Reflections on Unit Costing Work

1
Reflections on Unit Costing Work

• Focusing on a cost-benefit analysis of two
  services within a Sure Start programme
• (Chris Brain)

2
Aims of this session

• To outline what was done for this cost-benefit
  analysis of the two services
• To look at issues involved, and decisions made
• This will be a quick run through!
• NOTE this analysis was started in 2002, without
  reference to NESS guidelines
• NOTE permission from the Programme has been
  obtained

3
Aims of the Analysis

• The Sure Start Unit were talking about the
  importance of cost-benefit analysis
• This programme wanted to find out how they were
  doing
• They wanted to practice
• They wanted something manageable
• Started in 2002

4
Methods

• Finance Manager worked out all the necessary
  costs
• Practitioners noted numbers of children and
  adults, as well as their own hours
• Case studies were carried out using observations
  and interviews

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What is cost benefit analysis?

• Analysis of costs, analysis of benefits
• Accountability
• Mainstreaming
• Monitoring for Sure Start Unit
• Internal purposes - learning from evaluation

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What are costs?

• Outlay costs are payments out
• Imputables are what would cost something but are
  donated free of charge
• Some costs are mixed in with other budgets
• So costs are outlay a proportion of other
  budgets imputable costs

7
What are benefits?

• Number of children attending
• Number of adults attending
• Improved language ability
• Quality measures like happier family
• Quality measures like happier child
• Future measures such as what intervention would
  cost at a later stage if needed

8
Choice of settings 1) Language Scheme

• Language team input
• Discrete, half-hour sessions with clear purpose
• One-to-one provision, with parent present
• 4 settings (3 primary school, 1 shop) and home
  visits

9
Choice of settings 2) Drop in

• Drop-in facility
• Supports some adult provision such as ESOL, Keep
  Fit, Asian Womens Group
• 2.5 to 4 hourly sessions
• A central facility and will be central in new
  Children and Family Centre

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Some definitions of terms (1)

• Outlay costs are those paid out
• Imputables refer to what is donated by other
  agencies
• E.g. building rent given free by schools but
  costed at 28 per session in the analysis
• E.g. volunteers give time free but costed at
  4.20 per hour in the analysis

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Some definitions of terms (2)

• True costs are what the service would cost
  without the Partnership (imputable costs added)
• Actual costs take outlay costs into account but
  allow donated services to be free
• Future costs are what the service will cost
  (e.g. Language scheme will have more volunteers)

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Data gathered

• Four months chosen Oct 02, Jan 03, Apr 03, July
  03 as representative
• Numbers of children and adults recorded
• Number of minutes provided recorded
• Costs calculated (including imputables of every
  sort)

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Language Scheme true costs

• Cost per month plus imputables 2,189.08
• Time scheduled per mth in hrs 30.42
• Actual Children per mth 34
• Adults per month 34
• Cost per hour 71.96
• Child per hour 1.12
• Cost per hour per child per hr 64.25

14
Language Scheme actual costs

• Cost per month (no imputables) 1,636.75
• Time scheduled per mth in hrs 30.42 hrs
• Actual Children per mth 34
• Adults per month 34
• Cost per hour 53.80
• Child per hour 1.12
• Cost per hour per child per hr 48.08

15
Language Scheme some conclusions

• Clinic rates v Partnership rates (82.70 v
  64.25)
• True v actual rates (64.25 v 48.04)
• If take up rate higher (currently 55.7)
• If adults are said to benefit too
• A question of averages (all 13 home visits, 16
  out of 22 at shop)

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Data gathered Drop in

• Staff costs 18,906
• Premises 6,492
• Communication 195
• Equipment 1,419
• Sundries 781
• TOTAL (annual) 27,793
• Of staff costs 4,107 are imputable costs

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Drop in - costs

• Cost per month (no imputables) 2,316.08
• Time per month in hours 53.62 hrs
• Children per month 114
• Cost per hour 43.19
• Child per hour 2.13
• Cost per hour per child per hr 20.28

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Drop in some conclusions

• Staff hours v child hours (138.12 v 53.62 means
  2.58 staff for each hour)
• Number of children per session (8 for 4 hours is
  costed at 2 per hour)
• Adults benefit too but not counted
• Partnership holistic approach (picking up on
  issues, working with families benefits)

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Case study evidence

• Parents appreciate services
• Attendance at Language Scheme more likely than at
  clinic setting
• Language progress at Scheme clear
• Drop in encourages (in child) confidence, social
  skills, (in adult) sharing and support

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Overall conclusions (1)

• Language Scheme costs more than Drop in (around
  three times as much)
• Take up rates are low for both (but better than
  national clinic rates re Scheme)
• Benefits can appear later so hard to judge
• Partnership holistic working is important
• Figures use true costs not actual costs
  (mainstreaming?)

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Overall conclusions (2)

• By giving a cost to everything, there has been a
  lot of honesty so a worse case scenario - not
  really accounting for Partnership working
• Benefits of early intervention are very hard to
  quantify
• Case study evidence is clear services are
  appreciated

22
References (1)

• Karoly, L. A., Greenwood, P. W., Everingham, S.
  S., Hoube, J., Kilburn, M. R., Rydell, P.,
  Sanders, M., Cheisa, James. 1998 Investing In
  Our Children What We Know And Dont Know About
  The Costs And Benefits Of Early Childhood
  Interventions RAND

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References (2)

• Meadowes, P., 2001 Guidance for Sure Start Local
  Evaluators On The Estimation of Cost
  Effectiveness National Institute of Economic and
  Social Research
• Moran, R., Myers, R., Zymelman, M. 1997 The
  uses of cost analysis in Early Child Care and
  Development (ECCD) programs Inter-American
  Development Bank

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References (3)

• Holtermann, S., 2001Childrens Centres
  exploring the costs of delivery of a national
  scheme Daycare Trust Facing the Future Policy
  Papers
• Holtermann, S., 2002 Childrens Centres
  exploring the costs of delivery of a national
  scheme supplementary note Jan 2002

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References (additional)

• Universal childcare provision in the UK towards
  a cost-benefit analysis. Discussion paper by
  PricewaterhouseCoopers. August 2003.
• www.pwc.com
• NOTE this was a paper published after we had
  done the analysis and report, so not used.

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Contact details

• Chris Brain
• Centre for Research in Early Childhood, St.
  Thomas Centre, Bell Barn Road, Attwood Green,
  Birmingham. B15 2AF
• 0121 464 0029
• C.brain_at_crec2.org.uk