Cost Benefit Analysis of Groundwork impact

Rob1An important part of demonstrating our value to funders, partners and potential customers is measuring our achievements and analysing the impact of our work. We have traditionally captured both quantitative and qualitative data for each project and programme as well as annually through our project performance measures that we report to Department for Communities and Local Government.

Using this data we are able to assess the value and benefits of Groundwork to our various stakeholders. We have previously worked with CLES and Sheffield Hallam University to quantify the value and benefits of activities undertaken by our collective federation of Groundwork Trusts across England, Wales and Northern Ireland.

More recently however we have been exploring the use of a Cost Benefit Analysis (CBA) model developed by New Economy with assistance from the Technical Advisory Group – a joint group of analysts from Central Government and GM. New Economy have developed and continue to refine a CBA model that can identify the fiscal, economic, and social value of project outcomes, and specify which public agency sees this benefit. I benefitted from the excellent New Economy training last year and thought it provided real insight into how commissioners can assess the potential cost savings of delivering services in different ways.

“Across Greater Manchester the public sector is piloting new and innovative ways of working. New Economy, with support from central government, is helping to demonstrate the amount of taxpayers’ money that can be saved by these new ways of working and the impact they can have on the quality of services enjoyed by Greater Manchester residents.” New Economy website

As part of the CBA model, New Economy has also compiled a Unit Cost Database. This database can be used by organisations to calculate the potential cost savings of programmes to areas such as crime, education & skills, employment & economy, fire, health, housing and social services.

We recently used these resources to calculate the benefits of our Back on Track project in Rochdale. The NHS Heywood, Middleton and Rochdale CCG funded project offers mental health support within Groundwork’s mainstream DWP Work Programme to help long term unemployed ESA claimants move towards employment.

From a £25k investment from the HMR CCG, the fiscal benefits can be calculated as:

  • To October 2014, £6.6k from an ESA claimant entering work, £14.7k in 2014/15, and a predicted £68k in 2015/16
  • To October 2014, £22,9k from diverting adults away from mainstream mental health service provision, £38.2k in 2014/15, and a predicted £57.4k in 2015/16.

We are increasingly aware of the tools to measure cost-benefit analysis and social value of our programmes, using such calculations to identify invest-to-save models for local commissioners. The more third sector organisations are able to demonstrate the true value of their delivery,  the more commissioners will be able to see that we can deliver more ‘bang for your buck’.

Robert Glenn, Work & Employability Manager

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