Scottish Mentoring and Leadership Programme: impact and value for money evaluation
Findings of the impact and value for money evaluation of the Scottish Mentoring and Leadership Programme (SMLP), looking at the MCR Pathways element of the programme for care experienced young people.
4. Value for Money analysis
This chapter outlines the Value for Money assessment, which estimates the costs of MCR Pathways for care experienced pupils and compares them to the estimated monetised benefits including longer-term benefits to society. This analysis uses the findings from the previous chapter on the impact of the programme on measurable outcomes as its basis for the monetisation of the benefits from the programme.
The estimates of benefits and costs underpin a Social Cost Benefit Analysis (SCBA), which assesses the impact of the programme on social welfare, with relevant costs and benefits valued in monetary terms were proportionate and possible. Where benefits have not been possible to assess these are set out in the report. All estimates are consistent with HM Treasury Green Book Guidance.
Two metrics have been estimated using these approaches:
- The Benefit Cost Ratio (BCR) - a ratio of the benefits to the costs.
- Net Present Value (NPV), which shows the value of benefits from the programme minus the costs.
Together these metrics provide the basis by which Value for Money is assessed. The BCR reflects the monetary value of the benefits to society for every £1 spent, while the NPV represents the extent to which any benefits outweigh the costs incurred. The BCR and NPV calculations include the necessary HMT Green Book accounting principles, including discounting and uprating prices to current (2024) prices. As all costs are in the past, a social discount rate does not need to be applied to costs[13]. Prices are deflated to current prices using GDP Deflators from the Quarterly National Accounts published by ONS on 30 September 2025[14]. Outcomes included in the benefits estimation which are realised in the future such as the impact of improved educational attainment are discounted. Further information on the incorporation of HMT Green Book accounting principles can be found in the Social Cost Benefit Analysis section below.
This chapter starts with an assessment of the costs of MCR Pathways before moving onto the core benefits which includes all benefits that could be monetised within the Social Cost Benefit Analysis. For the purposes of illustrating the approach to quantification and monetisation, Approach B2 is used to underpin the calculations within this section of the report however full calculations using the estimates from Approaches C and D are set out in Appendix D and referenced at the end of each section in order to establish a range of monetised value for each outcome.
The next section of the chapter combines the costs with the benefits to estimate the Benefit Cost Ratio (BCR) and Net Present Value (NPV), before testing the underlying assumptions of the Value for Money assessment to measure how much the assumptions would need to change for benefits to not be greater than the costs.
The chapter concludes with an assessment of wider benefits including reducing homelessness and crime, as well as improving NEET outcomes and attendance which have not been monetised as part of the core benefits. These outcomes are not considered in the core benefits assessment because there is either insufficient existing literature to accurately monetise them, the outcomes are at least partially monetised already within the core benefits estimate and including them would, therefore, constitute double counting or there are no relevant impact estimates for the outcomes in order to assess impact.
Costs
This section sets out the cost estimate for MCR Pathways which is established based on average total costs using two steps:
- Step 1: Estimate the average annual cost of MCR per school.
- Step 2: Estimate the total cost of MCR by multiplying the annual cost per school by the number of schools.
Step 1: Estimate the average annual cost of MCR per school
The table below includes the average costs per school (in 2024 prices) of running the MCR Pathways programme. This equates to £55,000 per school based on administrative cost records between 2015 and 2021. The salary of coordinators varies geographically; however, through consultation with MCR the average annual salary of coordinators is estimated at £27,000, in line with recent job listings[15]. The estimates below therefore represent an average cost per school per year; however, we expect that there is variation in costs between schools (for example, rural schools are more likely to have higher marketing costs and travel expenses).
| Line Item | Costs (2024 prices) |
|---|---|
| Mentoring Services (mentor interviews, training, background checks etc) | £5,000 |
| Community Engagement, Partnerships & Young Person Engagement | £3,500 |
| Marketing & Mentor Events | £3,000 |
| Programme Management | £6,500 |
| Systems, Evidence & Impact (inc. hardware and software licenses) | £2,800 |
| Learning & Development | £2,200 |
| MCR Back Office (Finance, HR etc, senior management etc.) | £2,000 |
| Materials (group work, print materials, mentor badges, etc.) | £1,000 |
| Travel expenses | £1,000 |
| Regional Pathways Coordinator (contingency cover) | £1,000 |
| Coordinator salaries | £27,000 |
| Costs for all pupils | £55,000 |
Source: MCR Pathways
Step 2: Estimate the total cost of MCR by multiplying the annual cost per school by the number of schools
The total costs of MCR are calculated by multiplying the estimated average costs per school per year by the number of schools participating in MCR. In total this equates to £18,755,000.
| Year | Number of schools running MCR | Cost per school | Total Cost |
|---|---|---|---|
| 2014/15 | 6 | £55,000 | £330,000 |
| 2015/16 | 8 | £55,000 | £440,000 |
| 2016/17 | 15 | £55,000 | £825,000 |
| 2017/18 | 33 | £55,000 | £1,815,000 |
| 2018/19 | 45 | £55,000 | £2,475,000 |
| 2019/20 | 59 | £55,000 | £3,245,000 |
| 2020/21 | 71 | £55,000 | £3,905,000 |
| 2021/22 | 104 | £55,000 | £5,720,000 |
Core benefits
The core benefit calculation estimates the benefits of MCR Pathways in monetary terms to be used within a Social Cost Benefit Analysis (SCBA). The estimates are derived from the quantified impacts set out in the previous chapter 3. For the purposes of illustrating the approach to quantification and monetisation, Approach B2 is used to underpin the calculation in this section of the report however full calculations using the estimates from Approaches C and D are set out in Appendix D and referenced at the end of each section in order to establish a plausible range of monetised value for each outcome.
