Marie Brousseau-Navarro, Professor Jan-Emmanuel De Neve, Carrie Exton and Jennifer Wallace.

Q1 The Chair: Good morning, everybody, and welcome to the House of Lords Select Committee on the long-term implications of Covid-19. I am really thrilled to see all our witnesses here today. Thank you very much for taking the time to talk to us about the work you have been doing on this really important and interesting subject. As you will be aware, our committee has been tasked with looking at the long-term implications. By that, we mean the two to five-year horizon. Today, on the one-year anniversary of a major lockdown, I do not think any of us expected the two-year horizon to start two years from now; we thought we were looking at a slightly different timeframe. We appreciate your help in navigating that complexity, and keeping everything rooted as much as possible in the dual axes of the effect of the pandemic and that long-term effect.

We are really interested to understand about well-being from your points of view. Our committee is tasked with looking at the long-term implications of Covid on the UK’s economic and societal well-being, so it is part of our remit. We have had a session previously, but we have not drilled down in the detail that we hope to get to today. We thank you all for being here. I am going to ask everybody to give a brief hello, so we can put names to faces, and say which organisation you are representing. We have seen your very helpful submissions and so on, so there is no need for a long introduction, but it would be great to put names to faces.

Carrie Exton: Good morning, everybody. It is a pleasure to be here. I am the head of well-being data insights and policy practice at the OECD. I am part of the WISE centre at the OECD, which is a brand-new directorate that we have built to look at issues of well-being, inclusion, sustainability and equality of opportunity.

Jennifer Wallace: Good morning. I am head of policy at the Carnegie UK Trust. The trust is an independent endowed foundation, set up by Andrew Carnegie over 100 years ago to improve the well-being of the people.

The Chair: I was reflecting on whether he would be appalled or pleased with progress if he came back now. Perhaps that is something to think about.

Marie Brousseau-Navarro: I am the director of policy, legislation and innovation for the Future Generations Commissioner for Wales. Sophie Howe is the world’s first independent Future Generations Commissioner.

The Chair: Thank you very much, Marie. I know I have a number of colleagues interested in a lot of the issues that you have been looking at.

Professor Jan-Emmanuel De Neve: Good morning, everyone. I am a professor of economics at the Saïd Business School, University of Oxford, KSI fellow and vice-principal of Harris Manchester College, where I also lead the Wellbeing Research Centre, a research group of about 10 post‑doctoral researchers. You will be pleased to know that we launched the World Happiness Report last weekend, of which I am a co-editor.

Q2 The Chair: Thank you and congratulations on your report. My colleagues and I have a number of questions to ask you, but I would like to kick off with a broad question. We are very focused on the policies that can come out of studying well-being and their outcomes. We are very keen that, if we take forward any recommendations or ideas, we pin them to how government action can change from where we are now. Perhaps this is particularly for Carrie and Jan-Emmanuel, on how Governments can begin to look at policies and well-being together, in order to measure the impact of a policy on well-being and know whether there has been an outcome after it has been introduced. That is a really key point for all of us. The measurement is one part, but the outcome and being able to effect it is another part. Carrie and Jan-Emmanuel, it would be great to hear your thoughts.

Carrie Exton: You cannot understand impact if you cannot measure. To do that, you need to define and understand well-being. You need a clear statement from the Government on what well-being is and what you are trying to improve for people. In the past 10 years or so, we have seen enormous development in this measurement field within OECD countries. As of last year, more than half of all OECD countries had developed well-being frameworks and measurement dashboards. This year alone, we have Canada and Ireland in the process of developing these frameworks and dashboards. These dashboards are quite different across countries. They range between 10 and 130 indicators, but there is a lot of commonality across the themes.

One consistent pattern we see is that these dashboards are addressing the economic, social, environmental and relational aspects of people’s well-being. Usually, there is a strong focus on inclusion, so looking at inequalities and the distribution of well-being across different population groups. Finally, there is often a focus on sustainability, from the perspective of not just environmental resources but social and economic resources.

Within the UK, the Office for National Statistics has been a pioneer on this front. It launched a programme to measure national well-being back in 2011. This was built on the basis of extensive public consultation and resulted in a dashboard that looks at 10 domains of people’s lives. There are currently 43 indicators used to illustrate that dashboard. As Baroness Lane-Fox said, though, measurement is not enough. While the UK has a brilliant foundation with the measurement that has been done by the Office for National Statistics, to really embed those measures into policy-making you need a much wider approach to integrating that into your advice and analysis.

This does not mean just national statistics. This means building a whole research infrastructure around well-being, its drivers and how those drivers link to the policy levers available within government. That research infrastructure is definitely being developed. Again, the UK has many very powerful research assets and a lot of knowledge and expertise to harness here. Internationally, that research base is a bit further behind where we are with the national statistics.

Beyond the research and the evidence base, of course, you need civil servants who know what to do with that evidence—confident, competent users who understand the strengths and weaknesses of these approaches. In turn, to make that happen, you need leadership from within the Civil Service, but also from Government Ministers, asking to understand the well-being impacts of a given policy. If there is not that top-down pressure, there is not the incentive to build this whole infrastructure.

To summarise, from a technical perspective, with the right measures and research in place, it is possible to analyse policy impacts. There are many factors involved in driving people’s well-being. It is quite difficult. There is always an attribution problem with government policy. If you have a national measure that goes up or down, can you attribute that to a specific policy action? That is why you need this granular research base to do the work and make those connections. Statistics are not enough, but they are a really important basis.

The Chair: Can I follow up so I am understanding correctly? Are you arguing that it is the 43 ONS metrics of well-being that need to be embedded in policy, measuring between policies and well-being? Do they feel like the right frameworks? It strikes me that 43 is a huge number to try to bed into anything, let alone the complexity of government. Could you talk a little more about those metrics and how you see them? Is it the sum total of the 43, or are there subgroups? If you were in charge of putting them into government, how would you do that? That strikes me as very important.

Carrie Exton: You need at least 43 to do the monitoring work. If you want to understand how well-being is developing in society over time, life is complex and you need a complex set of indicators to do that job. From a monitoring perspective, keeping in mind that you want to see where well-being might be going up or down for specific groups of people, you need a highly developed dashboard to do that work. The 43 ONS measures look at 10 domains that occur very frequently across OECD member country approaches. There is quite a strong convergence on these themes. To give you a few examples, that covers things such as environment, knowledge, skills, health and relationships. Of course, economic well-being is central. We are not forgetting the economy in all this. There is a wide range of things you need to take into account.

Making that operational for policy is a different question and I readily acknowledge that a dashboard of 43 indicators is quite overwhelming. One of the frontiers for research now needs to be how much simplification we can accept before we slip back into policy siloes where education assesses education impacts and environment assesses environment impacts. The key to implementing well-being is an integrated approach. The real value-add here is to look across people’s lives in a very holistic manner.

If we are trying to simplify that for the purposes of practical policy analysis, we need to do that in a way that is systematic and representative of the diverse range of issues that feed into people’s lives. At a minimum, you need something economic, something environmental, something social, something relational, something on sustainability and something on inclusion. Those would be my top recommendations. We can get into some of the detail about specifics. I know there are many attempts to simplify these metrics into single numbers, for example, including at the OECD. I am very happy to go into greater depth if needed.

The Chair: Thank you, Carrie. That is very helpful. Jan-Emmanuel, could I come to you on this same question of the interrelationship between policy, outcome, definitions and metrics?

Professor Jan-Emmanuel De Neve: Let me echo much of what Carrie has just said and perhaps go into a number of extensions. The first point to make very clearly, regarding the way you put your original question, is that we need to distinguish between impact assessment, or policy evaluation or monitoring—whatever you would like to call it—and policy development. Essentially, think of it as ex ante versus ex post measurement. The measures of well-being, especially the ONS 4 and the other measures that Carrie suggested, all play in and are useful here. Measure what you treasure, because what gets measured gets done, as she noted.

Let me first give an example of what is probably the easiest bit, which is the policy evaluation or monitoring, especially given the depth and granularity of the data that is already available. As Carrie noted, a lot of the OECD countries have started measuring, but none, I think, has measured it so properly, deeply, granularly and locally as the United Kingdom has. In a way, the UK has a big advantage on this front, thanks to the ONS doing very granular measures of well-being since 2011 or 2012.

