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Evaluation of Intensive Family Support Projects in Scotland

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7. Analysis of Project-Related Costs and Cost Consequences

Chapter summary

In assessing the economics of intensive family support projects, the evaluation adopts a form of 'cost consequences' approach. This follows from our assessment that it is not possible to undertake a full cost-benefit analysis of the Projects within the scope of the brief. Whilst the cost consequences approach identifies and tabulates relevant costs and benefits, it does not attempt to quantify or monetarise the value of those outcomes to society.

The analysis in this chapter is based on activity and cost data to the end of June 2008. Although the three Breaking the Cycle Projects were well-established by this date, they had not been operating for long enough to have fully achieved 'steady state'. The data for the Aberdeen and Dundee Families Projects provide a useful indication of steady state costs and also show the importance of working with a sufficiently large caseload (e.g. of about 20 families) to achieve important economies of scale.

Two unit costs have been calculated for each Project - the average cost per family month and the average cost per closed case. Recent activity and cost data show that the average cost per family month was about £1,300 - £1,900, with values falling considerably after the set-up period. Given that some of the Projects had closed very few cases during the evaluation period, the average costs per closed case achieved to date should be interpreted with some caution. However, the analysis shows that such costs will range from about £15,500 - £23,000 if the average duration of contact is 12 months. Some families, however, work with the Projects for considerably longer, which could have a detrimental impact on their unit costs.

The benefits (e.g. cost savings) associated with the Projects can be quantitative and qualitative and can arise in the short-term and/or the longer-term. Although many of the cost savings will be experienced by statutory services, some benefits will be enjoyed by the families themselves and by their neighbours and communities. Having considered the outcomes achieved to date and the costs of key services that might have otherwise been required (e.g. those relating to homelessness; looked after children and young people), the overall conclusion is that the Projects may be cost-effective in the short run. The extent of their overall cost-effectiveness, however, depends on the extent to which benefits are realised and the timescale under consideration. Potential longer-term benefits for individuals and for society associated with improved school attendance are indicated, although it may be years or decades before it is clear whether these have been generated by the Projects. Improving family functioning could also have important short-term and longer-term benefits. However, overall, it may not require many positive outcomes for the Projects' benefits to outweigh their costs.

It has not been possible to determine the cost-effectiveness of the core units, as separate information on their costs and outcomes is not available. However, the core units will allow Projects to work very intensively with families whose problems and needs may be too complex for them to be managed as effectively through an outreach service, where a longer contract period would be required. It is also likely to be important that core units have sufficient capacity that is used with enough intensity to spread the associated overhead costs across several families over a year.

7.1 Overview

7.1 One of the four key evaluation objectives is to consider whether the Intensive Family Intervention Projects are cost-effective and offer value for money. This chapter addresses two specific research questions:

  • Are the Projects cost-effective?
  • Are core units cost-effective?

7.2 This economic analysis comprised several stages:

  • Identification of Project-related activity;
  • Identification of the resources used and their associated capital and revenue costs;
  • Identification of relevant unit costs of delivering the Projects;
  • Identification of short-term cost savings and possible longer-term cost savings (i.e. the avoided cost consequences).

7.3 This Section should be read in conjunction with Annex 3, which explains the methodology in more depth. The annex also reviews research literature on intensive family support Projects in Scotland and elsewhere in the UK and shows how values for potential cost savings have been derived. An overview of the adopted methodological approach is presented in Section 7.2. Activity data for each Project are provided elsewhere in this Report, but Section 7.3 presents a brief summary of the data to 30 June 2008, which is used for the subsequent economic calculations. The expenditure accounts to this date are summarised in Section 7.4. These activity and cost data are then used to calculate some unit costs, which are presented in Section 7.5. Some of the possible cost consequences are discussed in Section 7.6 and the two specific research questions are addressed in Section 7.7.

7.2 Methodology

Cost consequences approach

7.4 The approach traditionally used by economists when undertaking economic evaluations (cost-benefit analysis) requires researchers to identify and monetarise the full range of outcomes associated with a project or programme, and to compare the value of the outcomes against the costs incurred in generating them, to identify the project or programme's value to society. Although this is undoubtedly useful when trying to compare the outcomes from different policy options on a consistent basis, monetarising outcomes can be methodologically complex and prohibitively expensive to undertake, particularly in the context of social policy. In this case, it was viewed as being beyond the scope of this research to attempt to monetarise the value of the outcomes achieved by the Projects considered here. Consequently, it has not been possible to undertake a full cost-benefit analysis of the projects.

7.5 One alternative approach to undertaking an economic evaluation would be a cost-effectiveness analysis, which identifies the cost per outcome associated with a project or programme. However, given the range of outcomes associated with the projects, the evaluation has adopted a form of cost consequences approach (as described by Coast (2004)). This methodological approach identifies and tabulates all of the relevant costs (which reflect the value of the resources used) and the possible consequences associated with a particular intervention. It clearly shows decision makers what is included and excluded from the analysis and where information is quantitative and qualitative. This approach identifies the range of outcomes associated with the projects, and the resources that have been used to generate them. As stated above, we have not provided direct estimates of the value of the outcomes achieved by the Projects. While we have endeavoured to provide indicative estimates for the monetary value of outcomes achieved from other existing sources of evidence, these are only intended to suggest the potential magnitude of the benefits that could be achieved by the Projects..

7.6 The overall objective of the economic evaluation is to consider the value of resources used (and possibly prevented from being used) associated with the five Projects to determine the extent to which the approach offers good value for money and is cost-effective. However, this approach also enables identification of non-quantifiable benefits associated with the Projects (e.g. improved family functioning; safer, more pleasant neighbourhoods), which may also be relevant to local decision makers.

7.7 The economic analysis included within the original Dundee Families' Project evaluation (Dillane et al, 2001) was relatively embryonic. The analysis included in the evaluations of the Shelter Inclusion Project (Jones et al, 2006), several subsequent Intensive Family Support Projects in northern England and an Early Intervention Case Management Project in Edinburgh (see Annex 3 for further details of the economic analysis undertaken as part of these evaluations) tried to address some of these limitations. For example, a number of unit costs were identified and calculated in these studies, thus facilitating comparisons over time.

7.8 The methods used in this evaluation build on the lessons learned from the analyses listed above and try to address some of their shortcomings (e.g. in terms of their potential to increase the use of other (Exchequer-funded) services by the families because of their involvement with the Projects). It also draws on Scottish data wherever possible when considering the potential cost savings (short-term and long-term) resulting from the Projects, and thus their ability to deliver value for money within Scotland.

7.9 The economic analysis undertaken for this evaluation has focused on calculating two key unit costs for each of the Projects:

  • The average cost per client month:
    • In 2005/06 and in 2006/07 (where relevant);
    • In 2007/08;
    • During the first three months of 2008/09 (i.e. from 01/04/08 - 30/06/08).
  • The average total cost per closed case.