Educational attainment
Using the impact findings set out in the previous chapter, the benefits to pupils from MCR Pathways are monetised using the impact of improved educational attainment on lifetime earnings.
In short, the methodology utilises existing research which has estimated the additional lifetime earnings associated with grade improvements for pupils taking GCSEs in England and applies this to the improved grades at SCQF Level-5 achieved in S4 as a result of MCR Pathways.
An important methodological consideration is avoiding double counting between levels of attainment. The monetisation therefore focuses on attainment at S4 only, involving SCQF Level-5 qualifications. This is because qualifications achieved after S4 are likely to be highly correlated with attainment at S4 and, therefore, the marginal value of lifetime earnings associated with SCQF Level-5 at S4 cannot be simply added to estimates at higher educational levels. (Some pupils may sit further SCQF Level-5 qualifications in S5 and S6; however, these qualifications are not included in the assessment.) An assessment of the potential additional benefits from other levels of attainment including Level-4, Level-6, Level-7, Further and Higher Education is explored in the Additional Benefits section at the end of this chapter.
Inputs
Currently, there is no publicly available monetary estimates of the benefits from improved educational attainment specific to the Scottish educational system. This assessment, therefore, applies research by the UK Government Department for Education (DfE)[16], specific to students in England, to the Scottish context. The research by DfE estimates the lifetime earnings associated with grade improvements at GCSE using the Longitudinal Educational Outcomes (LEO) dataset which includes all people born since 1985 who have engaged with the school education system in England, and the UK Labour Force Survey (LFS) which is the largest household study in the UK covering approximately 29,000 responding UK households and 63,000 individuals per quarter. Qualifications in England are not directly equivalent to those in Scotland which adds uncertainty to these estimates and, therefore, the findings should be considered with caution. DfE first estimates, via regression with extensive controls, the marginal difference in early‘career earnings associated with a one‘grade improvement by subject and gender. It then projects those estimated grade effects across the full working life using age-earnings and employment profiles and discounts future years per the Green Book to produce lifetime earnings premia (2019 prices).
Impact estimates
For the purposes of the value for money assessment, the impact of MCR Pathways on educational attainment is captured through the additional number of SCQF Level 5 qualifications by grade achieved at S4, rather than based on the summary measures of attainment shown in Chapter 3. Using the number of grades achieved better aligns with the data from the DfE paper to allow for monetisation. The effect sizes are estimated using the same data from Scottish Government as the estimates in the previous chapter which includes level and grade for all SQA qualifications achieved by each pupil in Scotland. This data was aggregated by pupil to provide counts of Level 5 qualifications at each grade. The estimated effect sizes from approach B2 were calculated by taking the difference of the point estimates for the target group and control groups. The statistical testing for effect sizes uses standard independent samples t-tests to compare the point estimates of the control and treatment groups.
| Level-5 quals | Target Group: Total | Target Group: Average | Control Group: Average | Effect Size (average additional grades per pupil) | Comparison group (control group average x Target Group Sample Size) | Difference (Effect Size x Target Group Sample Size) |
|---|---|---|---|---|---|---|
| Level-5 quals at Grade A | 1,597 | 0.46 | 0.35 | 0.11*** | 1,217 | 380 |
| Level-5 quals at Grade B | 1,937 | 0.56 | 0.43 | 0.13*** | 1,488 | 449 |
| Level-5 quals at Grade C | 2,178 | 0.63 | 0.52 | 0.11*** | 1,798 | 380 |
| Sample Size | 3,452 | 3,452 | 2,590 | NA | 3,452 | 3,452 |
˜*** denotes findings significant at the 99% level, ˜** denotes findings significant at the 95% level, and ˜* denotes findings significant at the 90% level.
This approach of estimating educational attainment impacts suggests that, based on the B2 Approach, MCR Pathways programme resulted in the average pupil gaining 0.11 A grades, 0.13 B grades and 0.11 C grades compared to the counterfactual where this programme was not available, all else being equal. This equates to 380 A grades, 449 B grades and 380 C grades across the target group.
Calculations
The unit value of additional future earnings from a grade improvement at GCSE is estimated using the supplementary tables published alongside the research by DfE by taking a weighted average of the income differential weighting by the number of students taking each subject[17]. This means the average values extracted from these tables take into account the differences in earnings associated with different subjects taken at GCSE and with the gender of pupils awarded these GCSEs.
| Overall | Marginal value (2019 prices) | Marginal value (2024 prices) |
|---|---|---|
| Grade B to Grade A | £9,366 | £11,516 |
| Grade C to Grade B | £18,722 | £23,021 |
| Grade D to Grade C | £18,189 | £22,365 |
Data sourced from: GCSE Attainment and Lifetime Earnings, Department for Education (2021)
Using the estimated marginal benefits of a grade improvement to lifetime earnings from the table above, the value of an A, B or C grade, in relation to achieving a D grade, is calculated by adding the relevant marginal values together. For example, the value of a B grade relative to a D grade is the marginal value of improving from a Grade D to a Grade C, plus the value of moving from a Grade C to a Grade B.
