news

The costs of the pandemic and the Government’s responses to it will have long-term consequences for the health, livelihoods, and wellbeing of individuals and families right across the UK. This means it is essential that policymakers are making decisions with the right tools and information at their disposal to understand the impact of the different options available.

Legatum Institute develops holistic impact assessment tool to inform Government's Covid-19 responses

A new report by the Legatum Institute provides a proof of concept for a holistic assessment of the impact of Covid-19 and the Government’s policy responses. The framework:

  • Is based on the methodology of the Legatum Prosperity IndexTM, which analyses the drivers of prosperity around the world;
  • Assesses the impacts of Covid-19 across a range of factors including:
    • Direct health effects associated with mortality and illness from the virus itself.
    • Indirect physical and mental health effects associated with changes in health service and care system provision, and behaviour and health impacts that are related to the pandemic but are not caused by the virus itself.
    • Economic effects associated with lost economic output, incomes, and productivity.
    • Education effects associated with school closures and disruption to the provision of education in other settings.
    • Wider impacts that can cover a multitude of areas where the pandemic and people’s responses to it (in terms of chosen or enforced changes in behaviour) lead to impacts on wellbeing.
  • Looks at both short- and long-term impacts; and
  • Presents results in a way that allows the impacts across these different areas to be considered together.

CEO of the Legatum Institute, Baroness Philippa Stroud, said:

“Covid-19 has fundamentally impacted all of us; through our health, our relationships, and our livelihoods. As we approach Christmas, we must not forget that many families will be remembering loved ones who have passed during the pandemic.

“We must also remember that the costs of the pandemic and the Government’s responses to it will have long-term consequences for the health, livelihoods, and wellbeing of individuals and families right across the UK. This means it is essential that policymakers are making decisions with the right tools and information at their disposal to understand the impact of the different options available.

“Best practice for Government policy decisions is to undertake an impact assessment, to identify the assumptions and trade-offs being made that are inherent in a given area of policy. But there is currently no public evidence that such a tool exists and is being used. This leaves policymakers and politicians facing the unenviable task of weighing up many conflicting issues, under a large degree of uncertainty and with very large consequences at hand.

“The proof of concept outlined in this report shows that this does not need to be the case; delivering this sort of analysis is possible. We do not claim that this proof of concept provides a definitive judgement on the efficacy of the decisions taken at any point since the start of the Covid-19 pandemic, or the answer for the difficult decisions that will come next. But the framework does clearly show the value of taking on and further developing this sort of tool. Building on this framework and developing the approach further would make it more likely that Government policy truly delivers the best overall outcomes for families and communities across the UK. It also provides a way for policymakers and politicians to communicate the evidence behind, and build public trust in, the choices being made.”

Impacts of Covid-19 and Government responses to date

Using the framework to assess the period between 21st March and 4th November 2020, the report identifies a wide range of short- and long-term impacts on people and families across England. These include:

  • More than 50,000 people in England had lost their lives to the virus.
  • More than 100,000 people could be impacted by ‘long-Covid’.
  • The estimated combined loss of economic output over the short- and long-term was valued at £550bn.
  • There had been more than 150 days of significant disruptions to schooling, leading to short- and long-term impact on learning and opportunities.
  • There had been a 17% increase in average anxiety scores.
  • There had been a 5% reduction in average life satisfaction scores.

Overall, the report finds that the short and long-term impacts on health, the economy, and society between 21st March and 4th November resulted in a hit to wellbeing in England worth close to £800bn, based on the Treasury’s standard conversion factor of £60,000 for one Quality Adjusted Life Year.

Between 5th November and 2nd December, during the English national lockdown, there was an additional hit to wellbeing worth nearly £90bn.

Director of Policy at the Legatum Institute, Dr Stephen Brien, commented:

“Without the action of Government, there is no doubt that more people would have died as a result of the pandemic this year. However, our report shows that this action to limit the short-term deaths from the virus has come at a cost. Alongside the economic impacts of restrictions on mobility, work, and social mixing, the cost includes the cancellation of other medical procedures, the mental health impacts of social isolation and reduced incomes, and the long-term mortality impacts associated with economic crises and recessions.

“Although it is hugely challenging, Government policy should look to consider all of these impacts and follow a path that is most likely to lead to the best overall wellbeing outcomes across the UK.

“This report shows that a holistic impact assessment tool can be developed to help policymakers make these incredibly difficult decisions. As with all impact assessments, results come with assumptions, uncertainties, and a range of scenarios. In this respect, a tool such as this does not on its own provide the answer to difficult policy questions, but it does provide invaluable input by allowing the range of issues to be considered in a consistent way. It also ensures that assumptions are surfaced and made more transparent – and in doing so it can help broaden the range of options considered.

“This work has demonstrated the importance of differentiating the question of what is the right level of mobility and mixing from the question of what are the most appropriate policies to achieve it, including public information, guidance, and regulations. It has also shown the necessity of conducting and regularly updating impact assessments at a local level, as the difference in underlying infection growth rates, demography, and employment patterns means that the level of mobility and required policy response vary significantly across the country.

“Following the publication of this report we are calling for Government to do three things: 1) to adopt and develop the proof of concept and use it to inform future policymaking with regards to Covid-19; 2) to establish and publish a mobility index, showing the overall level of the public’s movements and social interactions and how these vary in different localities, which can help the public understand how much to reduce their mobility; and 3) to use the framework and mobility index, alongside existing information on localised infection rates and hospital capacity, to determine appropriate responses at a local level.”