Let me give you a quick example of what one could do. In the report launched this weekend, in the chapter on workplace well-being, we have tested for the UK the impact of the furlough scheme, in terms of how good or bad it may have been for well-being. You will be pleased to know that it is very good for well-being. With the benefit of hindsight, it is a massive boost for social well-being around the UK. To put that more clearly, we looked into the data on people who were furloughed, rather than being made redundant. Being made redundant led to a 15% drop in people’s life satisfaction from before to after work stoppage. If you were benefiting from a furlough scheme, with or without full pay, you saw only half of that drop. We all know how important work is for well-being. Clearly, one source of resilience was good policy that looked into job retention.

You can contrast that smart, well-being-oriented policy, for example, with an income replacement policy, as you saw in the United States, where a cheque was simply mailed to people and nothing was put in place to try to retain them in their jobs. This is just a quick example of not a general progress assessment, but rather a specific policy assessment that one can do post a policy having been introduced. This would definitely give credence and credibility, and show the extent to which these policies have been good for well-being. That is relatively easily done.

As Carrie noted, there is lots of data. There are huge research capabilities in the UK especially. It is probably the largest group of scholars that are working on this. The UK should take advantage of that, whether it is at Warwick, LSE, Oxford—you name it. There is a huge group of people working on this and lots of interest and sources on this within the Civil Service too.

Let me quickly turn to what is probably the more difficult bit, which is policy formulation. That is where it becomes more tricky, because you cannot evaluate what has not taken place yet. The first thing to note, as Carrie mentioned, is the policy’s aim. What is the UK policy’s aim? This is where your committee is critical. I was looking back through some of the statements. If you look through the revision of the Treasury Green Book in 2018, it now specifically notes that the aim of government here is to improve social welfare or well-being. It is now quite clear what the aim of policy development is, but then the question becomes operational: how can Civil Service think about evaluating ex ante the policy impact of policy proposals? Here, it is more tricky. The good news is that, once again, there is so much data. A wealth of data has become available over the last decades. Even more importantly, lots of insights have been developed based on those data. I will give you a quick example. By now, we know exactly what the impact on well-being will be of a change in pollution, commuting, work-life balance or keeping people in their jobs or not. We now have a precise sense of just how important all these holistic aspects, which are difficult to put into monetary terms sometimes, are for people’s well-being.

If a person loses their job, they lose 0.7 on a scale of 1 to 10, in terms of their life satisfaction. If they increase their income by 10%, it is the equivalent of 0.02 on a scale of 1 to 10. We now have essentially a database of coefficients. It is up to the Whitehall policymakers to look at what they think the impacts will be across specific populations and for how long, then to leverage all these coefficients and attach them to the policy impacts they expect to have.

This approach is essentially the philosophy behind the notion of WELBYs, the well-being years approach, which I, along with Richard Layard, Gus O’Donnell and others, proposed in an article in the British Medical Journal that I think was submitted to you. Many others subscribe to it. This is far from ideal and is not a replacement for current cost-benefit or cost-effectiveness analysis, but it is an interesting avenue for putting well-being at the heart of policy formulation and at least complementing current work being done when policymakers evaluate and crystalise policy options.

Jennifer Wallace: I wanted to add to that with our perspective on subjective well-being versus societal well-being. The description that Jan-Emmanuel just provided is of the use of subjective well-being. For us in policy-making, that is necessary, and it is helpful. It gives us an insight into the impact of unemployment and loneliness on people’s lives, but it is not sufficient if one wants to take a societal well-being approach. If you want to shift even further, you need to go to what Carrie was talking about, the inclusion lens, but also the future focus. Sacrificing our future well-being for current well-being needs to be part of the calculation. We have limited ability to do that at the moment, but it is one of those experimental statistics as we start thinking about how we can embed capital accounts and future natural capital accounts into decision-making, just to add that into your thinking. There is a discussion in the sector about how you embed subjective and societal well-being into the same system.

The Chair: The levels of complexity at the boundaries of what well-being means are significant. Thank you for adding that into the mix.

Marie Brousseau-Navarro: I wanted to make a point that is similar to Jen’s, to describe some of the solutions and practices we have adopted here in Wales.

The Chair: We will definitely come on to those. If we could keep the question a bit tighter at the minute around the metrics, that would be great.

Marie Brousseau-Navarro: It is exactly the same thing. It is really important to see well-being in what we call in Wales its four dimensions. It is based on a UN definition, so it is really important to have social, economic, environmental and cultural well-being—it is really important to remember the cultural one. It is a holistic concept. No one of these four pillars or dimensions takes precedence over the others. If we were to move away from the focus on the economy to a focus on the environment, for example, we would equally miss the point. All four elements are as important, all together.

On the ground, we have seen that, as the OECD conferences have concluded in the past, globally we know how to measure well-being. The real challenge globally now is to make sure that well-being is driving policies. I will explain later all the different ways we are doing that in Wales. The intergenerational element is really important. We are considering well-being across these four pillars of well-being for current generations, but we also have to remember that this must work for future generations too. We need that perspective of time, which is what we have found the most challenging for public bodies in Wales. It is a holistic concept, for now and the future at the same time.

The Chair: We will definitely return to Wales in much more detail. Lord Harris, you had some questions specifically about the things you might not see in some of those definitions.

Q3 Lord Harris of Haringey: In one sense, I find this all tremendously exciting and terribly valuable. I have to confess to being rather a cynic as to how some of these measures will be used in practice. If you crystallise it down to one number, the precise weightings that you give to each of the different elements in your 10 domains, your 43 indicators, or whatever it might be, will determine whether the number goes up or down in response to a policy. A Government might choose the weightings that suit their wider political objectives, in terms of their own supporters or constituents.

Similarly, if you have 43 indicators that you look at, the political response will be to say, “This policy delivers this massive improvement in indicators 41 and 42”, and neglect the rest. Within all this, you have inequalities. Even in indicator 42, for example, there will be a spread of people who do well out of it and a spread of people who do badly out of it. The average may be seen to increase, but that average may be increasing because it is particularly favouring one segment of the population. Persuade me that I should not be so cynical about all this.

Carrie Exton: You are addressing a really critical point here about the simplification that is necessary to make this work operational. There is essentially a technocratic solution, which is adding everything into a single number and then allowing the process of aggregation to determine the weighting structure, so you are effectively building a black box. One of the histories to the well-being approach is the idea of the need to go beyond GDP when measuring the progress of societies. There are three central pillars to the critique of why GDP, even though it is a really central economic indicator, is not particularly well designed for understanding people’s well-being. There are three elements to this.

The first is that GDP is not very good at capturing non-market outcomes that people value. That might be relationships, friends and family, leisure time or work-life balance. The second component is that GDP is an aggregate number. It does not say anything about the distribution of benefits in society. If you have economic growth, where does it go? GDP cannot answer that question. Finally, there is the sustainability critique. GDP is a flow measure. It does not look at a stock of wealth that supports well-being in the long term; it looks at activity within a given year. From an environmental perspective, but even from an economic perspective, GDP cannot tell you much about the sustainability over time.

Any system we put in place to complement GDP needs to address those three issues. Can we do all that in one number? The reason why we see a tendency towards dashboard, rather than aggregate approaches, is this weighting problem. Somebody has to decide on the weights if you are creating an aggregate. The advantage of a dashboard, in a way, is that it allows for the fact that different people will value these outcomes differently. It is the role of government and leadership to decide what preference to put against these outcomes.

If I take a very practical example, the New Zealand well-being budget, which I am sure we will get into later, set five priorities for government. There was a large dashboard of indicators that informed that process of prioritisation. The Government looked across this large dashboard and said, “Okay, here are our top five things where we want to see progress for New Zealanders”.

I would make a distinction here between the larger evidence base that informs decision-making versus the role of leadership and prioritisation, which is necessarily a politicised process. If we turn this into a numbers game and have these sophisticated aggregates, there is a risk that we are taking the democratic process out and replacing it with a bureaucratic, technocratic process. The reason dashboards are attractive is that you are trying to retain that balance between a clear statement of what you want as a society, and that ability to say, “Look, there are some trade-offs across this dashboard”. We need to talk about those openly. We cannot let statistics solve those trade-offs. We need to solve them as a society.

Lord Harris of Haringey: That is right and I am a great believer that politicians should be prepared to say, “These are the judgments we have made and this is the balance”. We all know from the experience of setting targets that they are gamed by those who have them. I will not go into the long history of that; you all know that. Similarly, if there is any sense of a black box, it is the algorithm that is behind it—that is now the fashionable word. I remember when Eric was distributing revenue support grant to local authorities. There were various things that could be tweaked by central government that had a huge effect on the money given to particular local authorities. There were good policy reasons for doing it. A slight adjustment in, say, the sparsity figure would have had a consequence.