Grade D is used as the comparator, rather than no grade, to reduce the value assigned to taking additional subjects but not achieving a grade above a D. In other words, we use Grade D as the baseline, so we only count value from improvements above the lowest grade. This avoids overstating benefits by attributing value to simply taking more subjects without improving the grade. For GCSEs in England a D grade is considered a pass but below the standard benchmark required for many Further Education courses.
The resulting value of each grade, relative to a D grade, is shown in the table below.
| SCQF Level-5 (reference grade D) | Monetary values (2024 prices) |
|---|---|
| Grade A | £56,902 |
| Grade B | £45,386 |
| Grade C | £22,365 |
Data sourced from: GCSE Attainment and Lifetime Earnings, Department for Education (2021)
Limitations
There are several caveats of using the DfE research in this way:
- The DFE research assesses the relationship between attainment and lifetime earnings for those who were pupils in England in the mid-2000s and therefore represents a different cohort of students taking different qualifications.
- The DFE research estimates lifetime earnings based on the best available data including an extensive set of controls. However, some causal factors inevitably remain unobserved in the data. This ˜selection-on-observables assumption implies that, if there are any unseen traits that are positively correlated with grades and earnings, the estimates will be biased to some degree, There is also a possibility that the relationship between earnings and attainment that held in this time period may have changed for the time period that is being evaluated (2014 to 2021).
- Because an average value across subjects is used rather than valuing grades for each subject, it is assumed that the student distribution across subjects (share of pupils taking Maths, English, Music, etc.) for pupils receiving support through MCR Pathways is the same as in the data used for the DfE research. In practice it may be that the subject choices of MCR participants may be different.
- It is assumed that the proportion of students receiving a given grade is uniform across subjects (i.e. the same proportion of maths students get Grade As to the proportion of music students).
- It is assumed that a grade of D or less is worth £0 to lifetime earnings. By extension, it is assumed that where the treatment group has earned additional qualifications, that this is measured as an improvement from a ˜D grade in the control group. This is a conservative approach as it does not value the impact of taking additional subjects.
Findings
To estimate the total benefits in monetary terms the monetary estimates for the value of a grade are applied to the difference between target group and the comparison group (accounting for sample size). Using the above approach, we estimate that the impact on educational attainment equates to £50.5m of increased lifetime earnings in total. Although the benefits are quantified over the lifetimes of pupils (and therefore for decades into the future) the value is specific to MCR support delivered between 2015 and 2021.
| Qualification grade | Difference between target group and control group (accounting for sample size) | Monetary values (2024 prices) | Benefit of improving educational attainment |
|---|---|---|---|
| Grade A | 380 | £56,902 | £21.6m |
| Grade B | 449 | £45,386 | £20.4m |
| Grade C | 380 | £22,365 | £8.5m |
| Total benefit from improving educational attainment | NA | NA | £50.5m |
Data sourced from: GCSE Attainment and Lifetime Earnings, Department for Education (2021). 2024 prices are calculated using HMT GDP Deflators
Consistent calculations using Approach C and Approach D are available to review in Appendix D. These estimates find that the value of MCR from improving educational attainment is £42.6m according to Approach C and £40.3m according to Approach D. The range of estimates for the value of MCR from educational attainment using Approaches B2, C and D is therefore £40.3m to £50.5m.
Unemployment
Unemployment poses social and economic costs on both individuals and society. Economically, high unemployment leads to a decrease in consumer spending, which can stifle economic growth and lead to a negative multiplier effect throughout the economy. Governments might see reduced tax revenues and increased pressure on welfare systems to support unemployed individuals, contributing to higher budget deficits. Socially, unemployment can lead to severe consequences such as increased stress levels, reduced self-esteem, and potential mental health issues among affected individuals. Long-term unemployment erodes skills, making it harder for individuals to re-enter the workforce. Reducing unemployment through MCR Pathways could therefore come with significant economic and societal benefits.
The value of the economic impact of unemployment is at least partially captured within the assessment of educational attainment on lifetime earnings (above), as we would expect unemployment to push down lifetime earnings. This assessment therefore focuses on valuing the additional social impacts of reducing unemployment, with a focus on wellbeing.
