6 December 2006: New research published today calculates the total cost of pupils who leave primary school every year with very low literacy skills.

The study, published by the KPMG Foundation charitable trust*, has calculated for the first time the cost to the taxpayer of the 38,700 pupils in England and Wales who leave primary school every year still struggling to read and write.

The social cost of educational failure

By the time they reach the age of 37, the study shows that each of these children will have cost the public purse between £44,797 and £53,098. With 6% of 11 year olds currently leaving primary school unable to read or write properly, the total cost to the public purse is between £1.73bn and £2.05bn every year.

The research arrives at this figure by taking into account the links between literacy difficulties and resulting and expensive problems with education, health, employment and crime. Specifically, the research prices the special education needs provision that literacy problems incur, as well as the cost to the taxpayer of increased truancy and exclusion from school, the reduced employment opportunities and increased health risks that are ultimately experienced by underachievers at primary school, and their greatly increased risk of involvement with the criminal justice system.

Early intervention to make Every Child A Reader

Along with SHINE, the KPMG Foundation is a founder sponsor of the Every Child A Reader Initiative, which funds specialist teachers in inner-city schools to provide intensive help to children with severe literacy difficulties. The teachers are trained in the ‘Reading Recovery’ early intervention programme, which provides 30 minutes daily one-to-one tuition for primary children who are struggling to read and write.

Cost-benefit analysis

The research also determined the costs of providing the Reading Recovery programme as being £2,389 per pupil. Based on the above calculations of the long term public costs of literacy failure and also on evidence that the Reading Recovery programme will lift 79% of children who receive it out of literacy failure, the research estimated the return on investment for every £1 spent on the programme at between £14.81 and £17.56 over the next 31 years.

Jo Clunie, Director of the KPMG Foundation, said: “We commissioned this research because, together with government and other business and charitable organisations, we have invested £10m in the Every Child A Reader programme. We wanted to make sure that our joint investment was value for money. And this report suggests a brilliant return of at least £15 for every £1 we have spent.”

Jim O’Neill, Chairman of SHINE and Chief Economist at Goldman Sachs, said: “We welcome this ground-breaking information about the savings to the country that come from investing in literacy help. £1.3 and £1.7bn a year is a lot of money – and this is bound to be a conservative estimate because so many savings cannot be quantified. The true savings will be very much larger when the economic effects of reduced spending power, and social housing costs as well as intergenerational effects on literacy skills are considered.”

*The long term costs of literacy difficulties, KPMG Foundation, 2006. To download a copy of this research in PDF format, click here.