Whatever way we use these measures and indicators, it needs to be open and transparent enough, so people can see where the judgments have been made. I believe in politics, so I believe that politicians should make judgments. The danger is that a greater investment is made in this as a mysterious process that is going to tell us what is happening. I can see some of the witnesses nodding, so clearly there is a feeling about that. I notice in particular Jan-Emmanuel nodding at that.

Professor Jan-Emmanuel De Neve: I really appreciate your question, because you are hitting the nail on the head. You will have seen all the four experts on this panel really impressed by your question. You are absolutely right. Let me put it this way: a dashboard approach, like the OECD well-being framework, is a massive step beyond what we currently have, which is GDP first and foremost, then cost-benefit analysis, all based on income. Everything gets translated into income. There is no question about this, but it suffers from some major issues, which you highlighted, and there is more than just the one you highlighted.

The one you highlighted is the weighting problem, which gives way too much arbitrary discretion to politicians to waive those aspects that they think will suit their purposes. There is another major issue with dashboards, which is which dimensions you choose in the first place. That is not something that you have highlighted. For example, the OECD framework has 11 dimensions. Why have 11? Why not add a 12th or a 13th? Why not reduce it to five as elsewhere, et cetera? It is top down, so it is up to politicians and experts to decide what seems to be making people happy. You have the weighting issue and the choice of dimensions in the first place, which allows for arbitrariness and political intervention.

What solves both questions, although it is more ambitious and perhaps not for tomorrow, but may be for the day after, is, as has been highlighted by Jen, thinking more about subjective well-being, ie not allowing for arbitrary approaches by experts or policymakers, and going essentially bottom up, rather than top down. This is exactly the rather revolutionary approach that the World Happiness Report has taken over the last 10 years, that is, not to have an index or a dashboard, but go straight to people and ask them whether they are satisfied with their lives these days, and to use that measure as the ultimate sovereign approach. Ultimately, who is to decide whether somebody is happy? Who knows better whether you are happy, Lord Harris, than you yourself? That is the logic behind this.

It also comes with its flaws. I would always argue, just like Jen was arguing earlier, that you want to complement this with other elements. At the very core, the ultimate KPI—key performance indicator—that does not suffer from either weighting or choices in dimensions would have to be the people’s own voice about how they feel about their lives. The beauty here is that the UK has the ONS data on life satisfaction since 2012, feelings of worthwhileness, and negative and positive emotions. That can really do the trick here, and it is the world’s best on this front.

There is another advantage of going to a single metric that is easily understandable, such as life satisfaction. It may be oversimplified, as Carrie may note, but it has the beauty of being a nice complementor and competitor to GDP or income, which is also a single measure that people readily understand. One reason why GDP and income are so successful is that they are single measures that everybody can relate to. GDP per capita is £20,000; that is more or less than what you earn, for example. It is something that people can relate to.

If you are working with 50 indicators, weighted by some weighted average, you get into very difficult grounds as a politician to say, “We have done better”—or worse—“for society”. If you say, “Life satisfaction in the country went up from 6.8 to 7.2 while I was in charge”, there are no questions being asked here. That is what it is. You are not trying to manipulate anything. That is what people have reported the quality of their lives to be. That is driven by the dimensions in, for example, the OECD well-being framework, but it in a way sits on top of it or is different. Philosophically, there is a difference here.

Q4 Baroness Benjamin: This is a question that occurred to me, hearing all the witnesses speak, and it is about the measurements. Are the well-being measurements ever broken down to focus on black, Asian and other minorities? The pandemic has exposed just how wide the gap is when it comes to housing, education, health and finances. Is there a measure? If there is not, should there be a special measure for this group to play catch-up?

Jennifer Wallace: Thank you for your question. It talks to one of my responses to Jan-Emmanuel’s point about the extent to which we have good-quality statistics from the ONS. A lot of the inequalities that we would want to attend to can be buried in those datasets, so we do not necessarily see the systematic inequalities that cut across them. There are two ways of addressing that. First, you can specifically have indicators for the gap. You can measure the difference between different groups in society and have that as your indicator. You could come at it that way. Secondly, you can do additional analysis to identify how different population groups are doing across the piece. Different ways of coming at it is the answer to the question. At the moment, our analysis is that it is not well done in the datasets as we look at them. Inequalities is an area that we would highly recommend gets developed at a UK level.

Q5 Lord Pickles: I want to ask a question about the difference between a dashboard and going straight to the people. As someone who used to commission lots of opinion polls at one time in my life, one thing you needed to guard against was the question you asked. Sometimes you ask questions and get answers because you frame the question in such a way for an answer that you desire. In the dashboard and in going directly to the people, how do you find a way to prevent either the politicians or the officials getting an answer that they want, or avoiding an answer that they do not want?

Marie Brousseau-Navarro: I will take the opportunity to respond to the three questions we have had so far. In relation to what is measured and whether it is too late, or how numbers mean different things, in Wales we have two sets of metrics. To influence decision-making, not measuring impact, we have the well-being goals. The well-being goals are a different set of metrics or aspirations, which are the outcomes we would like for Wales in 2050. Then we have 46 national indicators to measure impact for the nation, but which can also be used locally. We have completely different metrics for the two things. We also have well-being assessments at the local level to help with the granularity of understanding what occurs on the ground. There is the national level and the local level. The local well-being is also really important. I am sure we will come back to that later.

To answer Baroness Benjamin, we have a specific well-being goal on a more equal Wales. That is to make sure that equality impact considerations are taken into account in the decision-making process. This definition of goals has been done following a two-year conversation with people. That is how we are also taking into account what matters to people, because they were part of the decision as to what the outcomes for the whole country should be. I wanted to give you these examples in the discussion.

Lord Pickles: Is there any possibility that my question could be answered now?

Marie Brousseau-Navarro: Can you remind me? Sorry, I have forgotten what it was.

Lord Pickles: In essence, those who ask the question control the answer.

Marie Brousseau-Navarro: I have a very important point here as well. There are no statutory well-being impact assessments required by the legislation, but public bodies have experimented. Some have done them in an integrated way and others as stand-alone. They are published, so they are publicly available, which is part of your question. Our office is also in charge of supporting and challenging public bodies, so that is definitely something we are looking into. We are sometimes part of the discussions about challenges as to how the decisions have been made and how they have weighted the different elements. It is important to remember that, in Wales, the seven well-being goals are equal. In the weighting, you cannot let one goal trump the others.

It is a question of understanding what you are doing, but also how you are doing it. For example, the Welsh Government commissioned a metro system for the south of Wales. It was the biggest procurement contract in Wales. Public transport is driving some of the goals of reducing carbon emissions, helping the economy, helping people access jobs, et cetera. It was done in a way that maximised contribution to the goals. They also provided for health, with access to active travel in the metro system. They made sure that there would be mental health champions and mental health emergency workers in place. There would be green infrastructure to help with biodiversity and active travel for health reasons, again. There would be the involvement of artists to decorate the local stations. New stations were added to help people who could not access jobs in the process. It is what we do and how we do it that is weighted against these seven well-being goals in a transparent manner, with an organisation, our office, to help challenge and support at the same time as it is being done.

Carrie Exton: The OECD spent the last 10 years doing a lot of work on the measurement of well-being. Lord Pickles, you are right that how you ask the question matters. Like all self-reported measures, subjective well-being is sensitive to the methodology. In 2013, the OECD wrote some international guidelines on the measurement of subjective well-being, the goal here essentially being to make sure that all statistical offices across the OECD are asking the same question, framed the same way in the survey, to try to control the variability associated with the different ways of shaping the question. We have done this for subjective well-being. We have done this for trust. We have done this for the quality of the working environment.

We have also done it for things such as income, consumption and wealth. To the extent that these are self-reported in surveys, how you frame the question really matters for the responses you get. This is not in any way unique to subjective well-being. Even unemployment measures require the respondent to indicate whether they are available for work in the next two weeks and whether they have been actively looking for work in the last four weeks. Those are subjective assessments. They are of objective phenomena, but many of our statistics rely on self-reports, so we need to be really mindful of methodology here. It is something in which the OECD has been really investing over the last 10 years.

To address Lord Harris’s point about gaming, performance measurement and target setting, this is really important. For me, this comes back to the emphasis on the final outcomes of interest, the things that people really value. The goals you set need to be high-level enough that you are looking not at the inputs or outputs of government, but at the final outcomes that people have reason to value. To take an example, on health you might look at how you maximise life expectancy, not focusing at the granular level on things such as the number of hospital beds.