Inputs
Research shows that employment, and therefore unemployment, is one of the most important factors affecting individual wellbeing. A systematic review by the What Works Centre for Wellbeing[19] highlights that unemployed people report lower life satisfaction compared to those who are employed (albeit the effects vary for different groups in different circumstances). HMT Green Book-approved research by Clark et al (2018) estimates the impact of unemployment on wellbeing, which is monetised within the HMT Green Book Wellbeing Guidance for Appraisal at £5,980 per year[20] (£7,353 in 2024 prices). Chapter 3 quantified the impact of MCR Pathways on unemployment for young people nine months after leaving school. However, it is not possible to know the outcomes following those nine months. The monetary estimates are therefore based on an additional nine months of unemployment, which equates to £5,515 in 2024 prices.[21]
Impact estimates
The impact of MCR Pathways on the number of people not in work or study has been quantified in Chapter 3. The findings show that 12% of the MCR Pathways programme cohort were unemployed 9 months after leaving school, compared to 17% among the control group. The estimated effect sizes from B2 were calculated by taking the difference between point estimates for the target group and control groups. As the target group and control group have different sample sizes (the target group has a sample size of 3,442 compared to 2,581 for the control group) the control group averages are applied to the sample size of the target group to estimate a comparable number of pupils unemployed 9 months after leaving school. We have called this the ˜Comparison group which equates to 585 pupils. The difference between the comparison group totals and target group total equates to 172 additional people who would have been unemployed nine months after leaving education in the absence of MCR.
| Attainment measures | Target Group: Total | Target Group (%) | Control Group (%) | Effect Size (%) | Comparison group (control group average x Target Group Sample Size) | Difference (Effect Size x Target Group Sample Size) |
|---|---|---|---|---|---|---|
| Unemployed | 413 | 17% | 22% | -5%*** | 585 | 172 |
| Sample Size | 3,442 | 3,442 | 2,581 | NA | 3,442 | 3,442 |
˜*** denotes findings significant at the 99% level, ˜** denotes findings significant at the 95% level, and ˜* denotes findings significant at the 90% level.
Findings
Applying the monetary cost of nine months of unemployment, which equates to £5,515 in 2024 prices, to the 172 additional unemployed pupils in the absence of MCR Pathways equates to a total of £0.95m value of MCR from reducing unemployment.
| Reduction in unemployment due to MCR Pathways | 172 |
|---|---|
| Costs of individual unemployed for 9 months (2024 prices) | £5,515 |
| Total avoided wellbeing costs from reducing unemployment (2024 prices) | £0.95m |
Source of unit value: HM Treasury (2021) Wellbeing Guidance for Appraisal 2024 prices are calculated using HMT GDP Deflators
Consistent calculations using Approach C and Approach D are available to review in Appendix D. The effect sizes estimated for the impact of MCR on unemployment are the same for Approaches B2, C and D and therefore estimates using all Approaches suggest a value of £0.95m from MCRs impact on reducing unemployment.
Limitations
In some cases, care experienced pupils may have found work at the expense of competing jobseekers and the wellbeing gains may not be wholly additional. However, as the aggregate value of these benefits are a small component of the total benefits from the programme, their exclusion would not significantly affect how the programme compares against relevant Value for Money benchmarks.
Providing opportunities for volunteering
Research has shown that regular volunteering has a significant impact on wellbeing and life satisfaction. The value of benefits to mentors from volunteering in the MCR Pathways programme is therefore monetised alongside the benefits to young people.
Inputs
To estimate the value to voluntary mentors, research by Lawton et al. (2020), which estimates the association between volunteering and subjective wellbeing, is used. This research estimates a wellbeing value of £911 per volunteer per year, on average[22]. Uprated to 2024 prices, the benefit of someone regularly volunteering is £1,066 per year.
Calculations
MCR Pathways follows a strict one-to-one match with volunteers and pupils, and therefore the number of volunteer years is assumed to be the same as the number of years of mentoring that pupils receive across the evaluation period. The available data does not include a quantified estimate of the length of the period over which students participate on the MCR Pathways. Some students may start at the earliest point in S3; however, we know that some students will start in S4. The rollout of MCR Pathways during the evaluation period also means that MCR Pathways may not have been available to students in earlier years.
In addition, pupils leave school at different points (typically at the end of S5 or S6). We do not hold reliable pupil-level start dates or continuous exposure data for mentoring (e.g. session logs) across the evaluation period, and programme roll‘out/matching can occur mid‘year or be paused. In the absence of accurate exposure data, we adopt a conservative central estimate that the average pupil receives two years of mentoring.
Approximating exposure using SQA exam data was considered (e.g. inferring years in school from exams that pupils sit each year). However, this would be a top‘end proxy and risks over‘estimating exposure because it cannot identify when mentoring began, mid‘year starts, or any pauses/early exits. In line with the Green Book proportionality principle, and to avoid overstating benefits, a simple, conservative two‘year assumption is used rather than undertaking a disproportionate matching exercise with residual measurement error.
As there is no comparison group for volunteers, it is not possible to know whether MCR Pathways volunteers would have found other volunteering opportunities in the absence of the programme. Allowing for outcomes that would have taken place without the intervention under consideration is known as deadweight. Without a specific quantification of deadweight for volunteering, a deadweight assumption is taken from the Additionality Guide published by English Partnerships. The guide suggests assuming deadweight of 19% for community and social benefits[23], which is applied to the benefits estimate. In other words, just under a fifth of the benefits from volunteering is assumed to have accrued in a counterfactual where this programme was not implemented.
