Costs and Outcomes Tool

Northern Ireland NCB 7/8th February 2013

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• Housekeeping

Welcome!

• Agenda • Your presenters today: Mike Powell, Project Accountant, C4EO 2

Objectives of the day

• Familiarise participants with a variety of cost benefit tools, including the Social Return on Investment (SROI) tool; • Demonstrate the cost effectiveness of a particular service using one of the tools available; • Encourage honest debate and reflection as to the supplying of services currently and how cost effectiveness tools might enhance these processes.

Commissioning using outcomes based accountability

‘Commissioning is the process for deciding how to use the total resource available for children, young people and parents and carers in order to improve outcomes in the most efficient, effective, equitable and sustainable way.’ Outcomes based accountability is about getting measurable improvements by getting behind what the data tells us (the story) and simply developing activities to improve.

What is OBA? How does it work?

• Disciplined approach • Ends & means • Talk to action • Thinking process + action planning • Use of data • Requires a common language • Outcomes focus 5

The 7 Performance Accountability Questions

1. Who are our customers?

2. How can we measure if our customers are better off?

3. How can we measure if we are delivering services well?

4. How are we doing on the most important of these measures?

5. Who are the partners that have a role to play in doing better?

6. What works to do better, including no-cost and low-cost ideas?

7. What do we propose to do?

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THE LANGUAGE TRAP

Too many terms. Too few definitions. Too little discipline Benchmark Outcome Result Indicator Modifiers Measurable Core Urgent Qualitative Priority Programmatic Targeted Performance Incremental Strategic Systemic Goal Measure Objective Target Lewis Carroll Center for Language Disorders 7

Putting it all together

• Results can be used in OBA report cards • Focuses on cost as an element of service improvement • Answers simple questions: – What did it cost?

– Does it generate cost effective improvements?

– How has our activity benefited C&YP (outcome and cost)?

– How has our activity benefited other services?

Costs & Outcomes and the Service Performance Matrix

Quantity Quality How much did we do?

#

How well did we do it?

% #

Is anyone better off?

% 9

Report card quadrants - example

Breastfeeding initiative and support through children ’ s centre How much did we do?

Total spend for the year 2010/11: £ 20,811 Number of children ’ s centres covered: 12 young women helped to adopt breastfeeding: 903 Unit cost per young woman per year: £ 33

Did we make a difference (no)

SROI: £ 1.60 for every £ 1 spent Estimated savings to health services £ 50,500

How well did we do it?

Unit cost per young woman per year: £ 33 5% reduction on spend from previous year 10% increase in number of young women reached.

Did we make a difference (%)

SROI: £ 1.60 for every £ 1 spent 5% reduction on spend from previous year invested in expanding service to 2 additional children ’ s centres??

Recap

You have learnt: • Reasons for using the costs and outcomes tool • What you need to do at the beginning • Completing the tool • Using it in performance management and OBA 11

Exercise (15 minutes)

• • Complete the exercise in groups Use the opportunity to discuss – differences between them – how you would explain this to others – Why language matters and other pitfalls or misunderstandings 12

Common Language

Definitions that start with ideas and not words • Result (outcome/ goal) – Population condition of well being • Indicator (benchmark) – Measure which helps quantify achievement of result • Strategy – Collection of actions for improving results • Performance Measure – How well a programme / service is working = Customer results 13

How can we become cost effective?

• Improving children’s outcomes : there are gains to be made by delivering services more efficiently, but the real gains will come from giving children and their families early support that prevents or reduces future spending. • Local variation: the same good practice will not work everywhere, we need to support each other to apply evidence in different areas.

• Hard choices: the financial situation means that we must focus on what really works.

• A range of messages and tools: Cost effectiveness means looking at every opportunity, from the most ambitious to the everyday.

How can we become cost effective? (2)

• Looking at emerging data : establishing whether practice is cost effective takes time, especially when looking at interventions that may have a long term impact.

• An on-going commitment: we must make cost effectiveness an integral part of our collective work, including it from the start.

• Leadership: having a vision, building shared commitment and tenaciously driving it through.

Introduction to Cost Effectiveness and Social Return On Investment (SROI) Mike Powell

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Documents & Tools

• • • • •

Costs and Outcomes Guidance Costs and Outcomes Tool New website page

Can I afford to? Can I afford not to?

Outcomes Based Accountability tools Presentation details 17

Where have we come from?

Cost Effectiveness in public service provision

(2010) • Presented at ADCS Conference – July 2010 • Costed Validated Local Practice • Tailored support • Tool developed further and guidance written taken into account feedback 18

Rationale and benefits of the tool

• Ability to test scenarios prior to implementation • Can be used as a budgeting tool • Help remain focussed on cost and outcomes • Model can evolve with time • Used as a tool to aid informed decision-making • Creates meaningful dialogue with child, family and stakeholders • Asks “did we make a difference?” 19

Outline Model Approach

How Benefit is Delivered Cost of Delivery Benefit Category Immediate Benefit £ Evidence

Home Visits Cost A Health Reduced Poverty Surveys Parental Support Cost B Education Better Health Statistics Support Groups Cost C Etc Community Resilience Improved Education Research Reports Social Care Teaching Others Mental Health Benefits etc etc. Total Cost etc.

Financial/Non Financial Benefits

Result

What does evidence tell us?

Does it meet the objective?

Lifetime Benefits

Ability to make decision

Return on Investment

Cabinet Office (2009):

a guide to social return on investment www.thesroinetwork.org

• Measures impacts, inputs, outputs and outcomes and gives financial value • Measures outcomes wider than ‘now’ • Promotes investment mentality • Provides clarity of governance

Limitations in calculating return on investment

• Benefits that Cannot be Monetised • Focus on monetisation • External Accreditation • Time intensive • Subjective Nature

Before you start….

• Establish who is doing it • Be clear what the scope is • Keep good records • Allow sufficient time

The Cost and outcomes Tool

Excel workbook: 1. Summary 2. Finance data 3. Impact map    Map inputs, outputs and outcomes Establish Impact Use and Embed 4. Checklist 5. Glossary   Value outcomes Calculate

Outcomes and Costs Example

• Offers early intervention and support to help primary school pupils make the most of their education.

• • Improving attendance Avoiding a first exclusion • • Emotional troubles Relationship and family difficulties • • Debt and money worries Bereavement • Support parents • Delivered through a team of school link workers

The outcome

• 150 children and their families helped with their emerging emotional and behavioural difficulties– Cost £580,000 p.a. providing an

SROI £ 1.47 per £1 invested

Deadweight

• What would have happened without intervention.

• Difference between local/national benchmarks and actual outcomes • 90% of a cohort of young offenders don’t re offend after a programme. The normal re offending rate is 50% • Number of Cohort/Non Reoffenders * 50% = Deadweight

Attribution

• Who else delivered your intervention.

• Who else helped deliver your intervention • In the case of a CBT course delivered through a children's centre the impact of the Childs home is deemed twice as important as the centre

Drop off

• Does the outcome drop off in future years.

• How fast does the outcome deteriorate • 0% in the case of literacy.

• 100%in the case of Teen pregnancy

Next steps

• Try and undertake one in your day to day work or on an assignment • Provide us with your feedback • Ask if you need further help • Complete the learning and evaluation questions

Resources

See Attached sheet

Mike Powell, Project Accountant

Email: [email protected]

Tel: 0207 843 6029