Why good neighbours are worth their weight in gold

27 Jan 2017 Nick Garbutt    Last updated: 27 Jan 2017

Neighbours having fun ... and saving money

Everybody knows that if we were better neighbours and lived in stronger communities we’d not just be happier but better off, not just individually but collectively. 

But by how much? It seems unquantifiable but a report just published by the Centre of Economics and Business Research (Cebr) comes up with some mind-boggling figures.

It claims that the cost of “disconnected communities” across the UK is £32 billion.

This is split into three categories: loss of productivity as a result of disconnected communities is put at £12 billion, it claims that the economic benefits of stronger communities could save £14 billion and there would be an uplift of £6 billion in increased productivity as a result of a healthier and happier workforce.

Drilling into the details Cebr provides breakdowns for each region. So, for example productivity benefits for Northern Ireland of a happier workforce are put at £512 million.

These findings appear so astonishing that Scope set out to examine the basis of the survey which was commissioned by the Big Lunch, the neighbourliness initiative from the Eden Project which is funded by Big Lottery. The Big Lunch strives to improve social capital by encouraging neighbours to get together for an annual lunch. The idea is that this will be a catalyst to strengthening community ties. 

Fostering neighbourliness is a good thing for sure, but until now there has been no work to measure what stronger communities are worth to the economy.

The report builds on an increasing volume of academic literature that suggests that by increasing social capital (ie reducing isolation and enhancing social inclusion) community activities lead to direct improvements in health, educational performance and can reduce poverty.

In terms of savings stronger communities need less public services, and so therefore reduce the burden upon them, bringing down the cost. And the increasing productivity resulting from healthier and happier individuals in that community can increase productivity, leading to an economic boost.

It does make sense. But how did the survey produce such high numbers?

Let’s take one element of the report as an example.

Cebr claims that increased social cohesion will reduce crime. This is evidenced by a Home Office Survey which was carried out in 2006. The Wedlock Report concluded that stronger communities lead to a drop in overall crime of 3%. Some categories fall by more: burglaries, for example drop by 4%.

This is a result of neighbours looking out for each other and respecting each others’ property and safety. Often strong communities will get together to run neighbourhood watch schemes as well.

There has been further research on the cost of crime, which includes policing and the judicial and legal costs. This allows researchers to estimate the potential savings based on Home Office figures for the cost of crime. So therefore a 3% reduction in crime as a result of stronger communities equates to £205 million, for Northern Ireland the figure is £400,000.

The research claims even bigger savings for the health in the health budget.

The report states: “Many studies have confirmed that loneliness can be as damaging to health as smoking and obesity. Social isolation can also be linked to cardiovascular health risks, poor diet, heavy drinking and increased blood pressure, signs of ageing, risks of dementia, symptoms of depression and re-hospitalisation after illness. Fulton and Jupp (2015) try to assess the financial impact of loneliness in terms of increased public service usage by elderly people, putting the cost at £12,000 per person over a 15-year period”

It also cites American research suggesting that involvement in community activity, such as church and sports groups reduces mortality – so that the more people participate in such activities in a community, so does the death rate fall.

It also identifies potential savings in less visits to the GP and decreased use of social care services for people who are better nurtured in their community. The projected health savings of more than £5 billion  across the UK and Y£267 million for Northern Ireland are based on the reduction in GP and nurse visits that a healthier population would require.

Another area covered by the survey is the savings made to many household costs when we lend each other a hand.

Part of the research was conducted amongst participants of the Big Lunch and other initiatives designed to improve social capital. It identified some of the ways in which savings can be made when you get on with your neighbours.

For example sharing baby sitters, giving and receiving lifts from neighbours, helping with each other’s gardening, pet sitting, sharing surplus food and simple car repairs. Cebr used a survey to identify some of the activities neighbours do with each other and save money.

They used this to calculate how much is saved every year by neighbourly acts and came up with a figure of £458 per person for people not involved in community activity, rising to more than £700 for people involved in multiple activities, which gave a figure of £15 billion for the entire population.  Cebr state this to be the current benefit of neighbourly acts. However if everyone was involved in strong communities then Cebr calculates that the total saving would be £29 billion, and so therefore puts the cost of disconnected communities at around £14 billion.

One specific example is cited in which neighbours share a babysitter for both of their sets of children. If each neighbour hired separate babysitters, they would each pay £60 (total £120), but they only pay £40 each (total £80) if they jointly hire a babysitter.

Perhaps the most difficult area to estimate was the impact that increased happiness would have on productivity in the workplace. Here Cebr relies on a 2006 piece of research that found that happiness would boost productivity by 12%. Working from calculations about the number of people not currently involved in community activity (66%) it comes up with the figure of £6 billion in extra productivity (the Northern Ireland figure is £512 million.

These are very high figures and no doubt some will quibble the assumptions that underpin them.

But nevertheless this research in attempting to demonstrate the value of strong communities, and the cost of disconnected ones is both exciting and important.

It has huge implications for policy-makers, who will doubtless be all over it, and will reinforce the emphasis being put on fostering “well being” in governmental measures.

It also poses interesting questions about the economic forces that tend to fracture communities: the decline of rural areas, the movement of many young people away from home and community to find work to cite just two factors.

People are attracted to live in strong communities. There is even evidence that many would be prepared to pay a premium to buy a house in such an area. The value of The Big Lunch and other initiatives which build community cohesion has always been recognised. What’s new about this research is that very few of us could even guess the potential economic benefits at stake.


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