Findings
The estimates suggest that for the period between 2015 and 2021 the estimated benefits from providing volunteering opportunities equates to £1.62m in wellbeing benefits.
| Annual benefit from volunteering (2024 prices) | £1,066 |
|---|---|
| Number of pupils (equivalent to mentors as per MCR rules) | 940 |
| Years per pupil of participation on MCR Pathways | 2 |
| Total support years provided by programme | 1,880 |
| Wellbeing benefits from volunteering | £2.00m |
| Wellbeing benefits from volunteering with 19% deadweight applied | £1.62m |
Sources: Lawton, R. Gramatki.I, Watt.W, Fujiawara.D (2020) Does volunteering make us happier, or are happier people more likely to volunteer?, English Partnerships (2008) Additionality Guide
Limitations
The value of volunteering is calculated based on an assumption of two years spent volunteering as an MCR mentor; however, this is not backed by data and should therefore be treated with caution. This is in line with the assumption that pupils participate in the programme for two years.
Reducing the number of pupils being excluded and the severity of exclusions
Exclusion from school can carry wide-reaching social and economic impacts. Excluded students experience a disruption in their education, which can result in long-term negative consequences for their personal development. Students who are out of the educational system may fail to acquire necessary skills, reducing their employability and contributing to future economic inactivity or underemployment. The costs extend to schools themselves and wider society, as lower educational attainment can lead to higher public spending on welfare and criminal justice systems, while reducing potential tax revenue from a less skilled workforce.
Inputs
To value the reduction in school exclusions due to MCR Pathways, the costs of exclusions to schools are estimated - specifically, the cost of time from the schools senior leadership through efforts to prevent exclusion, or to mitigate negative outcomes, and additional requirements on teachers to provide ongoing learning support for more lengthy exclusions. This assessment, therefore, excludes the variety of other benefits associated with reducing the number of exclusions, including improved educational attainment, reduced likelihood of pupils becoming involved in further negative outcomes and reduced costs to care providers due to the young person not being at school. These benefits are excluded because they either overlap with other quantified benefits within this assessment or there is a lack of robust research to monetise these outcomes. Research by Zhang et al (2024) provides a range of case studies which explore the costs of different exclusion scenarios including examples from the Scottish education system[24]. Based on these case studies, the estimated cost of an exclusion of up to 10 days is £331 and for more than 10 days is £1,592.
Impact estimates
The impact of MCR Pathways on reducing the number of exclusions and their severity is quantified in Chapter 3. The findings show that 8% of the MCR target group were excluded between 1-5 days in total, 5% for 6-10 days and 7% for more than 10 days equating to 276 pupils, 173 pupils and 242 pupils, respectively. The percentages of pupils excluded in the control group was higher than the target group with 10% of the control group excluded for between 1-5 days in total, 7% for 6-10 days and 12% for more than 10 days. The estimated effect sizes are calculated as the difference of point estimates between the target group and control group. As the target group and control group have different sample sizes (the target group has a sample size of 3,452 compared to 2,590 for the control group) the control group averages for each grade are applied to the sample size of the target group to estimate a comparable estimate of the number of exclusions for the control group across the different length of exclusions which we have called the ˜Comparison group. This equals 345 pupils excluded for 1-5 days, 242 pupils excluded for 6-10 days and 414 pupils excluded for more than 10 days. The difference between the control group totals and target group total which equates to 69 pupils excluded for 1-5 days, 69 pupils excluded for 6-10 days and 173 pupils excluded for more than 10 days represents the additional number of exclusions we would expect in the absence of MCR.
| Exclusions | Target Group: Total | Target Group (%) | Control Group (%) | Effect Size (average additional grades per pupil) | Control Group: Total (accounting for sample size) | Difference |
|---|---|---|---|---|---|---|
| 1-5 days in total | 276 | 8% | 10% | -2%*** | 345 | 69 |
| 6-10 days in total | 173 | 5% | 7% | -2%*** | 242 | 69 |
| More than 10 days | 242 | 7% | 12% | -5%*** | 414 | 173 |
| Sample Size | 3,452 | 3,452 | 2,590 | NA | 3,452 | 3,452 |
˜*** denotes findings significant at the 99% level, ˜** denotes findings significant at the 95% level, and ˜* denotes findings significant at the 90% level.
Findings
Applying the estimated costs of exclusion to the comparison group results in a saving of £0.32m from the impact of MCR in reducing exclusions.
| Number of days excluded | Number of avoided exclusions | Cost per exclusion | Costs saved from reducing exclusions |
|---|---|---|---|
| 1-5 days in total | 69 | £331 | £0.02m |
| 6-10 days in total | 69 | £331 | £0.02m |
| More than 10 days | 173 | £1,592 | £0.27m |
| Total Cost Saving | NA | NA | £0.32m |
Source of unit value: Zhang. K, Tawell. A, Evans-Lacko, S (2024) The costs of school exclusion: a case study analysis of England, Wales and Scotland 2024 prices are calculated using HMT GDP Deflators
Consistent calculations using Approach C and Approach D are available to review in Appendix D. These estimates find that the value of MCR from avoiding exclusions is £0.21m according to Approach C and £0.19m according to Approach D. The range of monetised estimates for reducing exclusions across B2, C and D therefore equates to £0.19m to £0.32m.