I recognise the issue with performance measurement, but we can look, for example, at the child poverty targeting that is done in New Zealand. That can be very effective. It is effective at the final outcome level, not at the intermediate stages. It is the intermediate stages that are very vulnerable to gaming.

Q6 Baroness Jay of Paddington: Thank you all very much, particularly for the initial response to Lord Harris’s question. Like him, I am somewhat of a cynic about this whole area. Can I press you a bit more on how you would choose between policies if you were a Minister, say, on this basis that you have described? I understand entirely about the concept of national well-being and, indeed, that contrast with individual well-being. If you were a Minister and were looking at certain specific policies, how would you deal with it then? The old cliché is that to govern is to choose.

Look, for example, at two current policies: the defence review that has been announced recently; and the high-speed rail link between London and the north. How would you judge those in terms of developing policy, not retrospectively looking at outcomes? How would you deal with them on the sort of matrix that you have described? The example was given at the beginning, I think by Jan-Emmanuel, of furlough schemes. That is pretty obvious. You do not need a very complicated matrix to think that that would contribute to people’s well-being. We can all identify vast numbers of policy decisions where you are trying to make a choice between what you should do and what you can do. I am not sure what the relevance of these dashboards on the complexities of numbers or, indeed, broader concepts would be.

I would like to start with Jan-Emmanuel, because he used the furlough as an example of a policy where you could make these judgments. There are the two examples that I mentioned about high-speed rail, where you could see different well-being impacts for whichever groups of constituents or populations you were talking about, and the defence review. How would you judge those if you were making choices as a Minister in policy development?

The Chair: Jan-Emmanuel, you have been given a big promotion, or maybe not in your eyes.

Professor Jan-Emmanuel De Neve: Thank you very much for this excellent question. It goes right to the heart of policy-making. I am sure none of our responses will fully do it justice. After all, the Green Book by the Treasury spends many pages trying to get to the bottom of this. I want to make one point very clear. While the furlough scheme, when it was developed, probably had people’s well-being in mind, whether individual or social, do not forget that there was a huge cost attached to this.

The opportunity cost of the furlough scheme is massive. The billions of pounds that were spent on it could have been spent on something else. It is not as intuitive as it seems to spend billions of pounds on the furlough scheme. You have to weigh it against other things you could have spent it on. The budget is limited, so the pie needs to be split one way or another. Whatever you propose, even things that seem intuitively right need to be accounted for on a cost-effectiveness basis, hence the importance of development and assessment.

Your question about the big railway or defence is, indeed, more interesting. That seems less intuitively appealing from an individual social well-being perspective. You will be pleased to know that well-being science can be helpful on this front as well, and not just cost-benefit analysis. That is for the simple reason that physical security, law and order, matters greatly for people. Whether your country is safe or you are feeling safe when you walk around on the streets of London at night matters greatly. If that is not there, all the rest falls to pieces. There are lots of coefficients.

For something as big as national defence spending, you might want to look at how differences in national defence spending across the world’s countries reflect or relate to differences in general well-being across these populations. You will see there is probably a correlation one way or the other that you can use as a coefficient to try to see to what extent this is positive or negative.

The same thing goes for something still big, but somewhat smaller, the train connection to the north, which is also a very expensive affair. The question then becomes to what extent this will improve well-being. There will certainly be lots of well-being benefits, for example cutting the psychological cost of commuting and connecting the north and the south. All this has lots of positive implications for well-being. The larger question arises: the opportunity cost. For that price point, what else could be done? Could the other proposals perhaps be more effective in raising well-being?

Here, I have to quote my mentor, Lord Layard, who would say that maybe social infrastructure has bigger well-being returns than the physical infrastructure of the train connection that is being proposed. All this is an empirical question. A WELBY approach to this particular policy formulation could be really helpful in seeing the extent to which that train line can raise well-being, at what cost and how that compares to other projects that could also raise well-being at perhaps an even higher or lower cost.

Jennifer Wallace: I wanted to stress that we are very good at assessing economic outcomes within an economic domain. We can understand money in and money out. The challenge we have when we are trying to assess different aspects of well-being is making that money-in calculation for other things coming out. The example that I know best is about early years and investing in the earliest point in children’s lives.

We are at a point with the social science where you can begin to make those calculations and they are beginning to come into policy-making. We still come up against a prejudice, where we think the predictive analysis of economics is stronger than the predictive analysis of other social statistics. That is what we are trying to mine here: how can we better understand? As Carrie was saying, all these things are subjective. There is bias endemic in everything and we need to interrogate why we privilege the economic in these decisions.

Q7 Baroness Morgan of Cotes: Jennifer, let us carry on with that, because that is a really good place to start my set of questions. I am going to ask about UK Government policy-making. Then the next questioner is going to ask about the devolved Administrations, so, Marie, we are going to come to your experiences in Wales, which are very important.

Jennifer, can I perhaps ask you to expand on that? Do you think that well-being was even on the table as a discussion when the furlough scheme was designed? Taking your thoughts further, within the UK Government, is there already an ability to measure the well-being impact of policy development? I want to ask Jan-Emmanuel about the Green Book, but you might want to touch on that as well. If not, what would need to happen next so that they did start to measure well-being better, rather than just the economic in and out?

Jennifer Wallace: I will carry on with the analysis. Yes, intuitively, that was what was on everybody’s minds: how can we protect people in that widest sense with the furlough scheme? Where I would offer a critique is that I am not convinced about the extent to which there was evidence within there. While there is evidence to support what they did, I do not think it was an evidence-based decision. It was based on a sense that this might be the best thing to do. You see that across the board.

Carrie’s original point about the research base is critical. We are at a stage, after 10 years of mining data on well-being, at which we can offer a lot more to the policy-making process. The processes for engaging with that are limited, so our ability to provide evidence into the policy-making process can be stilted. It is often based on relationships. It is often based on whether you have been on a list before to be asked to give evidence, and so forth. We can do a lot more to open up that process of policy development to a much wider set of evidence about what would contribute to well-being.

That still leaves you with the fundamental issue of how you compare and contrast across different domains of well-being. How do you decide to invest in a road versus investing in early years? That is where we come down to the common-currency argument. We have a lot of debate at Carnegie about the extent to which a common currency—whether everything is translated into percentage points of life satisfaction or a monetary unit—is a good idea. We have a lot of queries about how you would do that in a way that would attend to equalities. The truth is that that is probably the best way to intervene in the current sense of how we make decisions in this country.

While we have concerns and caveats, being able to say, for example, “If you invest in the early years, you would save X amount across the life course for our most vulnerable children and that has a monetary benefit to the public purse”, is one of the easiest ways to make that conversation real for people who have to make a decision. Then they can compare and contrast between different domains of well-being. It is capital investment versus human investment, for example. Where are you going to get the biggest bang for your buck on that? There is a lot more that could be added into it.

As I say, I still have concerns about that driving everything. Elements about how you actually attend to inequalities are critical. From our perspective, these assessments on equalities or environmental impact come far too late in the day. Decisions are almost made and then it is cross-checked, rather than being much further upstream in a pre-scrutiny stage. We think there is a lot more you could do about pulling that conversation up into policy development and opening it up to a wider set of knowledges.

Baroness Morgan of Cotes: Are there any particular examples of where this has been or is being done? Are there any particular departments that are good at it? I was thinking particularly about the Department of Health and Social Care, where there is the QALYs system—quality-adjusted life years—which is based not just on economics but on the quality of life. Is that an example that could be adapted for the rest of government?

Jennifer Wallace: That is partly what Jan-Emmanuel was talking about, well-being-adjusted life years, conveniently called WALYs, and whether there is a way of doing that. I am arguing that technically you might be able to do that, and it would be a significant improvement if you were able to create a high-standard WALY, but you would still want to supplement that with future generations and equality concerns. Without that, it could lead you into decision-making that furthers the inequalities that, ironically, we know affect our well-being and collective well-being, but in such an indirect way that it does not necessarily come out through a WALY.

Baroness Morgan of Cotes: Jan-Emmanuel, perhaps you could say a bit more about the WALYs. Could you also say a bit more about the Green Book and what is already potentially happening in Treasury or other bits of government? What more might need to happen if they were to adopt the WALY approach? It might need to be renamed.