7.10 The average cost per family month has been calculated in two ways:

  • By dividing the total expenditure over the relevant time period (i.e. from April 2005 or the start of the Project to 30 June 2008) by the number of client contact months provided during that period 12 - this value takes account of the costs incurred during the set-up period when activity was gradually building up;
  • By using recent costs and activity levels and estimated expenditure in 2008/09 to derive an indicative 'steady state' average cost per family month.

7.11 It should be noted that the costs reported for the Dundee Families Project reflect steady state values throughout the evaluation period, as the Project was established in 1996. Those for the Aberdeen Families Project include its set-up costs (during 2005/06), its developmental costs and its emerging steady state costs. The three Breaking the Cycle Projects were still relatively immature in summer 2008 and, although they had concluded their set-up periods, they could still have been at a developmental stage and had not been operating for long enough to have achieved a steady state.

7.12 It should also be noted that the costs for the Aberdeen and Dundee Families Projects include the costs associated with their core/residential units, as these are seen as being integral parts of these Projects, drawing on the same set of resources.

7.13 It is also possible to calculate average costs per family member as well as per family. However, these costs can be misleading, as not all family members will necessarily work with a Project (or at least not with the same intensity). However, many of the families had six or more members, all of whom would have their own specific issues and support needs. Such families require high levels of resource input from the Projects (and, indeed, from other services).

7.3 Activity data for the Projects

7.14 Activity data for the Projects are considered in Chapters 2, 3 and 6 of this Report. The economic analysis is based on activity and cost data to 30 June 2008 provided directly by the Projects. The activity data for the three Breaking the Cycle Projects are summarised in Table 7.1a.

Table 7.1a - Activity data for the BtC Projects: to 30 June 2008

Falkirk

Perth & Kinross

South Lanarkshire

Date of first referral

30/11/06

20/11/06

14/03/07

Total families to 30/06/08

20

41

19

Total active cases on 30/06/08

13

12

11

Total rejected (or not progressed) by 30/06/08 (if classified as such)

0

12

7

Total closed by 30/06/08

7

17

1

Average size of family (adults and children)

5.4
(max: 7)

3.8
(max: 7)

4.4
(max: 9)

Source: Projects

7.15 Similar data from the Aberdeen and Dundee Families Projects are included below in Table 7.1b for comparison.

Table 7.1b - Activity data for the Aberdeen and Dundee Projects: April 2005-30 June 2008

Aberdeen

Dundee

Date of first referral

29 July 2005

During 1996

Total families referred to 01/04/05 - 30/06/08

68

77

Total active cases on 30/06/08

24

15

Total rejected (or not progressed) by 30/06/08 (mostly 'inappropriate referrals')

16
Inappropriate referrals/
No service offered

38
13 inappropriate referrals;
18 no further actions;
7 disengaged

Total previously active cases closed by 30/06/08

28

24 (excluding cases referred before 2005/06)

Source: Projects

7.4 Cost data for the Projects

7.16 The five Projects provided copies of their annual expenditure accounts for 2005/06 (where relevant), 2006/07, 2007/08 and Quarter 1 of 2008/09. They were also asked to provide information about any payments in kind (e.g. seconded staff) and to ensure that costs associated with central management and support costs were included where relevant. The resultant information is summarised in Tables 7.2a - 7.2e.

Table 7.2a - Expenditure by Aberdeen Families Project (Action for Children Scotland)

2006/07: Actual

2007/08: Actual

April-June 2008/09

Amount

%

Amount

%

Amount

Employee costs

£222,921

76.2

£225,424

71.5

£62,343

Premises

£19,570

6.7

£26,763

8.5

£13,886

Equipment

£12,799

4.4

£23,134

7.3

£227

Transport

£10,501

3.6

£8,292

2.6

£1,265

Stationery, telephone, postage

£3,568

1.2

£8,205

2.6

£1,328

Variable

£1,472

0.5

£23

0.0

£592

Direct costs

£270,831

92.6

£291,841

92.6

£79,641

Management + support costs

£21,666

7.4

£23,347

7.4

£6,371

Total True Costs

£292,497

100.0

£315,188

100.0

£86,012

Source: Action for Children Scotland

7.17 In addition to the above costs, total expenditure by the Aberdeen Families Project was £165,421 in 2005/06 (when the Project started).

Table 7.2b - Expenditure by Dundee Families Project (Action for Children Scotland)

2006/07: Actual

2007/08: Actual

April-June 2008/09

Amount

%

Amount

%

Amount

Employee costs

£220,748

78.5

£234,674

78.6

£61,422

Premises

£19,126

6.8

£17,860

6.0

£4,688

Equipment

£5,676

2.0

£7,432

2.5

£1,024

Transport

£6,519

2.3

£6,244

2.1

£2,347

Stationery, telephone, postage

£3,729

1.3

£3,646

1.2

£1,580

Variable

£596

0.2

£2,115

0.7

£2,322

Direct costs

£256,394

91.2

£271,971

91.1

£73,383

Management + support costs

£24,859

8.8

£26,417

8.9

£7,143

Total True Costs

£281,253

100.0

£298,388

100.0

£80,526

Source: Action for Children Scotland

7.13 The Dundee Families Project started in 1996. Its expenditure in 2005/06 was £270,693. Its office accommodation, core block and dispersed properties are provided rent-free by Dundee City Council and it also receives a small amount of rental income from tenants in the core block and its dispersed properties. Given that each of the three properties that comprise its office accommodation would carry a rent to the Council of about £50 per week, an additional £7,800 per annum has been included in the costs for premises shown in Table 7.2b. However, as DFP covers the Council's rental costs associated with the core and dispersed properties through the rents it raises from the tenants in these properties, these elements have not been included in the above analysis.

Table 7.2c - Expenditure by Falkirk BtC Project (Aberlour Child Care Trust)

2006/07: Actual

2007/08: Actual

April-June 2008/09

Amount

%

Amount

%

Amount

Employment costs (incl staff training)

£70,734

66.6

£175,940

81.4

£51,004

Direct Project/Departmental Costs

£1,063

1.0

£4,015

1.9

£1,028

Maintenance (Repairs & Renewals)

£21,065

19.8

£3,007

1.4

£923

Travel & Subsistence

£2,984

2.8

£10,077

4.7

£2,023

Overheads

£354

0.3

£2,869

1.3

£2,694

Consultancy & Fees

£320

0.3

£678

0.3

£219

Sub-total

Management Fees

£96,521

£9,652

90.9

9.1

£196,587

£19,659

90.9

9.1

£57,891

£4,825

Total Expenditure

£106,174

100.0

£216,246

100.0

£62,716

Source: Aberlour CCT

Table 7.2d - Expenditure by P4 Perth (Action for Children Scotland)

2006/07: Actual

2007/08: Actual

April-June 2008/09

Amount

%

Amount

%

Amount

Employee costs

£91,996

75.9

£189,589

83.8

£52,478

Premises

£3,770

3.1

£1,500

0.7

£1,586

Equipment

£5,036

4.2

£1,109

0.5

-£835

Transport

£4,863

4.0

£8,420

3.7

£2,015

Stationery, telephone, postage

£2,548

2.1

£673

0.3

£331

Variable

-

0.0

£824

0.4

£990

Direct costs

£108,183

89.3

£202,115

89.3

£56,565

Management + support costs

£12,982

10.7

£24,254

10.7

£6,788

Total True Costs

£121,165

100.0

£226,369

100.0

£63,353

Source: Action for Children Scotland

Table 7.2e - Expenditure by South Lanarkshire (South Lanarkshire Council)