Limitations
The cost of exclusions is based on a case study example in the research by Zhang et al. However, the costs to schools of exclusions are likely to vary and therefore we may expect the costs to differ from those suggested.
Social Cost Benefit Analysis
The Social Cost Benefit Analysis (SCBA) brings together the costs and benefits of the programme in monetary terms to estimate:
- The Benefit Cost Ratio (BCR): calculated using a ratio of the present value of benefits to the present value of costs.
- Net Present Value (NPV): the present value of benefits less the present value of costs.
The BCR reflects the monetary value of the benefits to society for every £1 spent, while the NPV represents the extent to which any benefits outweigh the costs incurred.
The table below includes the estimated benefits of MCR Pathways described above. These estimates are in 2024 prices. The HMT Green Book advises the use of a social discount rate to compare social costs and social benefits occurring over different time periods by reflecting the Green Book accounting assumption that society values benefits accrued in the present more highly than benefits deferred to the future. As all costs are in the past, a social discount rate does not need to be applied to these[25]. This is also true for the benefits, apart from the value of improved educational attainment on lifetime earnings. However, these benefits are already discounted by DfE, using the standard HM Treasury discount rate of 3.5% over years 1 to 30, and 3% thereafter. Therefore, no additional discounting is necessary.
| Outcome | Estimated Social Benefit |
|---|---|
| Improving Educational Attainment | £40.3m to £50.5m |
| Reducing Unemployment | £0.95m |
| Providing Volunteering Opportunities | £1.62m |
| Reducing number of pupils being excluded and the severity of exclusions | £0.19m to £0.32m |
| Total Benefits | £43.1m to £53.4m |
| Total Costs | £18.8m |
| Benefit Cost Ratio (BCR) | 2.3:1 to 2.8:1 |
| Net Present Value (NPV) | £24.3m to £34.6m |
Ranges are due to the differing impact estimates across Approach B2, C and D. See Appendix D for full calculations of monetary estimates using Approach C and Approach D.
Aggregating the monetised benefits across all outcomes, the total social benefit of MCR Pathways between 2014 and 2021 is estimated to be between £43.1 million and £53.4 million. Comparing these benefits to the £18.8 million in costs results in a Benefit Cost Ratio of between 2.3:1 and 2.8:1, with a Net Present Value of between £24.3 and £34.6 million.
These results suggest that for every £1 spent on MCR Pathways, between £2.30 and £2.80 of societal benefits are achieved and the societal benefits of MCR Pathways outweigh the costs by between £24.3 million and £34.6 million.
Sensitivity analysis
There are a variety of inputs used in this Value for Money assessment including unit values from existing research. Sensitivity analysis has been applied to compare the estimated costs and benefits of MCR Pathways when the inputs from the impact evaluation are varied. The HM Treasury Green Book recommends identifying a tipping point at which an assumption or model input would need to change so that the benefits no longer outweigh the costs. This therefore sets out the extent to which the inputs would need to change for the MCR Pathways programme to not represent value for money. If the findings were to show that the benefits were highly sensitive to small changes in inputs, then this could highlight a risk that a different use of assumptions in the Value for Money modelling would results in a different assessment. The sensitivity analysis below assesses the impact of changing the following inputs:
- Improvement in educational attainment and average lifetime earnings from improved educational attainment
- Average annual wellbeing value from avoiding unemployment
- Average cost to schools from pupil exclusions
- Average annual wellbeing benefit from volunteering
| Input | Estimate | Tipping Point |
|---|---|---|
| Average lifetime earnings from improved educational attainment |
The value of a grade in terms of lifetime earnings (2024 prices) is estimated to be:
|
The value of Grade A, Grade B and Grade C would need to fall uniformly by around 68% for break-even to occur |
| Impact of MCR on grades achieved |
Number of additional Grade A, Grade B and Grade Cs achieved:
|
The number of additional A, B and C grades achieved would need to fall uniformly by around 68% for break-even to occur |
| Average annual wellbeing value from avoiding unemployment | £5,515 is the cost in monetary terms of reduced wellbeing from being unemployed for 9 months (2024 prices) | The benefits of MCR outweigh the costs without the inclusion of the benefits of reducing unemployment |
| Average cost to schools due to an exclusion | £331 is the cost of an exclusion for 1-10 days and the cost of a more than 10 days exclusion is £1,592 (2024 prices) | The benefits of MCR outweigh the costs without the inclusion of the benefits from reducing exclusions |
| Average annual wellbeing benefit from volunteering | £1,066 is the value in improved wellbeing from volunteering consistently for 1 year (2024 prices) | The benefits of MCR outweigh the costs without the inclusion of the benefits of volunteering to wellbeing |
Sources: GCSE Attainment and Lifetime Earnings, Department for Education (2021) Lawton, R. Gramatki.I, Watt.W, Fujiawara.D (2020) Does volunteering make us happier, or are happier people more likely to volunteer? Zhang. K, Tawell. A, Evans-Lacko, S (2024) The costs of school exclusion: a case study analysis of England, Wales and Scotland HM Treasury (2021) Wellbeing Guidance for Appraisal
The sensitivity analysis shows that the value for money of MCR Pathways (whether the benefits outweigh the costs) is not sensitive to the assumptions. For example, the monetised estimates of improved educational attainment would have to be substantially lower for the costs to outweigh the benefits. This sensitivity analysis therefore provides further confidence of the value for money of MCR Pathways.