Professor Jan-Emmanuel De Neve: Thank you, Jen, for your comments earlier. It is nice to be able to build on one another. The proposal in the British Medical Journal is WELBY, not WALY: well-being years, rather than well-being-adjusted life years. As you rightly pointed out, it is the exact same approach or concept as the QALY, the quality‑adjusted life years, which are prevalent and so important to being able to assign medical treatments within the NHS, within the context of limited budget resources. The WELBY approach is exactly the same approach on a larger, broader scale, well beyond just the Department of Health and Social Care, but for all departments, allowing for the holistic approach that Carrie mentioned right at the beginning.

There was an important update to the Green Book in 2018. It now says that economic assessment is framed as how the Government can improve social welfare or well-being. There is a lot of work being done by the What Works Centre for Wellbeing, which is important to mention as well here. It serves as a bit of a platform for translation between the scientific world, the community organisations and the policymakers, because it is partially funded by the Government, including the Department of Health and Social Care, I believe.

Jen rightly pointed at this as well. The Green Book still functions in terms of money, first and foremost. To what extent can you translate well-being impacts into what we call their income equivalent? The income equivalence approach is interesting, for the reason that Jen noted. Traditional cost-benefit analysts suddenly see the impact of something that is normally hard to quantify in monetary terms, for example loneliness. If you have a policy that will reduce loneliness, how do you put money on that? One way is to ask, “If you could reduce loneliness by X%, what would be the equivalent monetary benefit to that person to have the same impact?”

That is a big step forward. That is what the Green Book so far has proposed. It still suffers from one major philosophical concern, which is that ultimately the aim here is to move beyond GDP and income. What are we doing? We are now turning well-being back into income. Is it not meant to be the opposite? The WELBY approach here is better in that regard, because at least we move beyond GDP and income, rather than trying to turn it around.

There is also a methodological issue with the income equivalence approach. As you may know, increasing people’s money or taking money away from them does not have that much impact on their well-being as such, especially at higher levels. The income equivalence approach is incredibly sensitive to the coefficient of the link between income and well-being. That tends to be very low. The result of that is that anything that improves well-being in terms of monetary values becomes massive.

For example, policies to reduce loneliness and improve well-being more generally are suddenly worth a lot of money, if you take the income equivalence, to the extent that it becomes slightly absurd, not that relevant to policy, or so high it is off the chart. That is why the WELBY approach, which as Jen has rightly pointed out we coined as a common currency that works well across departments, can be a solution that avoids that particular problem of being too sensitive to the income coefficient, which tends to be low for well-being, especially at higher levels, if you are beyond subsistence.

Baroness Morgan of Cotes: My final question is to Carrie, but others might want to jump in. We started this session without really standing back and asking why well-being matters and why society should value it. I have read Richard Layard’s book on happiness, but why should we not focus on just GDP and income? Is everybody having more money not what we ultimately want? I wondered if the OECD has a view on that, Carrie.

Carrie Exton: Money absolutely is important for well-being. All the evidence we have suggests that a household’s economic situation really matters and that people value it. What we are trying to do with well-being is move away from the means to the ends. A strong economy is a very important driver of people’s well-being and we have to recognise that, but it is a driver. It is not a goal in itself.

Our work on well-being has been informed by a very long academic history on the advantages and disadvantages of focusing on single metrics, such as GDP, for understanding the progress of societies. As I mentioned before, there are three main things that GDP cannot do and we therefore need to complement it with other indicators. Those are non-material aspects of life that people have reason to value, sustainability and distribution or inequality.

Any dashboard that is going to complement GDP needs to address these three concerns. Fundamentally, it also needs to have the outcomes that people value at the centre. That is why so many of the well-being dashboards developed in OECD countries have been informed by extensive public consultation. I would emphasise that the UK ONS measures themselves were developed from an extensive consultation, which went out to the public and to knowledgeable experts, and asked, “What matters most? What are the outcomes of value?”

I would emphasise this focus on outcomes rather than outputs, precisely because of the issue of performance setting, targeting and gaming. You really want to know what kind of society we want to build and what kinds of life outcomes the Government want to deliver for people. That is taking a real step back from the granular issue of specific outputs that the Government deliver on a daily basis for people.

We have a strong emphasis in the OECD on the quality of growth and not just the quantity. A lot of our analysis is still looking at the question of growth, but it is growth for whom and for what. Who benefits from the growth and what does growth deliver for people in terms of well-being outcomes? At the end of the day, we want to improve lives and not just build a strong economy.

Baroness Morgan of Cotes: Thank you very much. That is very helpful. Yes, Jan-Emmanuel.

Professor Jan-Emmanuel De Neve: Apologies, that was not a hand; that was applauding Carrie. I would not be able to say it any better than she just did.

Let me add one single point. To Carrie’s point, this is precisely the reason why well-being economics came to the fore. We had all this growth and then, when we were looking at the well-being statistics, including subjective well-being, people’s quality of life as they rate it themselves, we found this rather stark result. We had a tripling of GDP per capita over the past two or three decades, yet people’s satisfaction with life had not been improving. That is the case for lower levels of GDP per capita, but, after a specific point, growth for the sake of growth no longer translates necessarily into greater well-being. That is a critical moment.

In richer nations you see a push for thinking beyond GDP, and in developing nations you see much less appetite for this. Jeffrey Sachs and I had a paper in Nature last year, where we made this point very clearly. You find that more qualitative, inclusive and sustainable growth is less relevant for the well-being of emerging markets and developing nations, but it is critical for nations that are well beyond the $20,000 GDP per capita mark, in which case you need more inclusive, sustainable, well-being-oriented growth for it to translate into a better experience and higher quality of life for people. Just growth for the sake of growth is not going to cut it any more.

Q8 Lord Alderdice: Thanks for the very interesting conversations we have been having so far. I could well be tempted to probe further into the whole notion of well-being, but I am going to hold myself back on that for the moment and pick up specifically on the question of the approaches that the Governments of Northern Ireland, Scotland and Wales have taken. We have been talking about the UK Government with a particular focus on England, but Northern Ireland, Scotland and Wales have their own Governments, who address many devolved issues that are important for well-being. I know that, Marie, you have looked at Wales in particular from your job, but I wonder if you have any comments to make on what we may be learning or what pilot exercises are being done in Northern Ireland, Scotland and Wales.

Marie Brousseau-Navarro: I will focus on Wales, but we have a close relationship with Scotland. There are discussions, as you may know, where the SNP is looking to maybe introduce equivalent legislation in Scotland. It is interesting to flag that our legislation, which is a world pioneer, has a lot of traction. The pandemic has shown its relevance and how useful it can be in tackling issues of the short term and the longer term together.

In Wales, we have legislation that introduces a statutory duty for all public bodies to carry out sustainable development. Sustainable development is defined as a process of improving the economic, social, environmental and cultural well-being of Wales. These public bodies must also take action in accordance with a sustainable development principle that is aimed at achieving the statutory well-being goals. There is a whole architecture and I have sent you a little diagram that shows the different elements, because it is quite a sophisticated model.

It is really important, as I was saying, that everybody seeks to achieve these common goals. These goals do not come from nowhere. They are based on the UN SDGs, so it is a very clever mechanism to report against the UN targets, as well as our national ones. Another very important thing about our goals is that they were developed with the people of Wales as part of a national conversation. Baroness Morgan was also asking why well-being matters. It is really important, because that is how we regain some of the citizen engagement that we have lost by focusing only on growth and wealth. It is a mechanism to bring people back on board with us.

Then each of these public bodies must set its own well-being objectives, which will contribute to these goals. Baroness Jay was asking how you choose policies. That is how you do it. You look at your well-being objectives and which of the policies you are contemplating will help you maximise your contribution to your objectives and, in turn, the goals. There is also a duty for them to take all reasonable steps to meet those objectives, so you see it is quite strong legislation. That is why it is often said to be very ambitious, but that is not all it does.

It also forces public bodies to think long term, within the concept of sustainable development principle. The actions that these public bodies must take should not compromise the ability of future generations to meet their own needs. The legislation also requires public bodies to collaborate. It recognises that the challenges we are facing as a nation, such as climate change, poverty and inequalities, cannot be answered by bodies working in isolation, so there needs to be collaboration, which is in the form of public services boards. The public services board must first assess the well-being of its locality before it can produce plans or objectives for the area. In turn, public bodies are expected to align their objectives with the collaborative regional objectives.

How successful has this model been so far? After a slower start, we can now see an acceleration of progress. The Covid pandemic has shown the importance of the Act and wider well-being. A Senedd committee recommended last week that the Act be used to start all the recovery plans in Wales. The Welsh Government have been using the Act to do exactly that with their economic resilience and reconstruction mission and their manufacturing strategy, which was published last month, with a focus on well-being economy and using the national well-being indicators to assess the progress of the plan and the strategy.

