cost ben prevention presentation

							Benefits of prevention

How to demonstrate a return on
investment from homelessness
         prevention
 Important messages to get across
• Homelessness has not gone away its just being
  dealt with better

• The return on investment of not funding
  prevention is very short term and very risky

• Prevention is a very effective way of
  discharging your statutory duty re
  homelessness
      Basics stuff to demonstrate
• How much each prevention outcome costs to deliver

• How much each homelessness acceptance costs

• The counter factual case

• What difference you have made already

• What return on investment you can deliver
     Fancy stuff to demonstrate
• Cost per outcome for different client groups

• The wider savings or return contributed by
  prevention

• Benchmarking with other providers

• The human cost
                 Definitions
• Cost to outcome is not the same as unit cost

• Cost to outcome is the total cost of delivering
  a service divided by the number of people
  getting a sustainable outcome

• Unit cost is the cost of service divided by the
  number of people seen
           Counter factual costs
Negative outcome                            Basic cost per episode
Processing homelessness application         £5,300
Letting a property                          £1,500
Eviction resulting from arrears             £5,000
Young person in a hostel                    £8,600
Woman in a refuge                           £8,650
Young person looked after                   £16,500
Mental health in patients stay              £7,300
Reoffending                                 £34,500 (minimum)
Unemployment (1 person)                     £23,000


   Not all these costs will be important to your finance director
   Some basic input costs to ponder on
Intervention                               Cost to outcome
Mediation                                  £806
Night-stop                                 £320
Sanctuary                                  £96
Bond scheme                                £350
Resettlement of offender                   £350
Employment mentoring                       £512
Money and debt advice                      £208


These figures are taken from some recent work done in a local authority

Your costs may vary but you can use them as an initial benchmark
               Counter factual returns
Client group                                            Conservative estimate of
                                                        the potential returns from
                                                        prevention
Young person; family no longer willing to accommodate   £19,000
Mortgage rescue                                         £25,000
Family facing eviction due to arrears                   £15,000
Offender                                                £45,000
Woman fleeing domestic violence                         £35,000


You could expect to see a return as high as 1:8
        Examples of inputs to include
Input                                            How you can use this
Management of the Housing Options service (HO)   To come to a core cost per
HO staff costs                                   client interaction

Office and running costs
Bond scheme                                      To calculate cost of
Sanctuary scheme                                 prevention outcomes

Private sector liaison
Mediation
Prevention grant payments
Court desk
Example of how you can calculate and use these

• Core Cost of basic HO intervention
  Cost of team management + cost of office costs + cost of staff
          Number of people making contact with service

  This equals your basic core unit cost

                    £45,000 + £23,500 + £85,500
                         1000 approaches

  Basic core unit cost = £153 (this is not a cost to outcome)
        Cost to outcome: young person
               remains at home
Item                                       cost
Basic core unit cost                       £153
Weekend stay at Night Stop                 £320
Mediation                                  £806
Total                                      £1,279

To arrive at the costs above we took the whole cost of the Night Stop and divided it
by the number of young people getting a positive outcome.

E.g. £15,000 / 46 young people (who have returned home and stayed their!)

The unit cost would be

£15,000 / 89 young people who used it which makes the cost seem lower BUT…
                 Return on investment
Counter factual young person
Homelessness Application       £5,300
Hostel accommodation           £8,600
Sub total                      £13,900


Cost for prevention outcome              £1,279


Potential cost savings                   £12,621
             Cost to outcome
• Is a better measure of service effectiveness

• Gives a truer picture of the benefits or returns

• Acknowledges that not everything works for
  everyone
 Meanwhile back in the real world
• Just because you can demonstrate return on
  investment does not mean it changes people’s
  decision making…

• Choices about cuts are as much about politics
  as they are about finance
            Things to start on
• Collect case studies

• Track your inputs to get successful outcomes
  for different client groups

• Get accurate budget info and costs lined up

• Make sure all preventions are recorded
             Help is at hand…
• We are working with a few local sites on more
  detailed work to develop a tool kit you can all
  use
break
   Thinking like a Finance Director
• In order to stand out from the other service
  areas you need to start thinking like a Finance
  Director

• Not all Finance Directors are the same BUT
  they do worry and think about similar things
    Five things your Finance Director is
    least likely to respond positively to
• Being made to feel that they are ruthless and heartless
  beasts
• Being presented with math that does not add up
• Being presented with reports making wild claims about
  potential savings
• People assuming that they get a kick out of cutting budgets
• People assuming they have the power to decide things

Oh and another few things not likely to go down well….
• Being poked in the eye
• Having their dinner money stolen
• Using their parking space
   Five things your Finance Director
      might respond positively to
• People demonstrating that they understand
  the pressure on them
• People showing their workings out when they
  present a case to them
• People appreciating the skill they have and
  asking for advice
• People clearly demonstrating what works and
  the cost of it
• People not shroud waving
                   exercise
• Imagine you are the Finance Director (I know
  but try…)

  – What do you want to know about the Housing
    Options Team?
  – What will make them stand out from other teams
    or departments bleating about cuts?
  – What are the deal makers?
  – What are the deal breakers?