Suddenly everyone is in favour of building a Big Society. But as the old gag has it, we shouldn't be starting from here. Instead of dealing with established problems, we should be eradicating their causes. But a Big Society where the state stops simply mopping up after social failure needs a policy of early intervention at its heart – and this in turn can create an important new role for business and finance.

Cabinet Office minister Francis Maude talked last week of just two families who had cost the taxpayer ￡37m over three generations. Too often the state spends money coping with the costs of drink and drug abuse, vandalism, criminality, poor education and lifetimes on benefits. Yet such spending usually fails, and the problems recycle themselves through the generations.

Experiments have shown that the right early interventions can correct this cycle. Birmingham invested ￡41m in a range of schemes helping families at risk, ultimately saving ￡101m in better outcomes for children. Research suggests every ￡6,000 invested in Family Nurse Partnerships, a programme for teenage mothers, saves ￡17,500 in unemployment and educational failure later. KPMG have estimated that intensive tuition programmes for children with lowest ability in literacy and maths can save up to ￡19 for every pound spent. Scaled up, such policies could have a profound impact on Britain's structural deficit, much of which is caused by paying for the future costs of social failure.