Additional benefits
There are likely additional benefits from MCR Pathways which have not been quantified as part of the impact evaluation and, therefore, it has not been possible to include these benefits in the Social Cost Benefit Analysis. There are also some benefits that cannot be included within the core benefits assessment as they would likely double count with those outcomes that are included (notably from improved educational attainment, reduced unemployment and fewer exclusions). It is, however, worth considering the additional benefits MCR Pathways might create, alongside the fully monetisable impacts included within the Social Cost Benefit Analysis, to provide a more comprehensive picture of the benefits of the programme. Indicative unit values for these benefits are presented from the literature to inform future evaluations. These values are not added to the BCR/NPV and should be interpreted cautiously, especially where sources are England‘specific rather than Scotland‘specific.
Additional educational attainment benefits
As set out in the core benefits section, the monetised benefits of educational attainment on lifetime earnings are only assessed for grades achieved at S4 for Level-5 qualifications. This is because the benefits of achievement at S4 are likely to be highly correlated with achievement at S5 and S6 (i.e., SCQF Level-6 and Level-7). Capturing lifetime earnings impacts from improved achievement across all these qualification levels would likely cause double counting and over estimation.
This section summarises plausible additional educational attainment outcomes that MCR Pathways may influence but which we have not included in the core Social Cost Benefit Analysis.
The impact assessment estimates show evidence that achievement at SCQF Level-4 was also improved by MCR Pathways. Level-4 qualifications are assessed as pass or fail internally by a teacher and learners need to pass all units, including the added value unit, to achieve a qualification. These qualifications are often seen as an important gateway into SCQF Level-5 qualifications. The estimates below show the impact on the mean number of Level-4 qualifications per student using impact estimates from Approach B2. The estimates show that in the absence of MCR Pathways we would have expected that on average students would achieve 2.36 Level-4 qualifications whereas the target group achieved 2.46 Level-4 qualifications. Accounting for the differences in sample size between the target and control groups this equates to 345 Level-4 qualifications which would not have been achieved in the absence of MCR.
| Mean Level-4 qualifications, Base. In S4 from 14/15 to 21/22 | Target Group: Total number of quals | Target Group: Average number of quals | Control Group: Average number of quals | Effect size | Control Group: Total Number of quals | Difference (Effect Size x Target Group Sample Size) |
|---|---|---|---|---|---|---|
| Number of Nat-4 quals | 8,492 | 2.46 | 2.36 | 0.10*** | 8,146 | 345 |
| Sample size | 3,452 | 3,452 | 2,590 | NA | 3,452 | 3,452 |
˜*** denotes findings significant at the 99% level, ˜** denotes findings significant at the 95% level, and ˜* denotes findings significant at the 90% level.
There are no relevant monetised estimates of the benefits from attainment of Level-4 qualifications which could be used to monetise these impacts.
The impact assessment estimates from Approach B2 also show a 4 percentage-point improvement in students achieving at least 3 Nat-6 qualifications and a 2 percentage-point increase in students achieving 5 or more Level-6 qualifications. Accounting for the differences in sample sizes between the control group and target group this equates to 138 pupils and 69 pupils, respectively. Similarly, there is a positive impact on pupils achieving at least 1 Level-7 qualification equal to 1 percentage point or 69 pupils.
| Attainment measures | Target Group: Number of pupils | Target Group (%) | Control Group (%) | Effect size | Comparison group (control group average x Target Group Sample Size) | Difference (Effect Size x Target Group Sample Size) |
|---|---|---|---|---|---|---|
| 3+ Nat-6 (Highers) | 449 | 13% | 10% | 4%*** | 345 | 138 |
| 5+ Nat-6 (Highers) | 242 | 7% | 5% | 2%*** | 173 | 69 |
| 1+ Nat-7 | 173 | 5% | 3% | 1%** | 104 | 69 |
| Sample Size | 3,452 | 3,452 | 2,590 | NA | 3,452 | 3,452 |
˜*** denotes findings significant at the 99% level, ˜** denotes findings significant at the 95% level, and ˜* denotes findings significant at the 90% level.
Again, there are no relevant monetised estimates of the benefits from attainment of Scottish Highers (Level-6 qualifications). The most relevant estimates from the existing literature come from the Department for Education who have estimated the benefits of A-Level qualifications in England. These estimates show that there are large lifetime income benefits from completing two or more A-levels, compared to holding 5-7 good GCSEs. The marginal lifetime gain is around £90,000 for men and £76,000 for women.
In addition, the impact assessment shows an impact of MCR Pathways on pupils going on to Higher and Further Education.
| Post-school destinations at 9 months | Target Group: Number of pupils | Target Group (%) | Target Group (%) | Effect size | Comparison group (control group average x Target Group Sample Size) | Difference (Effect Size x Target Group Sample Size) |
|---|---|---|---|---|---|---|
| Higher Education | 344 | 10% | 7% | 3%*** | 241 | 103 |
| Further Education | 1,170 | 34% | 29% | 5%*** | 998 | 172 |
| Sample Size | 3,442 | 3,442 | 2,581 | NA | 3,442 | 3,442 |
˜*** denotes findings significant at the 99% level, ˜** denotes findings significant at the 95% level, and ˜* denotes findings significant at the 90% level.