In general, we have seen a shift in focus by the Government. They have used the Act, for example, to recast completely the land use planning system of Wales, where now all the planning outcomes are designed to achieve each of the well-being goals. In relation to transport, we have seen a very clear shift away from roads in favour of low-carbon public transport and active travel. We have just seen, for example, the Welsh Government refusing funding for a scheme in the Vale of Glamorgan because it was not aligned to the Act and its new guidance.

Then there has been a new waste strategy with a specific impact assessment against the Act. It demonstrates how clearly the policy will help achieve all the goals by focusing on the circular economy, a zero waste and zero carbon commitment by 2050, and working specifically with local communities. The Welsh Government have also developed a budget improvement plan, which is very important and seeks to improve budget processes using the Act and the five ways of working. This will help them consider, for example, the long-term benefits of their decisions, preventive spending, and the carbon and biodiversity impact of their spending decisions. I could go on and on.

On the local level, we have seen a similar shift. For example, Cardiff Council has been working with public health to redesign its transport strategy. That was in order to address Cardiff’s biggest challenges, which are air pollution, congestion and obesity. They linked them together, worked with health and came up with very different solutions. Powys Council has focused its local development plan on the concept of a 20-minute neighbourhood, seeking to achieve all the goals.

We are also seeing the emergence of longer-term thinking with, for example, Hywel Dda Health Board producing a 20-year vision, and Powys Public Services Board setting a vision and a plan for Powys 2040, including serving future generations. Our website and all our reports contain a multitude of these examples at different levels of government in Wales.

I will finish this part of my evidence by citing a Senedd committee, which published a report last week on the barriers to implementation of our legislation. It said that it was struck with the buy-in to this ambitious Act, and the desire of public bodies and other stakeholders to make it work. It said that this ambition seemed even stronger now, given the potential for innovation in the recovery plans. We have seen increasing interest from many countries around the world and, latterly, we have been in talks with Italy and Germany. The committee concluded that the Covid pandemic had shown the importance of working together, across policy areas, and the need for prevention.

Lord Alderdice: Jen, you have done quite a lot of work on the devolved Administrations in Wales, Scotland and Northern Ireland, so you might be prepared to pick up on this. Maybe you can pick up on the problem, particularly perhaps in Scotland and Northern Ireland, that there is not a single view of what is the good for the future of the community. There are some very definite differences of view.

Jennifer Wallace: For the past 10 years, Carnegie has been working with the Scottish Government and, since about 2013, with the Northern Irish Government exploring well-being as an outcomes-based approach to government. It has been fascinating work and I have been really excited to be part of it.

There are a couple of general statements to make. First, the Scottish approach started in 2007 and was not originally connected to the beyond GDP or sustainable development goals conversation. It was a conversation about how to improve performance management for outcomes for Scotland. Northern Ireland, similarly, followed that. The challenge that those Governments were trying to address was the one of how to improve well-being across the life course for our populations during a period, if you can cast your eyes back to the noughties when there was enough money to go around, in which investment was going up but people’s lives were not improving. That was the challenge that they were trying to address. What is it about the way that we deliver public services that is not translating this investment into improvements in people’s lives?

They come at that from the perspective of trying to position it above departmental silos, so that if they can say that there are diminishing returns on a GDP-based approach to government decision-making, there are also diminishing returns on a silo-based approach to delivering public services. For much of the 70-odd years of the post-war welfare state in the UK, looking within education, health and housing to improve well-being had dramatic effects on the outcomes of people’s lives. We can all see that in the statistics and the change over that period, but it has stopped working so well.

Part of the reason it did so is that there is a group of people who do not operate well within that system. The solutions for them are about joining up, keyworkers, prevention and seeing their lives in the round. That is where you begin to see parallels with, as were talking about, what well-being actually is. We know that the way we deliver public services fails the same people over and over again. We need a challenge to how we think about public services in order to better meet their needs. That is the challenge that Scotland and Northern Ireland were trying to come across.

On the other challenge that Lord Alderdice suggested, in Scotland, Northern Ireland and Wales, we have coalition Governments, by and large. It has to be a coalition in Northern Ireland. It was meant to be a permanent coalition style in Scotland, but you will know that has not quite worked out. The approach was to try to find something that sits at a level of politics above the debating chamber: the things we can all agree on. That is where you get these outcome statements: “We want all our children to grow up healthy. We want everybody to be able to achieve their potential”.

In Northern Ireland in particular, where there are big differences and very sharp divides in what people think of as the best for their community, we found that they could still agree to those outcomes-based statements for Northern Ireland as a whole. They would not say they do not want people from a different part of the community accessing good education. They want everybody to access good education. They just interpret that within communities as allowing a sense of difference within it.

This gets back to the role of politics and of the statistics, the technocratic and the mass participatory outcomes that you might get. You then see a space for active politics that sits below the level of the core outcomes. Well‑being is the outcome. We all want good health, good housing and to live in a community that respects us. Underneath that, the politics sits in how you do that and how to achieve it. We found in both Scotland and Northern Ireland that people could get around those tables and have far better‑quality conversations when they knew that they were talking about how to get to that outcome, rather than starting from a place of entrenched views. That was really important.

On long-termism and moving discussions away from one financial year or one electoral cycle, some changes have been made, but that is still very much a process. It has not been resolved. Northern Ireland, as you know, had a three-year gap at the executive level. With a gap in government, it was quite hard to make the changes that they wanted to over that time. They are currently consulting again on the new outcomes. They have gone down to nine outcomes and probably about 50 indicators sitting under those nine outcomes. That will be part of their programme for government.

What can we say about the difference between Scotland, Wales and Northern Ireland and what we see at a UK level? It is really about the policy infrastructure. Yes, you have the dashboards. Everybody has a dashboard, but in Scotland, Wales and Northern Ireland there are systems for connecting those dashboards and that vision for well-being into the policy-making process and following that through, whether by policy appraisals or, in Northern Ireland, by the programme for government, in order to see the golden thread and the connections. The core argument for Scotland and Northern Ireland is that, by following that golden thread, you can begin to jump across departmental and professional boundaries in order to find policy solutions that would improve the lives of those most in need.

Lord Alderdice: Lord Hain has a particular interest in Wales but also, of course, in Northern Ireland, having been Secretary of State there, so he may wish to pick up one or two issues.

Q9 Lord Hain: It has been fascinating evidence. I am very interested in outputs and what happens practically on the ground, as a result of this policy infrastructure and all the detailed work on definitions, concepts, visions and so forth. I wanted to ask Marie—but Jennifer and others may want to add to it—specifically about practical things in Wales. You have touched upon them, but they have been more macro. I know, for example, that doctors in Cardiff issue prescriptions for bike hire to their patients who need, in their judgment, more physical activity. I understand that, in Brussels, the city administration has a 350-unit project for intergenerational homes, where older people, to avoid loneliness, encourage a young person to have a room in their home. Are there any other practical examples of this otherwise admirable theory?

Marie Brousseau-Navarro: There are really a multitude of them and, again, I refer you to many of our reports. In every single report we have published, we have covered these examples. Let me give you a few. The South Wales Metro is a very important one. Not only will we have a metro but the features that metro will include are really important, so mental health support, liaising with the arts and green infrastructure to help biodiversity and decarbonisation. The trains will be produced locally, so that helps the local economy with apprenticeships, et cetera.

Lord Hain: What is green infrastructure?

Marie Brousseau-Navarro: For example, they will put permeable paving around all the stations. There will be turfed roofs. Along the tracks, there might be other forms of green infrastructure to connect biodiversity together. As another example, in Swansea, to help the homeless population during the pandemic, they have taken hundreds of people off the streets to rehouse them, but for the longer term, working on a programme of energy-efficient houses and helping with that. We have seen examples of museums working together with stations or in the design of communities.

There was a very important decision on spending. The Welsh Government have adopted a definition of preventive spend. That is another very important consequence of the Act. I could give you loads of examples. What is really important is to see the shift in thinking, in what matters and in how things are done. It is about trying to find a multitude of benefits, so how you do things now has to work across all the pillars of well-being. For example, when the Welsh Government are looking at decarbonisation, they will test all their decarbonisation policies against the four pillars of well-being as well. They will not only reduce emissions but contribute to each of the goals.

Lord Hain: That is fascinating. If you had time to give us a written statement on these practical examples, in the way that you have described, that would be really helpful.