2006/07: Actual

2007/08: Actual

April-June 2008/09

Amount

%

Amount

%

Amount (est)

Employee costs

£33,709

74.3

£187,611

49.1

£52,315

Property costs

£64

0.1

£52,534

13.8

£14,395

Supplies & services

£4,622

10.2

£39,266

10.3

£10,000

Transport & plant

£0

0.0

£3,616

0.9

£1,250

Administration

£6,944

15.3

£20,155

5.3

£5,213

Payment to other bodies

£0

0.0

£77,505

20.3

£18,414

Financing charges

£0

0.0

£1,082

0.3

£275

Total expenditure

£45,339

100.0

£381,769

100.0

£101,863

Source: South Lanarkshire Council

7.14 In interpreting the South Lanarkshire accounts (see Table 7.2e) several factors need to be taken into consideration. Firstly, the Project is run by the Council rather than by a voluntary organisation, which means that some elements, such as property costs and supplies and services, are handled differently. Central overheads and support costs (which totalled £20,935 in 2007/08) are included within the main cost headings. Secondly, the Project was relatively slow in terms of recruiting families and only made very limited expenditure in 2006/07 (its original budget for this year was £381,990). Thirdly, unlike the other Projects, the South Lanarkshire Project had a specific budget of about £75,000 per year for buying-in a number of other services for families (e.g. for learning new lifeskills, such as interior design; making purchases to assist with developing better lifestyles; upgrades to family home).

7.15 Finally, it should be noted that the South Lanarkshire figures for the first quarter of 2008/09 are one quarter of the annual budget for the year, rather than reflecting the actual expenditure during this period (which was about £70,000). This is because some types of their expenditure are not made evenly throughout the year (e.g. less than £9,000 had been spent on payments to other bodies from of the annual budget of almost £74,000). Using the figures to date for 2008/09 could have significantly underestimated the expected annual expenditure on the Project.

7.16 Considering the above five Tables together, they show that staff costs account for the biggest share of annual expenditure - typically 65-80% 13. The Projects are highly dependent on being able to recruit and retain appropriate staff. They typically employ staff with a range of backgrounds (see Section 2.4), which will to some extent determine what expertise can be provided by their in-house team and where they need to refer families and/or individuals to other services. For example, in 2008/09 the South Lanarkshire Project included a seconded Community Psychiatric Nurse with drugs expertise in their team.

7.17 The data on total annual expenditure by the Projects are summarised in Table 7.3, which illustrates the trends in their annual expenditure. Although the three Project providers drew up their accounts in slightly different ways, similar pictures are revealed. The Breaking the Cycle Projects generally took some time to set up, resulting in their actual spending in 2006/07 being less than initially anticipated. The data for Aberdeen, which started in 2005/06, show a similar pattern. Expenditure in 2007/08, when all of the Projects were established, was much closer to budget. Expenditure during the first quarter of 2008/09 suggests that each Project will spend slightly more in 2008/09 than in 2007/08 (e.g. reflecting inflationary pressures).

Table 7.3 - Summary of annual expenditure by the Projects: 1 April 2005 - 30 June 2008

Aberdeen

Dundee

Falkirk

Perth & Kinross

South Lanarkshire

Total expenditure during 2005/06

£165,421

£270,693

n/a

n/a

n/a

Total expenditure during 2006/07

£292,497

£281,253

£106,174

£112,165

£45,339

Total expenditure during 2007/08

£315,188

£298,388

£216,246

£226,369

£390,850

Total expenditure April - June 2008

£86,012

£80,526

£62,716

£63,353

£101,863

Total expenditure to 30/06/08

£859,118

£930,860

£385,136

£401,887

£530,052

Source: Projects

7.5 Estimated unit costs for the Projects

7.18 Two key unit costs have been estimated for the Projects, using the above activity data and financial information. These are:

  • The average cost per family month;
  • The average total cost per closed case.

Average cost per family month

7.19 The average costs per family month have been calculated for each year for each Project and are shown in Table 7.4. Although it is recognised that the input provided to a family by a Project will vary across their period of contact with the Project (e.g. intensive initially, followed by a gradual reduction before closure), the average cost per family month provides a good indication of the costs of working with the families. Despite the differences between the Projects, these costs have a number of similarities and have fallen considerably as the projects have developed and matured. The magnitudes of these falls have occurred as projects have built up their caseloads and started to experience economies of scale.

Table 7.4 - Average cost per family month for various time periods

Aberdeen

Dundee

Falkirk

Perth

South Lanarkshire

Avg cost per family month in 2005/06

£3,308

£1,347

n/a

n/a

n/a

Avg cost per family month in 2006/07

£1,283

£1,256

£3,792

£3,618

n/a

Avg cost per family month in 2007/08

£1,308

£1,286

£1,802

£1,397

£6,107

Avg cost per family month: 01/04/08 30/06/08

£1,284

£1,789

£1,742

£1,760

£2,830

Average clients per month (based on 01/01/08-30/06/08)

20.5

15.5

11

13.2

9.8

Source of raw data: Projects

7.20 Table 7.4 shows that three of the Projects (Aberdeen, Falkirk and Perth) had similar average costs per family month of about £3,500 - £3,800 during their first year. By their second year, when activity had started to build up, these costs had fallen to about £1,300 - £1,800 per month, and were generally slightly higher than the 'steady state' value for Dundee of about £1,250 - £1,300 per family per month in 2006/07 and 2007/08. The values for these four Projects are similar for the first three months of 2008/09, with a range of about £1,300 - £1,900 14. However, when considered alongside the average number of clients per month for each Project, they also suggest the operation of economies of scale, whereby the larger Projects have lower average costs per family month.

7.21 It is particularly interesting to note that the average costs per family month for Dundee and Aberdeen are similar to or lower than those for the other Projects, even though they both have core/residential units. This suggests that such facilities are unlikely to increase unit costs significantly (though this may also depend on the realisation of economies of scale due to the size of the caseload) 15.

7.22 The costs for South Lanarkshire are considerably higher for several reasons. These include the structure of the Project, where staff carry small caseloads and work very intensively with families on an outreach basis, as well as the fact that the SLC Project caseload has contained an unusually high proportion of large families (see Tables 3.4 and 3.5). However, they too fell considerably as the Project developed and matured.

7.23 Although of interest in its own right, the average cost per family month is also a key determinant of the average cost per closed case. For reasons given below, there are a number of limitations associated with the costs per closed case to date. The closed case costs presented below are calculated in two ways:

  • Using the average cost per family month to date;
  • Using the indicative average cost per family month in 2008/09.

