Lord O’Donnell, who was Cabinet Secretary to three prime ministers, is calling for an increased focus on wellbeing as a metric for determining policy, arguing that gross domestic product is an incomplete measure of the success of the government initiatives.
In a paper to be published in the journal of Ecological Economics called “National Wellbeing Policy and a Weighted Approach to Human Feelings” that is co-authored by Professor Andrew Oswald, an economist at the University of Warwick, Gus O’Donnell, says a greater governmental focus on wellbeing would shift focus from physical to mental health where ‘bang for buck’ is believed to be higher.
O’Donnell, who is now chairman of consultancy Frontier Economics, says government should take greater account of how policies impact individuals’ emotional wellbeing.
In 2012 Prime Minister David Cameron pushed for the introduction of the Happiness Index, created by the Office for National Statistics to measure the nation’s wellbeing.
His paper says criticises the low level of spending in the areas of prevention, particularly in the realm of mental health, relative to responsive medical interventions.
O’Donnell says: “The demand from politicians for policies that raise wellbeing is high and is likely to stay high during the so-called period of “austerity” and into the future. Governments of all persuasions want to keep up, or even improve, public satisfaction with public services while reducing the money spent on them.
“Traditional solutions focus on reducing costs, for example, by lowering procurement costs. More innovative approaches focus on trying to raise public wellbeing, for example by preventing problems before they start to cost money.
“In the health service, the adoption of behavioural approaches to encourage healthier living is in its infancy. Such programmes have tiny funding compared to the amounts spent on drugs and hospitals. A well-being focus might be likely to shift resources from physical to mental health as the well-being “bang per buck” is thought to be higher in the latter. The use of quality adjusted life years (QALYs) by the UK’s National Institute for Clinical Excellence (NICE) was an early example of the use of a well-being measure to guide policy and provides useful lessons.
“All now accept that QALYs are not perfect – and one might prefer to use wellbeing adjusted life years or WELBYs – but they are better than purely fiscal alternatives.”