Marie Brousseau-Navarro: We have very easily accessible designs, where we take the policies and show how they contribute to each of the goals. I am very happy to send those to the committee if you want to have a look at them.

Lord Hain: Thank you.

Q10 Lord Pickles: This question has been partly answered with regard to the various nations that make up the United Kingdom, but I would be quite interested in hearing where well-being has been used internationally to improve the well-being of the country. As a straightforward subsidiary question, is it all sunlit uplands or have some attempts at well-being failed and made the situation worse? Probably, it falls to Carrie to initially answer this.

Carrie Exton: I will have to be quite diplomatic in answering the last part of the question. Again, we have seen very many OECD Governments take important steps in developing metrics and frameworks. The useful thing to emphasise in this conversation is what practical mechanisms Governments have been using to integrate that evidence into their decision-making. This area is still fledgling. We are seeing practical experimentation and examples. Some of it is very bold and some of it is quite piecemeal at this stage, to experiment and see what works.

To highlight a couple of the big mechanisms, before I go into one particular OECD country in more depth, generally, one area that is targeted is the budget process. We have seen France, Italy, Sweden and New Zealand all target their well-being dashboard approaches towards the budget in quite different ways. Another area of strong emphasis has been national development plans and performance frameworks. We have heard about Scotland. Slovenia, Paraguay and Finland are all countries where these metrics have been built in concrete ways into that visioning, but also into how to know, practically, whether all this effort by government is delivering results for people.

Another mechanism is institutional structures. We have heard about the Future Generations Commissioner for Wales and the What Works Centre for Wellbeing in the United Kingdom. There are other examples of government secretariats being formed to take leadership responsibility for the Civil Service capacity development. On that front, we are also seeing new and updated tools for civil servants. We have heard about the Green Book in the UK. The New Zealand Treasury has been doing a lot to support its government agencies in implementing its own well-being approach.

Perhaps I might take a couple of minutes to go into the New Zealand approach in more depth, because we are asked about it a lot. I have done some work on it with the New Zealand Treasury, because the OECD was asked in 2019 to review the New Zealand Treasury’s approach to well-being. It is important to say that, again, it builds on very strong foundations. Although it is a recent Government who have said, “We want well-being of New Zealanders to be the priority that drives our decision-making”, it builds on a very good data infrastructure at Stats NZ and across the Government within New Zealand.

It builds on a multidimensional view of well-being called the living standards framework, which the New Zealand Treasury has been developing for a decade now. It also builds on bodies such as the Social Investment Agency within the New Zealand Government, which has been tasked for many years with taking a long-run view on the returns to government investment. There is a strong foundation there.

The latest Government have looked at many elements of policy practice, priority setting, appraisal of policy options and changes in legislation to embed this process. One of the most visible steps that they took was the 2019 well-being budget. Here, again, well-being evidence was weaved in at many stages of the process. The living standards framework dashboard is a monitoring tool that gives a big picture of the evolution of well-being in New Zealand and helps the Government look at where the weaknesses are. From that evidence, the Cabinet got together and set five well-being priorities. It took in evidence from, for example, government chief science advisers to help shape that discussion, but it was using this broad set of evidence to come up with a set of priorities. There was a really strong emphasis on collaboration—this issue of improving not just what you do but how you deliver policies. There was a strong emphasis on giving priority to budget bids that force collaboration across government agencies.

The last element of this, which is much more technical, is how the Treasury assesses the spending proposals it is given by different agencies. This is where the capacity building becomes central, because the New Zealand Treasury had to set out for agencies how to do a well-being analysis of a budget proposal. There is very detailed guidance for agencies. There is a cost-benefit analysis tool that enables a monetary assessment, if that is relevant, but the New Zealand Treasury is also quite clear that its approach to cost-benefit analysis is much wider and not just monetised. There was a real effort to articulate in practice what it means to make a well-being assessment of a spending proposal—“how do we then weight these up as a Government?”

In terms of the substantive policies that came out of that, we saw a big cash injection for mental health and child well-being, a cross-government 10-agency collaboration on addressing family and sexual violence, efforts to boost particular funding in hospitals, schools and public transport, but also work on sustainable land use and the protection of fresh water systems, based on known threats to New Zealand in that regard.

I hope that gives some practical examples. I am happy to go into a little more detail on other countries, but I have picked New Zealand because it is one of the areas I know better, and it has this very visible approach which people often ask about.

Lord Pickles: There was a second part of my question, which you said you had to be diplomatic about. You do not need to name names, but we need to receive some warnings of perhaps where the sunlit uplands turn into the boggy bottoms. Where have things gone wrong? Where have people made mistakes?

Carrie Exton: We have definitely seen ebbs and flows of interest in well-being. There are one or two Governments who have developed extensive well-being dashboards, before their leadership has decided that that is no longer an investment it wants to make. We have seen Governments make progress on measurement and then not follow through with the policy side of things.

One of the biggest dangers is politicising this. I am not particularly naming names but, when this approach becomes associated with a charismatic figure or a particular political agenda, politics shifts. What we are trying to do with well-being is deliver long-term better outcomes for people. That would be my main message: let us not make this about politics; let us make this about better policy-making. The goal of the OECD’s work on well-being is about trying to improve the evidence base on which policies are delivered. The main risk, in a sense, is if this all gets too politicised.

Lord Pickles: Is the risk that timid is best and that bold well-being initiatives that do not have universal agreement cannot be pushed through? Is that what you are saying?

Carrie Exton: We are seeing a lot of very positive experimentation with measures. Something else I did not mention before was gender budgeting and green budgeting, which are elements of well-being that are now being implemented on quite a wide scale. In 2018, there were 17 OECD Governments doing gender budgeting, for example, which is a good way of trying to encapsulate what it means to look at inequalities within a budget process.

It is really important that you get universal buy-in. That is genuinely one of the big challenges. I know that the role of government is compromise and you are never going to make everybody happy, but you need to bring everybody around the table and get broad agreement on the outcomes that matter, even if, as Jen was saying, there can be a wide debate on how you achieve them.

Jennifer Wallace: I am not quite sure that I would say it is a failure, but one of the biggest risks that we have seen in Scotland and Northern Ireland is that of running two systems at the same time, so the well-being approach is bolted on to the pre-existing new public management approach to governance. You then get mixed messages, so you get the message that targets matter, and that things are going to be commanded and controlled through a system and an outcomes-based approach. While you can have nice rhetoric about outcomes, because so much of our policy infrastructure is still developed through that new public management approach, quite often it does not turn into reality.

Our concern for both Scotland and Northern Ireland is that, if we do not start seeing those big ticket benefits, such as the ones that Wales has progressed on, politics moves on to the next big thing and a different conversation takes hold about what we need to do. From our perspective, there are some fundamental things that you can do with the well-being approach that would be of benefit to Governments, whether they are local, devolved or UK level. That issue of running two systems in parallel is quite problematic for giving the messages about what really matters in decision-making, so that is the one that I would tackle if I was able to.

Marie Brousseau-Navarro: The experience in Wales so far has been positive, as you know, but we have noticed that, once you have all these outcomes, they need to be supported by the funding governance and performance management frameworks. We are very fortunate that we have been able to agree national outcomes; it took a two-year conversation. But we have found on the ground that, if you do not change the whole system, there can be barriers. For example—it has been corrected now; we worked on it—we found that to access housing funding from the Welsh Government bodies or people bidding for that funding had to demonstrate how they would contribute to only one of the well-being goals. That was undermining the idea of it being holistic.

It is important to act on the funding governance and the performance management underneath. If the assessment of the performance and success of initiatives is short term, within one-yearly budget frameworks, et cetera, you will lose some of what you gain with the wider concept of well-being and everything you do upstream.

Professor Jan-Emmanuel De Neve: Let me second and echo what my colleagues have just said. I wholeheartedly agree with everything. I have a quick compliment on the New Zealand experience and then an experience that did not go well. I am perhaps less bound by the diplomatic challenges that Carrie is facing.

On the New Zealand experience, I also had the pleasure of working with the Treasury and the Minister of Finance in the run-up to the first New Zealand budget in 2019. Carrie rightly pointed out the importance of the processes and how long this was in the making. I think you would be interested to also hear a little more about the outcomes of it and what it entails in terms of budget.

As Carrie rightly pointed out, the biggest ticket that came out of this analysis was mental health. In pound equivalence, it was close to £1 billion extra. For as small a nation as New Zealand, that is a massive investment, but they were struggling massively, and probably still are to some extent, with mental health concerns and suicide. That was the biggest outcome of this exercise.