Table 7.5 - Average costs per family month: for full evaluation period and indicative values for 2008/09

Aberdeen

Dundee

Falkirk

Perth

South Lanarkshire

Average cost per family month (full period)

£1,466

£1,326

£2,093

£1,755

£4,762

Indicative average cost per family month in 2008/09

£1,300

£1,300 - £1,800

£1,900

£1,600

£3,700

Source of raw data: Projects

7.24 These costs are shown in Table 7.5. The average cost per family month to date is based on the costs of the Project from 2005/06 (or whenever the Project started, if later) to 30 June 2008. It therefore incorporates the set-up costs associated with the Projects in Aberdeen, Falkirk, Perth and South Lanarkshire 16. The indicative average cost per family month in 2008/09 is an estimated value, based on recent caseloads and activity levels and estimated expenditure in 2008/09. A range is given to Dundee to incorporate the estimated cost if the Project is working with a caseload of 20 families (as it had done until recently).

Average cost per closed case

7.25 There are a number of caveats when considering the average cost per closed case:

  • The Breaking the Cycle Projects have closed relatively few cases since their inception;
  • Therefore the average duration per closed case is unlikely to represent its 'steady state' value;
  • Many of the cases that have not been closed have worked with the Projects for considerably longer than the average duration per closed case, which will result in significantly higher average costs for these cases when they finally close;
  • The Projects classify their cases in different ways (e.g. rejected; not progressed; no further action) and the costs are stated in terms of the local terminology;
  • All of the calculations have been based on the date of referral to the Project, not on the date the case was formally accepted by the Project (this is because the Project will be providing input to the family from the date of referral, even if the family is subsequently rejected or refuses to engage with the project);
  • The Projects tend to reduce their support to a family gradually before finally closing the case, though in some cases closure may be delayed by external factors (e.g. the lack of availability of suitable housing for large families);
  • No distinction is made between cases which close due to the successful attainment of their objectives and those which close by default (e.g. because the family chooses to disengage);
  • Separate costs are not provided for families in core/residential accommodation - this is partly due to the small numbers of closed cases for these families, but also because the accounts do not differentiate between outreach services and those in core/residential blocks or dispersed tenancies.

7.26 Table 7.6a shows the average cost per closed case using the activity data shown in Tables 7.1a and 7.1b and the two average costs per family month presented in Table 7.5. Using the indicative unit costs for 2008/09, the average cost per closed case ranges from about £10,250 to £26,000. However, these values are in part influenced by treatment of the costs associated with rejected cases and those that did not work with the Projects for a significant period (and could therefore be described as cases that were 'not progressed'). The costs of these cases have not been included in the figures presented in Table 7.6a but are shown separately in Table 7.6b. Average costs per closed cases of below £15,000 are in line with those found in evaluations of other Intensive Family Support Projects (see Annex 317). It should be noted, however, that many of the projects included in these evaluations had average lengths per closed case of less than 12 months and had only been established for a maximum period of about two years.

Table 7.6a - Average costs per closed case

Aberdeen

Dundee

Falkirk

Perth

South Lanarkshire

Closed cases

28 closed

24 closed

7 closed

17 closed

1 closed

Average length per closed case

8.0 months

12.8 months

8.6 months

6.6 months

7.0 months

Average cost per closed case:
Full unit costs to date

£11,728
(max: £35,184)

£16,973
(max: £35,802)

£17,941
(max: £27,211)

£11,562

£42,749

Average cost per closed case:
Indicative unit costs for 2008/09

£10,400
(max: £31,200)

£16,640 - £23,040
(max: £35,100 - £48,600)

£16,286
(max: £24,700)

£10,541

£25,900

Source of raw data: Projects

7.27 The costs associated with the 'rejected' cases are shown in Table 7.6b. Each Project recorded their 'rejected' and 'closed' cases in different ways, but most of the 'rejected' cases were inappropriate referrals (though this was not always apparent until Project staff had spent some time gathering additional information about a referred family). For the three Breaking the Cycle Projects, Perth and South Lanarkshire identified a number of rejected cases (which were described as 'not progressed' in Perth), whereas Falkirk did not identify any rejected cases. Almost all of Aberdeen's rejected cases were inappropriate referrals. However, as rejection dates were generally not recorded for these cases, an average contact period of a month has been assumed for these families for costing purposes. Dundee recorded three categories of 'rejected' cases - inappropriate referrals; cases where no further action was taken (sometimes due to a change in the family's circumstances); and cases where the family chose not to engage with the Project from an early stage (despite considerable efforts by the Project staff). It should be noted that the time spent working with these families has been included in the calculations of the average cost per family month for each Project (see Tables 7.4 and 7.5). Table 7.6b shows that the costs associated with rejected families whose referrals were inappropriate varies considerably, but generally ranges from about £1,300 to about £3,000 per family.

Table 7.6b - Average costs per 'rejected' case

Aberdeen

Dundee

Falkirk

Perth

South Lanarkshire

Rejected cases

16 rejected (inappropriate referrals)

38 rejected

(13 inappropriate referrals;

18 no further action;

7 did not engage)

No such cases recorded

12 'not progressed'

7 rejected

Average length per rejected case

Unknown, as end dates not provided - average contact time of 1 month assumed

1.8 months inappropriate referrals;

3.0 months no further action;

4.7 months did not engage

-

1.1 months

2.0 months

Average cost per rejected or 'not progressed' case: Full unit costs to date

£1,466

£2,387 inappropriate referrals;

£3,978 no further action;

£6,232 did not engage

-

£1,902

£10,341

Average cost per rejected or 'not progressed' case: Indicative unit costs to date

£1,300

£2,340 - £3,240 inappropriate referrals;

£3,900 - £5,400 no further action;

£6,110 - £8,460 did not engage

-

£1,733

£7,400

Source of raw data: Projects

7.28 Table 7.6a shows that the average duration of closed cases is longer in Dundee (at 12.4 months) than elsewhere (where it is between about 6 - 8 months). Because the Dundee Project has been operating for almost 12 years, Project staff believe that they have worked through the local backlog of highly complex families with long-standing histories of housing difficulties and/or anti-social behaviour (an assertion consistent with our own findings - see Table 3.2 and accompanying text). This means that most of the families now being referred to them have less ingrained problems (though nevertheless severe ones) and may be more willing to work with the Project. Therefore, although many of their current families have worked with the Project for more than 12 months, the average duration of 12.8 months shown in Table 7.6a reflects the local steady state. The other Projects may have shorter average contact durations to date because some of the families referred to them have failed to continue to engage with their Projects (despite the best efforts of the staff), possibly due to the long-standing nature of their problems and an ingrained reluctance to address them (see Table 6.2) 18. Local differences in data recording may also result in 'similar' families being recorded in different ways. Nevertheless, an average steady state duration of about 12 months for closed case families appears reasonable.

7.29 The costs for the Dundee Project were further disaggregated to show that:

  • The 19 closed outreach cases (whose cases opened and closed during the evaluation period) had an average cost of about £17,650 and an average duration of 13.3 months;
  • The maximum cost for a closed case of about £35,000 was for a family who spent a total of 27 months in the core/residential unit and in dispersed accommodation from the beginning of 2005/06; 19
  • The two closed cases that had used core/residential accommodation only during the evaluation period had an average cost of about £13,900 and an average stay of 10.5 months (i.e. less than the average contact duration for the outreach cases).

