Putting the Costs into Cost-Benefit: Full Costing Evaluation of Interventions for Young People in Real-Word Settings

Background

Realising Ambition is a UK-wide programme replicating 25 interventions aimed at preventing children and young people from entering the criminal justice system. The diverse portfolio includes community initiatives, universal school-based education, whole family therapy and intensive 1:2:1 support and mentoring. We would like to share findings from the implementation of a consistent approach to calculate unit costs of the interventions applicable to other future settings, and, where possible, cost-benefit analyses.

 Cost-benefit analysis shows whether the resources committed to delivering an intervention are offset by the value of the benefits produced, requiring financial data about costs and robust evidence of the intervention’s impact. There is a tendency to focus on the monetary value of outcomes and maximising the benefits side of the equation, whilst taking only a narrow approach to costing. Analyses should quantify as many costs as feasible, including items for which the market does not provide a measure of economic value. Adopting a broader societal perspective ensures that all relevant costs are included, regardless of who pays for them, such as indirect costs like volunteer and beneficiary time – resources often perceived as free. Interventions for young people face a great level of unpredictability and variation that make estimating unit costs difficult. Full unit costing requires analysis of variation to produce a range in which the cost would likely fall if implemented again.

Method

Information regarding the intervention activities, the time and financial resources required and the beneficiaries served was obtained through telephone interviews and the resources needed per beneficiary per year estimated. Staff time estimates were translated to monetary costs using national rates of pay survey data. Values were also assigned to volunteer, parent and beneficiary time. Initial estimates were adjusted through sensitivity analysis to account for possible biases and create a range from low to high.

Findings

Estimates of the intervention unit costs in the diverse portfolio ranged from £50 to over £14,000. The evaluation explored how total costs and their composition varied across the portfolio. Where possible, comparisons were made with other available robust cost estimates and cost-benefit explored for interventions with sufficient evidence of impact.

Implications

Accurate costs help organisations plan and budget and allow commissioners to make informed choices. This study provides a standardised method to assess unit costs that can be applied across sectors and utilised in cost-benefit analyses, such as the Social Research Unit’s Investing in Children model, ensuring full benefits are compared against full costs.