The second was reducing domestic violence. Reducing child poverty was the third. There was climate action, as Carrie noted, and then something that is close to my heart, which is working on the transition of low and medium-skilled workers towards the future of work. As we pick up in our data, our societies are riddled with anxiety about the future of work. A lot of people in the workplace currently are not that excited about what the future of work entails for them. That is already picked up today as an anxiety, even if the future of work is still perhaps around the corner for many.

The New Zealand Government, through their well-being lens, have also allocated money to start that transitioning and reskilling of a whole host of people, to anticipate some of the impact that the future of work will have. The fifth item is Maori integration, which is perhaps less relevant to the UK. There was a lot of work done there as well.

The important point to make is that, from a traditional perspective of cost-benefit analysis, income and GDP, these five dimensions would not have been worth investing in, because none of them has a direct impact on GDP. Yet, by integrating well-being and a well-being lens into policy-making, these five really important dimensions of life got much more attention than they would normally receive in traditional budgeting.

On to a country with less success, it will not be named, but the message remains the same. It is a country that put out a lot of public relations and spin on the importance of well-being and happiness. There were lots of press releases, experts and conferences, but it never became part of the DNA of the policy processes. In fact, everything was outsourced to consultants on this front, as a result of which it is essentially being demoted at this very moment and is no longer relevant to them. That is perhaps a point to be raised, so it needs to be part of the processes.

Q11 Baroness Chisholm of Owlpen: This has been a fascinating couple of hours, I must say. I thank all the witnesses for really giving us some very interesting ideas for the future. We heard about how future policies must embed for the future and not just the present, and how we had to have an integrated approach, looking at people’s lives in a holistic way, so everyone was included.

We also heard how, during the pandemic, one thing that was shown to be good for well-being was the furlough, and how that had made everybody far more relieved about the future. As you know, our committee is looking two to five years ahead, so I would like to ask each of you what recommendations you would like to see the committee make to the UK Government in relation to the well-being measures in future policy. Has the pandemic shown us how we could make some changes that it has thrown up?

Carrie Exton: Again, we have touched on this issue of integration of evidence. Covid has highlighted the need for integrated evidence that is multidisciplinary. Having separate streams of scientific advice versus economic advice versus social advice is not conducive to good policy-making. You cannot think of, for example, statutory sick pay without thinking about the impact it has on people’s behaviour and then the long-term epidemiological consequences of that.

There is a need for a government body whose role it is to integrate all these streams of advice. Traditionally, that role is played by the Cabinet Office and the Treasury. In many of the countries we have seen adopt a well-being process within government, it is often led from the centre because you need that integrating role.

From my perspective, that integration of advice would benefit from a common framework for thinking about the outcomes that matter and the trade-offs and synergies that government needs to address. Each separate body that is feeding in this multidisciplinary advice needs to be working with the same common framework, so that that advice can be integrated. The well-being approach that the OECD has is one option for integrating that into a common framework.

We need clarity about the ultimate long-term objectives. There needs to be leadership from the top down. As Jan was saying, many of these measures are very good at feeding up the bottom-up information about how people are feeling about their lives and what the experiences are, but at the same time you need the Government to give clarity on what the priorities are and what the vision for well-being should be. I will leave it there so there is time for everyone else to respond.

Professor Jan-Emmanuel De Neve: Briefly echoing and seconding what Carrie just said, the most important thing on the process front is to adopt the OECD well-being framework. The reason I like the OECD framework so much is that it is hybrid enough to serve everybody’s needs. It has all the more quantitative drivers of subjective well-being, but the 11th dimension is subjective well-being itself, so the ONS measures can readily be plugged in. It also thinks about sustainability and looks forward, using the four capitals on which future well-being is built.

It is really an amazing model. I know Carrie and the team at the OECD have worked tirelessly for the last decade or so on getting it to the point it is. Plus, it allows for benchmarking, because a lot of countries have taken this up. The OECD well-being framework is a go-to framework or the workhorse model on this front for policymakers.

I would urge this committee to leverage the pole position in which the UK finds itself in terms of data, thanks to the ONS, its centuries of intellectual and philosophical leadership, including Jeremy Bentham and many others, and the academic faculty that is readily available to provide insights. That is mostly based in the UK, so you have probably the strongest academic base on this particular matter.

Within the Treasury Green Book, to be very operational, I would complement what it currently says with the well‑being approach and the common currency around well-being, which then complements the income equivalence approach that is already part of it. It would nudge it one step beyond where it is today and operationalise well-being metrics, in a way that seems to work and is supported by many powerful men and women throughout government today.

In practical terms, these are all processes. As for what the Covid crisis has taught us, I appreciate Baroness Jay noting originally that it was probably a good idea to do furloughing. You could have told us so beforehand, but it has turned out to be a fantastic policy in well-being terms. As we know, and this is my own line of research, the importance of work for well-being is much more than the pecuniary aspects associated with a pay cheque. It is social identity, social network capital, as well as having a routine throughout the day.

A furlough scheme retains jobs in the case of a temporary hit by force majeure, so I have one specific recommendation. Can we make a sophisticated version of the furlough scheme part of the policy toolbox moving forward, as is the case in Germany with the Kurzarbeit, for example? Rather than having to invent something from scratch, can we make this a more permanent fixture in the policy toolkit for the UK? That would be my advice, given the importance of work for well-being. Job retention schemes do much better on that front than income compensation packages.

Jennifer Wallace: We put a publication out relatively recently called GDWe. I have not dwelt too much on the index side of it—that is a communication device to enter people into the conversation about the difference between GDP and well-being. The backend of that report has a series of recommendations, most of which are based on our prior work, but also what we call a review of reviews, where we looked at inquiries and commissions over the past 10 years, including precisely the type of report that you may be writing, to condense some of those messages.

I want to run through the four recommendations of the report for you. First, as we have already touched on, we urge the UK Government to put well-being at the heart, not buried in a Green Book document that you have to go searching for but committed to as the purpose of the Government.

The second point is about democratic engagement and participation. It has been well over 10 years since the ONS did its work to put together the well-being framework. We have seen through Covid a lot of people refinding the connection between social-economic, health and other aspects of their lives. The conversation we have been having is about how that emerges in a policy discussion. This is a very good time to go back to the people and have that national conversation about what matters now. What is well-being in your life now? We may end up with a very similar run of domains, but it is a good time to have that conversation with the whole population about what really matters.

That would then translate into, we hope, an updated and better indicator set. We have been very positive about ONS and the fact that it has a dashboard but, if we were to put on our statistical hat, there are things that we would change in there. We note that our view on what might be good environmental indicators has changed considerably over the past 10 years and those begin to look quite out of date. Some work needs to be done to bring that bang up to date and to attend to some of the inequalities that we were talking about earlier.

The fourth recommendation is about committing to well-being as an approach and a different way of thinking about government. That is where you end up with the Scottish, Northern Irish and Welsh examples. If you really commit to this, it is a different way of thinking about how government does its work. It is more participatory and joined up. It focuses on prevention, long-termism and usually localism—I know that a big driver for the UK conversation at the moment is how we can rethink the relationship between central and local.

There are logical principles that come out of the end of a well-being approach which can begin to guide decision-making over and above the indicators and the very specific pieces of evidence that we can provide into the process.

Marie Brousseau-Navarro: I totally agree, in particular, with what Jen has just said. It is really important to separate the outcomes from the indicators of success and impact. It is also very important to make sure that the well-being concept works, as Jen said, nationally but also locally. There is lots of movement across the world now for well-being that is relevant at the regional or city level. It is really important for equalities and to understand communities to see the difference in the well-being of different communities or in relation to biodiversity.

The pandemic has also given important lessons about the value of working together, across policy areas, and the need to prevent. We have not touched on that during the evidence session, but it seems still difficult to measure the value of prevention. That is worth flagging here as well. Finally, it is about making sure that well-being takes account of short-term needs, in the recovery from the pandemic, but also works for preventing the next one and helping us tackle these global systemic problems we have, in the form of climate change, inequalities and decline of biodiversity. It needs to be part of a bigger package.

The Chair: Thank you very much to all the witnesses for a very involved session. You have been extremely helpful, covering everything from the metrics and the interrelationship with policy outcomes to specific policy actions. It was particularly interesting to hear some of the less effective ways that this has been used, to Lord Pickles’s point. We thank you very much indeed for your time. I wish you well for the rest of lockdown and hope you get to your own sunny uplands very soon. Thank you very much.