Potential steady state average costs per closed case

7.30 Finally, to illustrate possible steady state values for all of the Projects and to assist with future planning, Table 7.7 shows the potential average costs per closed case for the Projects, based on the indicative average costs per family month for 2008/09 and a range of periods between referral and case closure. It shows, for example, that the average cost for the Projects (excluding South Lanarkshire, which includes additional items of service-related expenditure in its accounts) would range from about £15,500 - £23,000 if the average contact period is 12 months. These costs would increase to about £23,000 - £34,000 if the average contact period is 18 months.

Table 7.7 - Potential average costs per closed case for various periods between referral and closure

Aberdeen

Dundee

Falkirk

Perth

South Lanarkshire

Indicative average cost per family month in 2008/09

£1,300

£1,300 - £1,800

£1,900

£1,600

£3,700

6 months between referral and closure

£7,800

£7,800 - £10,800

£11,400

£9,600

£22,200

12 months

£15,600

£15,600 - £21,600

£22,800

£19,200

£44,400

18 months

£23,400

£23,400 - £32,400

£34,200

£28,800

£66,600

24 months

£31,200

£31,200 - £43,200

£45,600

£38,400

£88,800

30 months

£39,000

£39,000 - £54,000

£57,000

£48,000

£111,000

Source of raw data: Projects

Factors influencing the costs

7.31 The above analysis shows that three main factors determining the average cost per closed case are:

  • The duration of the cases;
  • The average cost per family month;
  • The numbers of inappropriate referrals and/or of cases where families refuse to engage (as these divert resources from other families).

7.32 However, it is also important to bear several factors in mind when considering the costs presented above:

  • Direct comparisons should not be made between Projects, as the types of services they are able to provide will in part be determined by the particular skills of their staff (e.g. some Projects may be able to provide parenting courses in-house, whereas others may refer families elsewhere for such work);
  • Projects have somewhat different aims, objectives and acceptance criteria - therefore, some may be working with more a complex caseload of clients than others;
  • The extent to which Projects are working with families with a long-standing history of housing problems and/or anti-social behaviour will be influential;
  • 'Closed' cases may be defined in different ways (e.g. depending upon the Project's process for assessing and classifying referrals), which will influence how cases are classified by each Project, and thus their associated costs.

7.6 The potential cost consequences

Project-related outcomes

7.33 The cost-effectiveness of the Projects is determined by considering the costs of delivering the projects (as described above) in conjunction with the values placed on the outcomes achieved by the Projects. Some of these outcomes (e.g. changes in the incidence of complaints about anti-social behaviour) can be quantified. However, other outcomes (such as improved family functioning) are qualitative in nature. As stated above, we have not provided direct estimates of the value of the outcomes achieved by the Projects. While we have endeavoured to provide indicative estimates for the monetary value of outcomes achieved from other existing sources of evidence, these are only intended suggest the potential magnitude of the benefits.

7.34 Two other important dimensions when considering costs and outcomes are when they occur and their duration (see Table A3.21). The costs associated with the Projects are generally incurred immediately and over the relatively short life-spans of a family's involvement in the Projects (although some, such as foster or residential placements for children, may be incurred over several years). Many of the key outcomes (such as reducing the risk of eviction; reducing the incidence of complaints about ASB; and reducing the risk of family breakup) may also be achieved in the short term. However, many of the other outcomes generated by the Projects will only become apparent after several years (e.g. better job prospects due to improved attendance at school). It is also likely that some of the benefits (e.g. improved family functioning) will also be experienced by future generations - certainly many of the adults in the families referred to the Projects had poor childhood experiences themselves, which have adversely impacted on their own lifestyles and their abilities to raise their children. As it may be many years before some of the impacts of the Projects become apparent, it is not possible to identify with certainty all of the outcomes achieved by the Projects within the time period available for consideration. We have therefore focused on the available evidence around the short-term and intermediate outcomes, and have provided an indication of the longer term outcomes that may arise in the future as a result of these. However, these longer term outcomes are indicative, as generating evidence to support their existence has been outwith the scope of this current piece of research, given the timescales involved.

7.35 This study has adopted a Before/After methodology, with outcomes being identified as changes in the Projects' participants compared with their position before participating. However, the research did not feature a control group, making it difficult to determine what the impact on the participants would have been had they not been involved in the Projects. Project staff believe that the families would have continued to experience a variety of problems (including becoming homeless) had the projects not been in place. Indeed, most of the families will have been subject to a range of interventions already and, given that the behaviour of the families was problematic enough to warrant referral to the IFSPs, we have to assume that these interventions had not been successful, at least in the medium- to long-term, in addressing the underlying problems. It is therefore suggested that the outcomes presented below are attributable to the Projects.

7.36 Chapter 6 presented some quantitative information about the impacts of Project support as judged at the point of case closure. These impacts are summarised below to enable the costs analysis to be more easily considered alongside quantitative information on outcomes. Tables 7.8a and 7.8b compare the situation regarding several key outcome measures at the point of case closure with that at the point of referral and show that net positive outcomes have been achieved across every dimension.

Table 7.8a: Changes in key outcome measures at point of case closure compared with point of referral

Outcome measure

Reduced

Unchanged

Increased

Families' risk of eviction

81%

17%

2%

Incidence of complaints about ASB

94%

6%

0%

Risk of family breakup

50%

34%

16%

Table 7.8b: Changes in family health and welfare at point of case closure compared with point of referral

Outcome measure

Improved

Remained Unchanged

Deteriorated

Physical health

36%

55%

9%

Depression

62%

24%

14%

Other mental health

25%

55%

20%

Employment prospects

44%

46%

10%

Alcohol abuse

43%

48%

10%

Drug abuse

53%

33%

14%

Children's educational progress/prospects

66%

29%

5%

7.37 The Tables indicate the Projects appear to have had a range of positive impacts on some participants in the Projects. Table 7.8a suggests that the following key short-run outcomes have been generated:

  • Reduced risks of homelessness and tenancy-related problems (includes costs borne by social landlords and housing departments);
  • Overall reductions in the incidence of and complaints about anti-social behaviour (includes costs of police and the criminal justice system);
  • Reduced overall risks of family breakdown and a reduction in the numbers of children at risk (includes costs of foster and residential care borne by social services) - though it should be noted that some children were moved from their families due to problems identified whilst working with the Projects 20.

7.38 Table 7.8b suggests that, in addition, a range of quantitative family-related outcomes with potential short-term and longer-term impacts have also been generated for some participants in the Projects:

  • Improved school attendance (leading to improved employment prospects);
  • Improved access to training and employment opportunities;
  • Reduced dependency on drugs and/or alcohol (though these improvements could be hard to sustain and relapses were not uncommon);
  • Improved physical and mental health and diet;
  • Improved household budgeting and financial management.