Research shows that achieving qualifications at higher and tertiary education levels significantly impacts lifetime earnings. For example, the PwC (2016) Economic Returns to Education report found that the marginal return to a degree is around 21% for men and 29% for women [26] meaning graduates earn this much more on average compared to peers who stopped their education at A-levels (Level 3). In monetary terms, the Institute for Fiscal Studies estimates this 'graduate premium' translates to an average net lifetime boost of around £130,000 for men and £100,000 for women. However, it is important to note that this is an average; the actual financial return varies drastically depending on the subject studied and the institution attended. Degrees in Medicine or Economics can yield a lifetime premium exceeding £500,000, whereas some degrees in the creative arts may offer little to no financial premium over non-graduates.
Reduction in crime
According to ONS data, more than half (52%) of looked-after children who attended school had a criminal conviction by the age of 24 compared to 13% of children who had not been in care[27] (statistics for England only). Imprisonment was an unusual outcome; however, 1 in 7 (15%) looked-after children had received an immediate custodial sentence by the age of 24 years, over ten times the proportion of children who had not been in care who received custodial sentences. MCR Pathways may help support a reduction in crime by empowering young people and giving them positive role models and support, which can help them avoid risky behaviours. This aligns with qualitative findings from the evaluation of the delivery of the programme that MCR Pathways enhances social capital. The HMT Supplementary Green Book Guidance for crime[28] provides a range of unit costs for types of crime, for example the unit cost of robbery is estimated at £11,320 in 2019 prices (£13,919 in 2024 prices). However, these sources are derived from data in England and therefore may not be directly transferable to a Scottish context and should be considered indicative only.
Reducing homelessness
The impact of MCR Pathways on homelessness is not covered in the impact evaluation and therefore is not included as part of the core benefits. However, MCR Pathways could potentially have an impact on preventing homelessness by supporting young people who may be at risk due to their circumstances. This is supported by first-hand accounts of children experiencing homelessness who have received mentoring support through MCR Pathways[29].
Research by the charity Crisis[30] from 2016 shows that people who experience homelessness for three months or longer cost an annual average of £4,298 (£5,607 in 2024 prices) per person to NHS services, £2,099 (£2,738 in 2024 prices) per person for mental health services and £11,991 (£15,642 in 2024 prices) due to contact with the criminal justice system. Furthermore, reducing the demand on housing services, such as emergency accommodation, would come with additional monetary benefits. The Centre for Excellence for Childrens Care and Protection estimate that around 30% of care leavers in Scotland become homeless at some point[31].
The potential for MCR Pathways to reduce homelessness should be considered a theoretical pathway - with unit values for future analysis - rather than an established, present-day benefit.
Improving school attendance
The impact evaluation did not find a statistically significant impact on attendance at S4 and S6 with a 4.4 percentage point improvement at S5 according to Approach B2 only. According to these estimates MCR Pathways may have had some impact on improving school attendance at S5.
Improving attendance can make a significant improvement to pupils life opportunities; a research report for the Department for Education finds that, based on pupils in England and Wales, a day of absence is worth around £750 in lifelong earnings on average[32]. Consistent absence also impacts on schools and supporting authorities in terms of resources needed to follow up on absences. The cost of unauthorised absences in England have been estimated within the report ˜Misspent Youth: The cost of Truancy and Exclusion[33]. The report estimates the costs to education authorities from truancy of £706 per pupil per year in 2005 prices (£1,144 in 2024 prices).
However, because the evidence of monetary benefits from school attendance is either weak (costs associated with the administration of unauthorised absence is out of date and not specific to Scottish system) and would be considered double counting with the benefits of educational attainment, the benefits of reducing school absence are therefore considered potential additional benefits and not included within the core benefits assessment.
Avoiding NEET outcomes
The term NEET (young people Not in Education, Employment, or Training) refers to young people (typically aged 16-24) who are not engaged in any form of education, are not employed, and are not participating in training programmes. Research by the University of York (2009) finds that the average lifetime costs associated with those experiencing NEET outcomes between the ages of 16 and 18 includes[34]:
- £56,300 (£81,233 in 2024 prices) per person in public finance costs, which includes the direct cost to the taxpayer through benefits, lost tax revenue, housing, health and justice costs.
- £104,300 per person (£150,489 in 2024 prices) in resource costs, which includes the wider cost to the economy such as lost productivity and welfare to individuals and families.
The majority of these costs are a result of underemployment due to educational underachievement, unemployment and economic inactivity. The majority of the public finance costs consist of payments in unemployment benefits and Housing Benefit to those who are not working, and tax losses through direct taxes and reduced indirect tax yields due to lower consumer expenditure. Given that the monetary benefits of employment and unemployment outcomes are already included in the core assessment, and that we lack information about pupils employment, education and training status more than nine months after leaving school, we do not include these costs in the core benefits assessment. However, they illustrate that there are potentially large and wide-reaching benefits to the economy and public finances from reducing NEET outcomes.