the Yiddish term "chutzpah"(cheek or audacity in English) - "the man who kills his mother and father, and asks the court for mercy because he's an orphan". The data quality issues are entirely the result of the decision by the government to press ahead with spending hundreds of millions of pounds on an untested, unpiloted programme, on the basis of little or no evidence, rather than piloting it and/or rolling it out in such a way that a more robust data collection and evaluation strategy would have been possible. 

So whose fault is this sorry saga?  The senior civil servant who directed the Troubled Families Programme, Louise Casey, once said

If No 10 says bloody 'evidence-based policy' to me one more time, I'll deck them.
With David Cameron, who appointed her to this role in 2011, we can be pretty sure no physical violence was required.  Nothing he told her interfered with her instincts to press ahead, and to ignore both the evidence and the warnings from me and from others.  

So it starts at the top. But while most of the blame rightly rests with Ministers, including the former Prime Minister, and the responsible senior civil servants at CLG - and they should be held accountable – it is also important to note that the normal checks and balances that should have picked up on all this simply failed. What on earth did the Treasury think it was doing allowing public money to be squandered like this?  Were they busy cutting core local authority budgets to notice that CLG were throwing hundreds of millions of pounds away with no serious scrutiny? 

Nor was it just civil servants. Parliament didn’t do any better. Where was the National Audit Office? As far as I can tell it produced one, frankly mediocre report, that fudged or buried the key points - which were all by this time in the public domain.  The key Parliamentary Committees - the Public Accounts Committee (PAC) and the CLG Committee? They too were asleep at the wheel. Opposition parties and MPs do not appear to have ever raised any of these points, even though they had ample opportunity to do so.

On Wednesday, when the PAC holds a hearing – Ms. Casey will be testifying – they will have a chance to redeem themselves by asking some of the questions that should have been asked years ago. You can already read the written evidence – I’d particularly highlight 

that from Stephen Crossley.

What lessons can we learn from this?  Most obvious is the one I started with. Statistics and facts do actually matter. They translate directly into policy, and hence into real outcomes for real people.  But for that to happen in the way that it should – and not be distorted by politicians on the way – then the process not just for the production but for the analysis and interpretation of statistics and evidence needs to be genuinely independent. I set out some modest proposals here.  

Sunday, 12 May 2013

The impacts of immigration: my summary of the evidence (video)

My summary of the economic evidence on immigration: labour markets, benefits, public services and the long-term impacts on growth and productivity (8 minutes): 

Monday, 6 May 2013

White flight: "600,000 have quit London in a decade". The true figure is far higher

The Daily Mail is rarely knowingly understated when it comes to a scare story, especially about immigration. However, sometimes ignorance of basic statistical concepts does the job for them. So it is for today's piece, "How rise of white flight is creating a segregated UK", which states: 
More than 600,000 white British Londoners have left the capital in a decade"
This is nonsense. The true figure for the number of white Londoners who've left is far higher - once again, the Mail confuses net with gross figures.  Even assuming that we are only talking about Londoners moving from the capital to other parts of the UK (that is, ignoring international emigration, much of which may be non-British and/or non-white), the ONS' best estimate is that about 240,000 people moved out of London in the single year ending June 2011 - over a decade, that adds up to well over 2 million.   

Thursday, 2 May 2013

Comment on Reinhart and Rogoff's FT article

My letter to the FT responds to Ken Rogoff and Carmen Reinhart's opinion piece (2 May):

"In their article 'Austerity is not the only answer to a debt problem', Ken Rogoff and Carmen Reinhart argue:
"the debate needs to be reconnected to the facts. Let us start with one: the ratios of debt to gross domestic product are at historically high levels in many countries, many rising above previous wartime peaks."

Wednesday, 1 May 2013

Underemployment in the UK

In a new paper published today in the latest issue of the National Institute Economic Review, economists David Bell and David Blanchflower of the University of Stirling and Dartmouth College introduce a new measure of labour market slack. The conventional measure of the difference between supply and demand in the labour market is the unemployment rate. But it does not capture a phenomenon which has become increasingly important during the current recession - underemployment.

Tuesday, 23 April 2013

The deficit is falling..

[Updated 17.00 with HMT response: see end]

The deficit is falling!  Today's figures show that the budget deficit for 2012-13 (public sector net borrowing, excluding some of the more obvious distortions) was £120.6 billion  - £0.3 billion lower than in 2011-12. So maybe the Chancellor's cunning plan - to reduce last year's deficit by not paying some of the UK's bills until this year, also known as "the cheque is in the post" strategy, has worked.  Or, more prosaically, the government has simply cut public investment again - net investment was £2.4 billion lower in March 2013 than in March 2012, while the current deficit was about £1 billion higher.

Tuesday, 9 April 2013

Recessions and recoveries: a historical perspective (updated April 9, 2013)

Here is NIESR's chart showing the path of recession and recovery in various previous downturns, updated for our estimate of monthly GDP, published April 9, 2013.