MAKING THE CASE

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“In our time, the curse is monetary illiteracy, just as inability to read plain print was the curse of earlier centuries.” Ezra Pound

What we will cover

1. About Creative Councils 2. Why a business case?3. Tools for making the case4. Existing evidence5. Practical steps 6. Using results7. Q&A

Creative Councils:

• NESTA/LGA Challenge Prize supporting 17 Councils

• Focus on radical innovations to solve problems

• Tackling issues such as ageing society, sustainable

growth and increasing demand on services

• 2 year programme

• Tools and lessons will be shared with other councils

Community Engagement Webinars

• Part of Creative Councils support • Online webinars focussing on different

aspects of local community engagement• Every two weeks on a Friday Lunchtime• Runs February to April• Free and open to anyone to attend• Recordings of past webinars will be posted

online

• Registered Charity (nr. 1130568)• Focus: Public and stakeholder engagement• Works with: Central & local government.

Health organisations, NGOs and International Organisations•www.involve.org.uk

About

"I am extremely uncomfortable with the idea that someone will decide whether or not 'participation' is 'economically viable'. The question should be whether there is scope for the participant to change things. Not will their participation be 'cost effective'"

Respondent to Involve 2005

Making the case

• It’s a good thing• It’s a democratic right• Improves wellbeing• Inclusion of marginalised groups• Empowerment of marginalised groups

Why articulate the business case?

• Dealing with cuts agenda• Accountability for tax payer money• Clarifying for internal audience• Clarifying for external audience• Achieving long term savings

“We really have no idea how much we spend on participation, it tends to be cobbled together from different budgets at the end of the financial year".

Local Authority Chief Executive

Why do we know so little?

• New field• Intangible benefits• Distributed benefits• Costs hard to unpick• Unclear what is cost and what is benefit• Fear/hiding costs

Economic Evaluation

• Cost-benefit analysis• Cost-effectiveness analysis • Cost-minimisation analysis • Cost-consequences analysis • Social Return On Investment

Evaluation vs Business case

Evaluation• Academic• Complete• Time consuming • Truth

Business case• Practical• Incomplete • As much time as you have• Good enough

Public Goods

• non-rival (one person's use of the good does not reduce some one else's use of it) and

• non-excludable (it is very difficult to exclude anyone from gaining benefits from the good).

Other concepts

• 'Deadweight' - used to describe what would have happened anyway.

• 'Additionality' - the economic effects after the deadweight has been discounted.

• 'Displacement' - productivity benefits that are offset by reductions elsewhere.

In short...

Understanding can be greatly enhanced but evidence will always be incomplete.

Questions?

“Nowadays people know the price of everything and the value of nothing.”

Oscar Wilde

Costs and Benefits of Engagement

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Costs

• Programme costs• Non-programme costs• Participant costs

Benefits

• Improved governance• Greater Social Cohesion• Quality of Services/Projects• Capacity Building/Learning

Specific Benefits

• Innovation and creativity• Avoiding conflict• Access to new resources• Continued development / maintenance• Better quality outcomes• Information and expertise• Increased public awareness and understanding• Sharing responsibility• Increased use• Staff morale

Non-monetary benefits

• Active citizenship• Stronger communities• New organisations and structures• Behaviour change• Trust and social capital

Non-monetary benefits

• Revealed preference • Stated preference

– Willingness to pay– Willingness to accept

• Benefits transfer

Distributional impacts

Total Place:• 200 to 300 families described as ‘chaotic’ each

cost public services in the Croydon around £250,000 each year

• £50,000,000

Risks

• Financial risks • Performance risks • Reputational risks • Opportunity risks

Benefits -resilient community networks

Monetary value

Measured by Non-monetary value

Access to new funding and volunteering time

Database of funding accessed before and after engagement. Time sheets for volunteers

Survey results

Benefits - Increase trustMonetary value Measured by Non-monetary valueReduced spend on complaints

Staff work diaries/time sheets, complaints listings

Reported trust levels, NI4 scores, about people feeling able to influence decisions

Benefits - Quality of services Monetary value Measured by Non-monetary valueBetter service outcomes (health, crime etc), less time spent on administration and duplicated work , less complaints

Staff work diaries/time sheets, neighbourhood level service statistics, health and crime statistics

Service user satisfaction

Benefits - Take difficult decisions Monetary value Measured by Non-monetary valueReduced conflict and reduced spend on legal challenges

Legal costs, staff work diaries/time sheets, complaints listings

Number of negative articles in press, survey results

Benefits –good community relations

Monetary value Measured by Non-monetary valueReduced vandalism and crime in local area

Crime statistics Survey results

Replacement costs New resource Replacement costIncreased volunteer time The cost of providing the service or

activity using paid staff New intelligence and information The cost of gathering the same

information using a market research company

New and improved relationships The cost of building the same links through a PR and communications exercise

Increased public awareness of policies and services

The cost of achieving a similar level of awareness through campaigns or PR

Tools

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LogframeGoals/ purpose

Possible indicators

Monetary measures

How to get data

Important assumption

What are you trying to do?

