Cost benefit modelling for working with troubled families

1. Cost benefit modelling for working with troubled families Mark Tuckett: Sheffield City Council Lovedeep Vaid: Centre for Economic and Social Inclusion

2. Aims for today’s session • Explain what are we trying to do in Sheffield and why: build upon existing models and explain how ours will be different • Demonstrate where the work has got to so far

3. What are we doing and why • We have agreed a Successful Families plan, for improving how we work with those families in need of extra help and support. • We are writing a business case for improving how we work with these families • We therefore need a set of Sheffield-specific costs and benefits, which we can all recognise and sign up to, to generate a business case for sustainable funding in the future

4. We want to understand the profile of costs and benefits over time

5. How are we proposing to do this • We are not starting from scratch – we are building on existing models, including those developed by DFE and Greater Manchester • We are incorporating other relevant examples, e.g., Loughborough University’s cost work about Looked After Children, CAADA’s work about domestic abuse

8. How will our model be different • Incorporate Sheffield-specific costs and benefits wherever possible • Use a robust, consistent, transparent approach to calculating costs (e.g., treatment of ‘on-costs’) • Clearly separate cashable and non-cashable benefits – for example, the costs of taking a child into care • Include the family as a potential beneficiary (e.g., ability to save money) • Increase the emphasis on the cost of intervention/provision of services, including cost of Multi-Agency approaches • Calculate costs and benefits over more than one year • Provide the functionality to compare the impact of different (or no) intervention(s)

9. Which agencies are we already involving in this discussion • Police • Probation • Early Intervention and Prevention • CYPF – Business Strategy • Communities – Business Strategy and Commissioning • Adult Safeguarding • Children’s Safeguarding • YOS • Drugs and Alcohol Abuse Partnership • Domestic Abuse Partnership • Health and Social Care Trust • PCT • Housing Solutions • Employment Services • DWP • Safer Neighbourhoods • Policy, Partnership and Research • VCF sector (via 3rd Sector Assembly and themed groups) • CAMHS • Prison service For each agency, we are identifying people with a working knowledge of the finances and outcomes for each area

10. An evidence based model • DfE Family Savings Calculator: help local authorities to quantify the cost saved by services and agencies from a family at risk undergoing and completing an intervention • Manchester evaluation framework: help demonstrate which ways of working are most effective • Both based on research that helps identify associated costs and benefits • Help agencies to identify the financial value of positive outcomes • Identify those programmes which do not deliver value for money for the taxpayer and reallocate resources accordingly • Help to ensure that future programmes are designed with a clear understanding of the costs and benefits they will deliver to the taxpayer • Save money in the short term • Longer-term: drive economic growth, by focusing resources on those programmes which are proven to deliver social and economic opportunity

11. Meaningful evaluation requires accurate cost calculations • Need to calculate two cost figures: • cost of delivering services without any intervention (the reference case) • cost of the intervention • Initial intervention cost figures will be an estimate • Some cannot be accurately forecast • The model sums three different types of costs: • Capital costs • Revenue costs • In-kind costs

12. The reference case (risk costs) = • existing business as usual approach to dealing with issues • Manchester developed a framework to enable a break down, calculate • and report the costs that the public purse has been incurring: • Contact and engagement • Assessment • Interventions • Reviewing • For each of these stages: • List the agencies who currently incur costs; • Against each agency, list the types of costs they incur and split total costs into revenue, capital and in-kind costs • Build a bottom-up model of intervention case costs to be measured • against the reference cost = net cost of an intervention

13. Examples of outcomes …….. • Found employment • FT/PT, sustained employment, benefits • Increased skills and education level • Step up in educational level • Helped parents and children • Increased parental work readiness • Improved school readiness • Reduced parental mental health • Reduced numbers of children in care • Reduced crime

14. Types of benefits • Model seeks to place a value on three different types of benefits • Fiscal benefits • Economic benefits • Social benefits • There are two outputs from the model: • Benefit cost ratios • Net present efficiencies

15. Challenges • Deadweight • The change in outcomes that would have happened anyway is known as the deadweight. Calculated in two ways: • assessing the change in outcome measures of comparator areas • measuring changes in outcomes of individuals engaged in the pilot through a robust monitoring and evaluation plan • Optimism bias (OB) • Practitioners are overly optimistic about the outcomes • To account for this the model needs to apply correction factors • Different interventions require different cost, risk, outcome headings …. • Can one model fit all ???