7.39 The outcomes referred to above may also generate a range of qualitative family-related outcomes in the short and long term. These may include:

  • Improved self-esteem and self-confidence;
  • Better family relationships;
  • Better parenting (plus inter-generational impact);
  • Better adherence to routines and boundaries;
  • Improved household management and time management;
  • Improved appearance of home and garden;
  • Better relationships with neighbours;
  • Improved anger management and better communication skills;
  • Improved ability to keep appointments.

Estimates of Monetary Value of Potential Outcomes Associated with the Projects

7.40 This sub-section draws primarily on data from the literature review of the possible short-term and longer-term cost consequences if families' anti-social behaviour continued and their tenancies remained at risk (see Annex 3). If the Projects generate positive outcomes, the costs that society avoids incurring as a result can represent the benefits associated with those outcomes. As stated previously, we have not provided direct estimates of the value of the outcomes achieved by the Projects. While we have endeavoured to provide indicative estimates for the monetary value of outcomes achieved from other existing sources of evidence, these are only intended to suggest the potential magnitude of the benefits.

7.41 Information provided by the Projects indicates that, for many families, behaviour has improved significantly, their tenancies are no longer threatened, and the risk of family breakdown has reduced (see Table 7.8a). Table 7.9 presents some indicative cost consequences based, where feasible, on Scottish data 21. It should be noted that the various published studies and other information sources from which these data are drawn show considerable variations in the estimated costs for similar types of service.

Table 7.9 - Estimates of possible short-term cost consequences (Scottish data)

Falkirk
(average local costs)

Scottish-based literature
(see Annex 3)

Foster Care/Fostering Agency

£925 per week

£680 per week

£35,400 per year

Residential Accommodation placement (Children's Unit):

£2,600 per week
(within Council area)

£3,600 per week
(outwith Council area)

£1,400 per week

£72,800 per year

'Crisis Care' placements:

£4,400 per week
(outwith Council area)

Close Support Unit:

£2,775 per week

£144,300 per year

Residential School Placement

£2,500 per week

£2,100 per week

£109,200 per year

Local Specialist Education day placement

£18,940 per annum

Special School (England)

£26,225 per year

Secure Training Centre (England):

£164,750 per place

Secure Accommodation

£4,700 per week

£3,725 per week

£193,700 per year

Young Offenders/Custody

£30,500 per year

Custodial sentence at YOI (England):

£51,000 for 6 months

Sources: Falkirk Council and others detailed in Annex 3

7.42 The costs associated with looked after children can quickly escalate, especially if the family includes several children who need to be looked after and accommodated by the local authority. However, it should be noted that time spent in care is not always undesirable. For some families, it may be essential to move the child/children to a safer living environment while their parents address specific personal problems, such as drug/alcohol dependency or mental ill-health. Therefore money spent now on foster and/or residential care may reduce subsequent expenditure on these (and possibly other) services.

7.43 Table 7.10 presents information about other possible short-term costs drawn from research undertaken in England (see Annex 3). It is illustrative rather than comprehensive, but again shows that costs can soon escalate, especially if the family becomes homeless or if criminal behaviour results in prosecution.

Table 7.10 - Estimates of other possible short-term cost consequences (English data)

Costs to landlord of evicting tenant due to anti-social behaviour

£6,500 - £9,000

Cost of temporary accommodation for a homeless family for 6 months

£23,400

Average cost per week to local authority of a child with emotional or behavioural difficulties and offending behaviour

£3,062 per week 22

Average cost per week to local authority of a child with disabilities, emotional or behavioural difficulties and offending behaviour

£4,927 per week

Pupil Referral Unit

£14,644 per year

Average cost per crime committed by a young person aged 10 - 21 years

£4,600 per crime

Costs associated with a teenager involved in criminal behaviour

£13,000 for police time, YOT involvement and Court appearances

HMP and YOI provision

About £95 per day and £36,575 per year. Overall annual cost (e.g. including tagging and probation) of at least £50,000

Sources: see Annex 3

7.44 An illustrative case study cited in the evaluation of intensive family support projects in England shows the estimated costs over a year for a vulnerable family with four children that did not work with an Intensive Family Support Project. It shows that the short-term costs associated with non-participation can be considerable (£334,000 over 12 months for this family), suggesting that the costs associated with delivering an IFSP can be covered by achieving 'successful' outcomes in the short term for a relatively small number of families. For details of this case study see Table A3.18 in Annex 3.

7.45 The costs presented in Tables 7.9 and 7.10 relate to a relatively short period of time, such as a week or a year. However, children displaying anti-social behaviour (who often also have poor educational attainment) tend to experience life-long consequences. A number of studies have drawn on research on a wide variety of topics (e.g. education; employment; crime; health) to estimate the cumulative financial effects of unaddressed childhood problems. These are discussed in Annex 3 and summarised in Table 7.12.

Table 7.12 - Estimates of possible longer-term cost consequences (English data)

Being ' NEET' aged 16 - 18 years

Total discounted cost of £84,000 (undiscounted vale of £300,000) 23

Social exclusion

Additional total (discounted) cost of £62,596 by age 28 for children with conduct disorder (i.e. ten times higher than for children with no problems)

Permanent school exclusion

Total (discounted) cost of £63,851 (£14,187 borne by individual and £49,664 borne by society)

Persistent school truant

Total (discounted) cost of £44,468 (£22,562 borne by individual and £21,906 borne by society)

Unaddressed literacy difficulties

Total (discounted) cost per person to age of 37: £44,797 - £53,098.

Total (discounted) cost of £63,851 (£14,187 borne by individual and £49,664 borne by society)

Sources: see Annex 3

7.46 Some further illustrative examples of potential cost savings associated with positive outcomes, based on the real experiences of the Projects, are presented below:

  • Enabling a child to return to the family home from voluntary foster care saved £35,400 over a year;
  • Preventing the need to place some children on the Child Protection Register has potential benefits for Social Work, through freeing-up scarce resources for other cases;
  • Preventing the eviction for one family, which would have resulted in three children being taken into care, resulted in an estimated saving of £106,200 over a year;
  • Local calculations indicated that preventing eviction for a family, with the associated expenditure on temporary accommodation charges, legal fees, furniture storage, special education and other services, could result in estimated savings of about £40,000 over a year.

7.47 The potential cost savings presented above are for indicative purposes only. We have not attempted to quantify the total value of cost savings to society, as the fact that it may be some time before the full range of outcomes associated with the Projects become apparent make it difficult to determine a full picture of what they have achieved and its value to society. The information presented above is therefore only intended to given an idea of the potential magnitude of the cost savings that could be generated over the short term and the longer term. However, it suggests that these savings could be substantial. Compared against the costs associated with delivering Project services, only a few 'successful' and sustained outcomes may be required for the Projects' benefits to outweigh their costs.

Sustainability of Positive Outcomes

7.48 When considering the financial consequences, it is also important to determine the extent to which the positive short-term outcomes that were achieved by many families are sustained. Given the small numbers of closed cases achieved by the three Breaking the Cycle projects and the lack of any significant period for their follow-up within the evaluation framework, it is currently beyond the scope of this research to do so for these Projects. These will be the subject of a further piece of work in the future. However, some indicative information on the possibility of sustaining the positive outcomes has been taken from two sources:

  • The subsequent experiences of some of the families who had previously worked with DFP and AFP;
  • A follow-up research study of six English Intensive Family Support Projects.