How will you know if you are successful?

Can you estimate a money value on any of the indicators?

How can you gather this information?

What are the assumptions in choosing this measure of success?

LogframeGoals/ purpose

Possible indicators

Monetary measures

How to get data

Important assumption

Logframe -exampleGoals/ purpose

Possible indicators

Monetary measures

How to get data

Important assumption

We want to increase the responsiveness of services to users following public consultation events.

If we are successful we should see a change in the number or type of complaints about the service.

.

The time-spend of complaints staff has a monetary value and can be quantified

Record number of complaints per month around this service and assess the average length of a complaint.

We are assuming that time sheets are accurately filled in. This may need to be checked.

Comparators

• Do nothing• Status Quo• Alternative engagement methods • Alternative means of achieving the benefits

Example -English Nature Humber Estuary Designation • English Nature engagement to inform legal

protection for wildlife in the Humber Estuary. • Previous designation plans met with hostility

and were withdrawn. • Previous conflict led to legal fees of £75,000.

Cost of conflict

Conflict can be extremely expensive: DEFRA and the Environment Agency (2005) estimate that around 5% of all permit application took in excess of 500 hours work to process and 1% took over 1,000 hours.

Humber: Costs and benefits

Costs of engagement Staff cost: £50,000Displays and PR: £8,000 Admin: £5,000 Postage: £2,000 Travel: £1,170 Press briefings: £1,000 Total: £67,170

Benefits of engagement Legal Costs saved: £75,000

Total: £75,000

Value of engagement: £7,830

“The only man who behaves sensibly is my tailor; he takes my measurements anew every time he sees me, while all the rest go on with their old measurements and expect me to fit them.”

George Bernard Shaw

Using the Involve Toolkit

Heartland Community Voice (Portsmouth)• Bin fires in area:

– 154 in 2006 – 135 in 2008.

• Each case of criminal damage estimated at £856 around 4.29 crimes remain unreported for every reported case.

• Potential saving of £69,772.56 per year• Also non monetary benefits: increased

volunteering, levels of satisfaction

Involve toolkit:

• Costs that can be given a monetary value • Benefits that can be given a monetary value • Costs that cannot be expressed in monetary

terms • Benefits that cannot be expressed in monetary

terms

Stage 1 - Scope the business case

• Decide how you will use the toolkit • Decide who your audiences are• Decide if monetary valuation is appropriate for

you

Stage 2 –Define focus and purpose

• Decide the focus for the business case• Clarify the intended purpose and outcomes• Consider possible comparator areas/ projects

Stage 3 -Decide what to measure

• Identify what can be given a money value and what can't

• Identify who you need help from to obtain the data

• Identify where proxies might be appropriate

Stage 4 Complete checklist & chart

• Understand your data and assumptions• Gather the data you need • Fill in the checklist and calculation chart• Use spreadsheets to track costs and benefits

Stage 5 -Analyse results

• Try out different methods of analysis, for example SROI, Cost benefit, Cost-effectiveness

• Understand the limitations of the data• Test results with colleagues

Stage 6 -Present the business case

• Select appropriate presentation format• Present the business case• Adapt to feedback

Example -Probability

• The Environment Agency engaged to build trust in flood defence schemes:

• Flood mitigation benefit £35-40 million • Engagement £2 million • To be cost effective in future probability of

success must increase by 5.7% (£2 m/£35m). • Engagement needs to change the result from

rejection to acceptance in 1 case in 20 to be worthwhile.

Problems and solutions

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Communicating the result

• Use the business case to tell stories• Tailor your argument to fit your audience• Seeing is believing • Anecdotes can be powerful• Don’t forget the potential costs of non-

engagement• Theory of Change

Doncaster furniture recycling exampleBenefits to council• 488 tonnes of waste

diverted from landfill, saving approximately £20,000 in landfill tax payments.

Benefits to clients • 4000+ low-income

households received goods –estimated supplying same families with second-hand goods would have cost £140,000 with existing market prices.

Links

• http://www.involve.org.uk/wp-content/uploads/2011/07/Making-the-Case-for-Public-Engagement.pdf

• http://www.involve.org.uk/wp-content/uploads/2011/07/Calculating-costs-and-benefits-with-comparator.xls

Links 2

• http://healthandcare.dh.gov.uk/economic-case-for-ppi

• http://www.demsoc.org/static/Financial-Case-white-paper.pdf

• http://www.idea.gov.uk/idk/core/page.do?pageId=17455595

“It is better to be roughly right than precisely wrong”

John Maynard Keynes

involveRoyal London House 22-25 Finsbury Square London EC2A 1DXt: 0 20 7920 6470e: edward@involve.org.uktwitter: ed_andersson