How should we value something? Here are some alternative theories…

a) By what it costs to deliver or produce. This approach is sometimes called the labour theory of value. And sometimes called Full Cost Recovery.

b) By what price the purchaser is willing to pay. This approach is sometimes called the market mechanism or the invisible hand.

c) By what impact is has on society as a whole. This approach is sometimes called a cost:benefit analysis or Social Return on Investment (SROI).

For many years, voluntary sector organisations struggled to get to grips even with the first approach. Meanwhile, in the wider economy, this idea had fallen out of fashion with the Berlin wall.

Then some clever people convinced central government that the sector ought to think more about the third approach. This was ambitious and admirable. One of the arguments was that this would help them do better business with their customers. Meanwhile in the wider economy, this approach was widely ignored as customers continued to pay very small amounts of money for clothes, for example, regardless of the cost of producing them to society as whole.

Perhaps someone might suggest that the sector thinks a little bit more about the second approach? Does anyone know how much a commissioner will pay to get someone off the streets, off drugs and into a job and a safe home?