7.49 As shown below, these two sources show that about 70% of families have "good" prospects of sustaining the positive changes achieved whilst undertaking intensive family support.

Subsequent Experiences of some AFP and DFP Families

7.50 Chapter 6 presented some material on the sustainability of improved lifestyles, relationships and behaviour, including some 'hard evidence' drawn from the records of the Aberdeen and Dundee Projects. Follow-up information was compiled for 11 of the 50 families whose cases had been closed by AFP and DFP. This analysis was done with the help of the caseworkers and included interviews with the families. Although these 11 families may not have been representative of all families whose cases had been closed, and the families' sustainment of improved lifestyles and behaviour are not monitored locally in a systematic way, it is likely that any families reverting to their previous problematic behaviours would be well-known by their local authorities. The period of time since case closure for these 11 families ranged from 4-19 months, with a mean of 9.2 months.

7.51 The information from this analysis was presented in Table 6.7. It showed that although one family had reverted to its previous drug habit and associated criminality, there had been no reports of ASB for nine of the families and that ASB complaints were much reduced for the other family. The sustainability assessment was deemed to be 'good' for eight (72.7%) of the families (albeit with two needing long-term support, due to vulnerabilities such as severe learning disabilities). The two families whose sustainability assessment was 'doubtful' had both withdrawn from their programme (one did not engage and the other only engaged partially). However, it should be noted that no reports of ASB by either of these two families had been received in the seven months since their withdrawal. This analysis therefore suggested that almost three-quarters of these families were successfully sustaining the positive outcomes generated by their work with the AFP and DFP several months after their cases had closed.

Longer-term outcomes from IFSPs in England

7.52 This finding is reinforced by the conclusions of a study of the longer-term outcomes associated with six IFSP projects in England. This follow-up study (Nixon et al, 2008) built on an earlier evaluation of these projects over a two-year period (Nixon et al, 2006).

7.53 This follow-up study employed a qualitative methodology involving interviews with project managers, key stakeholders, family members and agencies working with families. Twenty-eight families who had worked with these IFSPs during 2004-2006 were successfully tracked. They were found to be representative of the wider population of 256 families who had worked with the six IFSPs over this period. The majority of the 28 families had exited the project within the previous 12 months and were living independently in the community. Six families, however, had only recently left the project and in these cases it was harder to establish the longer-term impact of the IFSP interventions.

7.54 The overall key findings from this study were:

  • For seven out of ten (20/28) families, positive change had been sustained and/or had occurred since exiting the IFSP and no significant further complaints about ASB had been received. For these families the risk of homelessness had been significantly reduced and the family home was secure at the point of the final interview.
  • The cessation of ASB complaints and reduced risks to the home, however, represent only two dimensions of sustainable outcomes and do not reflect the multiple difficulties that continued to impact on families.
  • Over half the families (16/28) had moved home and while for the majority, moving to a new neighbourhood represented a chance to start again, others had exchanged secure tenancies for less secure accommodation, either renting from a private landlord or living in temporary accommodation pending a decision about re-housing.
  • Just under a third of families (8/28) continued to experience difficulties with complaints about ongoing anti-social and/or criminal behaviour placing the family home at risk. For these families, the IFSP interventions did not appear to have any discernible impact on the behaviour of family members.

7.55 The study included an examination of the outcomes against the following four core objectives relating to family functioning and behaviour, which were:

  • Prevention of repeat cycles of homeless and family breakdown arising as a result of ASB;
  • Addressing unmet support needs and ensuring that families are able to sustain a positive lifestyle without being the cause of ASB;
  • Promotion of social inclusion for families and assisting in providing better outcomes in relation to health, education and well-being;
  • Increasing community stability by enabling and supporting families to live peacefully and to fully participate in their communities.

7.56 The findings for this element were presented as a continuum of outcomes, where involvement with the IFSPs was defined as:

  • A "resounding success" for 12 families (i.e. for 42.8%);
  • A "qualified success" for 8 families (28.6%);
  • 8 families (28.6%) experienced "continuing difficulties".

This follow-up study also found that:

" Although local stakeholders could not place a precise financial value on the impact of IFSP interventions or the value to the wider community, the projects were perceived to offer excellent value for money."

Use of additional resources

7.57 It is, however, also possible that the Projects may result in additional use of some Exchequer-funded services. One of the main areas where costs may increase, especially in the short term, is foster care for children. Costs associated with foster care have been considered above. The other major areas where demands for other services may increase relate to treatments for drugs and/or alcohol misuse and dependency and to mental health services. However, it is difficult to identify 'representative' costs for these services. Audit Scotland is currently undertaking a study of the costs and effectiveness of drug and alcohol services in Scotland, which is due for completion at the end of March 2009. Costs for mental health services also vary considerably according to the type of treatment. Some unit costs for England in 2007/08 published by the Personal Social Services Research Unit ( PSSRU) (Curtis, 2008) suggest that:

  • A unit cost of £219 per patient day (i.e. over £1,500 per week) for NHS inpatient treatment for people who misuse drugs/alcohol;
  • A unit cost of £219 per patient day for NHS inpatient treatment for people with mental health problems on an acute psychiatric ward;
  • £790 per resident week for voluntary sector residential rehabilitation for people who misuse drugs/alcohol;
  • £56 per patient week for maintaining a drugs user on a methadone treatment programme;
  • £58 per Cognitive Behaviour Therapy ( CBT) session;
  • £43 (Voluntary sector and Social Services) - £65 per day ( NHS) for day care for people with mental health problems.

7.58 Finally, the material presented above focuses mainly on quantitative aspects to which a financial value can be assigned. However, it is also important to recognise that intensive family support interventions can also deliver a range of qualitative benefits, such as improved family cohesiveness and functioning and making neighbourhoods safer and more pleasant places to live. Furthermore, many of the benefits resulting from the Projects are likely to be enjoyed by future generations.

7.7 Answering the research questions

7.59 By way of conclusion to the economic appraisal, the material presented above and elsewhere in the Report is used to address the two research questions posed at the start of this section.

Are the Projects cost-effective?

7.60 The data in Table 7.13 are taken from various tables in this chapter. They focus on the outcomes achieved by the five Projects during the evaluation period in terms of the key objectives of the Projects - reducing the risk of family homelessness due to eviction (e.g. for ASB); reducing the incidence of complaints about ASB; and reducing the risk of family breakup (unless indicated due, for example, to concerns relating to child safety). The costs included in the table are indicative, but are drawn from Scottish data where available. It should be noted that they are not cumulative, but show the results for several measures derived from a variety of research projects and other sources of information. The exact magnitude of the potential cost savings associated with the Projects will vary according to the circumstances of each family, but the values quoted below show that many of these costs that might otherwise have been incurred during the evaluation period are considerable. The table also shows that total numbers of families working with the Projects and the total costs for each year since 2005/06.

Table 7.13 - Summary Table of Key Short-term Indicative Costs

Total families referred:

Breaking the Cycle Projects (20/11/06 - 30/06/08): 80

Aberdeen and Dundee Families Projects (01/04/05 - 30/06/08): 145

Total costs of Projects:

2005/06: £436,114 (Dundee and Aberdeen only)

2006/07: £837,428

2007/08: £1,447,041

April - June 2008: £394,470

Cost per family month

£1,300 - £1,900

Cost per closed case (based on average contact of 12 months)

£15,500 - £23,000

Families with reduced risk of eviction

81%

Costs of eviction due to ASB

£6,500 - £9,000

Cost of temporary accommodation for a homeless family for 6 months

£23,400

Families with reduced incidence of complaints about ASB

94%

Average cost per crime committed by a young person (aged 10 - 21 years)

£4,600

Cost of custodial sentence at a YOI for 6 months

£51,000

Secure Accommodation

£4,700 per week

Costs associated with a teenager involved in criminal behaviour

£13,000 (for police time, YOT involvement and Court appearances)

HMP and YOI provision

About £95 per day and £36,575 per year. Overall annual cost (including tagging and probation) of at least £50,000

Families with reduced risk of family breakup (16% had increased risk)

50%

Foster Care/Fostering Agency

£925 per week

Residential Accommodation placement (Children's Unit)

£2,600 per week (within Council area)£3,600 per week (outwith Council area)

'Crisis Care' placements

£4,400 per week (outwith Council area)

7.61 The cost analysis has shown that none of the Breaking the Cycle Projects has fully reached steady state, although some estimated steady state unit costs for 2008/09 have been derived. The experiences of Dundee and, to a lesser extent, Aberdeen (due to its shorter period of operation) also provide a good indicator of the unit costs that may be achieved over time, though these may also depend on the project working with a sufficiently large number of families at any one time (e.g. about 20) to realise important economies of scale.

7.62 In terms of the unit costs, the analysis has shown that the Projects should be able to achieve average costs per family month of about £1,300 - £1,900 and average costs per closed case of about £15,500 - £23,000 (based on an average contact duration from referral to case closure of 12 months). However, these values will also be determined by local procedures and practices. Overall, a Project with an average monthly caseload of 20 families requires an annual budget of about £360,000.

7.63 Whether or not the Projects are considered to be cost-effective will depend upon the estimated cost savings and the additional costs associated with the Projects and the time horizon under consideration. With regard to the short-term cost savings, the data in Table 7.13 shows that these can be considerable, especially if children are prevented from being taken into care. As an illustrative case study in Table A3.18 in Annex 3 shows, a family with four children can generate Exchequer costs of over £330,000 in a year if their behaviour results in eviction and the children being placed in appropriate alternative accommodation. One such 'success' in a year for a Project could cover its annual cost of delivery.

7.64 Furthermore, the potential cost savings may be larger in the longer term, when the full range of outcomes associated with the Projects become apparent. The short-term outcomes data showed that some family members experienced considerable improvements to their health and welfare during the evaluation period, and that the proportions benefiting from these always outweighed the numbers experiencing deterioration. Reducing depression and drug and alcohol abuse, improving employment prospects and children's education progress and prospects may lead to a wider range of positive outcomes for families over time, with associated future reductions in public expenditure. However, given the limited evaluation period, it has not been possible to determine whether these longer term outcomes are being generated. It has therefore not been possible to determine the additional value to society associated with these wider outcomes.

7.65 However, it should also be noted that the Projects have often identified significant problems within their families (e.g. children at risk; drug and alcohol addictions; mental health problems), which may require specific (and often expensive) interventions. Some children have been taken into care (albeit often on a temporary basis) due to problems that came to light within their family whilst working with the Projects (see also Section 4.3). In other words, in the short term the Projects may be increasing the costs to the Exchequer over and above the direct costs associated with running the Projects. It has not, however, been possible to quantify the potential indirect costs associated with the Projects.

7.66 It is also important to recognise that the holistic approach adopted by the Projects means that all aspects of the families' lifestyle are considered (e.g. diet; hygiene; school attendance; training; anger management; parenting skills), rather than just one specific problem area (such as housing problems or anti-social behaviour). Many of these benefits may be lifelong, and possibly inter-generational. In particular, Projects that encourage meaningful school attendance could be cost-effective in the longer term, due to improving the life chances of the children involved. It is encouraging to note (see Table 7.8b) that the Projects have tended to have considerable success in terms of improving school attendance.

7.67 Overall, the Projects' costs will largely be incurred in the short run, while the some of the outcomes arising from the Projects (and their resulting benefits) may only become apparent over the longer term. Consequently, it is not possible to state definitively whether the Projects are cost-effective, as the information necessary to make that judgement is currently unavailable. However, the Projects may generate notable short-term cost savings. The available information on indicative cost savings that could arise from the types of outcomes that may be generated by the Projects suggests that only a few 'successful' and sustained outcomes may be required for the Projects' benefits to outweigh their costs.

Are core units cost-effective?

7.68 Staff in the two Projects with core units spoke very highly of these and saw them as essential. Two of the other three Projects indicated that they would like to have such a facility (see Section 2.5). Core units enable a Project to work more closely and intensively with a family than is possible through an outreach service. This can be very beneficial, and can enable some highly complex families to be accepted who otherwise would not be appropriate for an outreach service due to their need for very intensive support. However, it is important to recognise that core units may also bring new problems to light (e.g. relating to child welfare and protection), with subsequent cost consequences for some services. Nevertheless, child welfare issues should be of paramount importance, and core units may help to identify these.

7.69 Core units need to be sufficiently flexible to accommodate large families if necessary (e.g. by joining two such units) and it is also important that they are used on a regular basis and do not stand empty for long periods of time. There also need to be a sufficient number of flats to enable economies of scale to be realised (e.g. relating to staff sleeping on site). The importance of such economies of scale suggests that Projects which are too small to generate sufficient demand for a facility of this kind should work together (e.g. across local authorities) to provide such a facility (although we recognise the potential accounting and managerial complexities of such an approach).

7.70 Separate accounts are not kept for core units, due to their integration within their Project as a whole. However, the unit costs presented above for Aberdeen and Dundee include the costs associated with their core units, and their costs (e.g. the average cost per family month) are generally lower than those for the Breaking the Cycle Projects (though this may in part reflect the relative maturity of the Dundee and Aberdeen Projects). Furthermore, although the evidence to date is limited due to the small number of closed cases, it suggests that the families placed into a core unit may not necessarily require a longer overall duration of contact with the project than is needed for some families receiving outreach services.

7.71 It has also not been possible to identify separately the outcomes associated with the core units. Therefore, as it has not been possible to identify either the costs or the outcomes associated with the core units, no definitive conclusions can be made about their cost-effectiveness. However, the core units do allow the Projects to work with more complex families in greater depth than they would be able to with their outreach services. This may mean that the Projects can generate a greater range of positive outcomes than would be possible if these families received outreach services alone.

7.72 It is also likely to be important that core units have sufficient capacity that is used with enough intensity to spread the associated overhead costs across several families over a year.