Troubled Families Cost Savings Calculator: An Introduction - May, 2014 Department for Communities and Local Government

Troubled Families Cost Savings
          Calculator:
       An Introduction

                                                 May, 2014

            Department for Communities and Local Government

This is an introduction to the Cost Savings Calculator, which explains the benefits of
this tool both as a way of evaluating your local service and as a means of
demonstrating the value of the programme nationally. Technical guidance on getting
started on the Cost Savings Calculator has been made available alongside this.

What is the Cost Savings Calculator?

The Cost Savings Calculator is a tool to enable you to identify the benefits that
derive from your troubled families programme. It is principally a means to undertake
a cost benefit analysis of your programme but through the process of doing this it
will enable you to identify changes in behaviour across your cohort of families, thus
demonstrating what working differently with families can achieve in social policy
terms. Putting these social policy and fiscal benefits together, this tool can help
deliver an effective response to families and drive service transformation.

Why a cost benefit analysis

A key premise of the Troubled Families Programme is that investment in family
intervention can reap rewards not only in changing the behaviour of families by
tackling the underlying problems in that family but also in reducing the need for
reactive services which have to respond to the problems that a family has or that a
family causes. For example, police call outs, court cases or evictions. This
investment therefore saves money which can be spent elsewhere.

A robust cost benefit analysis is a very valuable way of demonstrating that this
premise is correct. Cost benefit analysis (CBA) is a technique used to identify and
put a monetary value on the extra costs and extra benefits that result from a change
in the way services are delivered. In this case, the changes made to local services
as a result of the Troubled Families Programme which began in April 2012. Using a
CBA you should be able to establish the impact which the Troubled Families
Programme has had in your area in terms of savings made, compared to the way
services were delivered before the programme started.

The Cost Savings Calculator (CSC) is a practical means of carrying out a cost
benefit analysis and has been designed specifically to be used for the Troubled
Families Programme as opposed to a generic cost benefit analysis tool. It therefore
allows you to cost the kinds of problems that troubled families have both before and
after being part of the programme – across crime, anti-social behaviour, domestic
violence, education, health, housing, child protection, training and employment. In
addition it separates out actual financial costs from the social and economic costs
thereby enabling you to isolate the money you are spending and saving. Isolating the
financial costs is considered the most rigorous approach by Her Majesty’s Treasury
when considering the added value of investing public money. And by using the most
up to date costings available, these costs are more reliable than other unit cost data.

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The CSC allows you to compare how you are working now with families under your
local troubled families programme with how you would have worked with such
families (i.e. families with multiple problems) locally before the programme started (or
what is referred to in the technical guidance as business as usual). In this way it
enables you to assess the true costs and savings of the programme locally and, if
enough areas do it, will also allow a national assessment.

The social policy value of the Cost savings Calculator

The Troubled Families Programme is about turning round families with multiple
problems, improving their lives, the lives of their children and reducing the demands
placed on local services in reacting to their problems and saving money which can
be spent elsewhere.

This is being achieved by working in a different way to enable families to change:

      •   working with the whole family in a way which recognises they interact and
          influence each other rather than viewing them as individuals with problems;

      •   using a dedicated worker or dedicated team to get to the underlying problems,
          rather than individual services responding to the presenting problem of each
          family member;

      •   developing a relationship with the family, being persistent and building trust
          with them in order to challenge them to make the changes they needed step
          by step rather than containing and monitoring their problems;

      •   drawing in specialist services in a sequenced way at the right time for the
          family rather than services being available on the basis of meeting thresholds
          and/or availability.

Through working with families this way, underlying problems such as domestic
violence, dysfunctional relationships, mental and physical health problems can be
addressed, families can start to function again and the outward manifestations of
those problems start to improve - children are back in school, there is reduced crime
and anti-social behaviour, parents can start to think about their future, training and
preparation for work.

Monitoring information from the Troubled Families programme so far suggests that
troubled families have on average eight problems per family 1 and so will often be
making demands on multiple services. By changing those families as described
above, there will be fewer demands on services that have been reacting to the
family’s problems – for example, fewer police call outs, less call on anti-social

1
    Family Monitoring Data - forthcoming

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behaviour, police and other criminal justice services, fewer YOT interventions, less
work for Educational Welfare Officers and fewer crisis health interventions.

A reduced need for a service by a family is a real sign of change and of success for
that family. However aggregating these changes in behaviour, and the associated
reduced calls on services, across the cohort of troubled families also provides a very
powerful picture of what working differently with families can achieve, both at a
financial level but also at a social policy level – demonstrating that taking this
approach can drive change in families, across a range of problems and across a
group of families.

For example, this is what one local authority found when they looked at the changes
in behaviour across their first year cohort of troubled families using the CSC:

Indicator                                     % reduction

Common assault (convictions/incidents)        ↓down 84% (from 32 to 5)

Number of children missing at least 5 ↓Down 78% (from 185 to 40)
weeks of school

No of convicted under 18 offenders            ↓Down 88% (from 136 to 17)

Number of DV incidents                        ↓Down 69% (from 36 to 11)

Number of children taken into care            ↑Up 700% (from 0 to 7)

Service Transformation

Public services are dealing with shrinking budgets and rising pressures, and the
CSC can help you demonstrate how working differently with troubled families can
make public money stretch further and be a wise investment.

The table above shows significant changes in the pattern of families’ behaviour
following involvement in their troubled families programme locally. Behaviour which
affects the time, resources and involvement of the police, youth offending services,
educational welfare, children’s social care and health. The table shows clearly that
there have been reductions in most behaviours. There was, however, an overall
increase in the number of children taken into care in this cohort of families. In seven
cases families had children removed as there was little prospect of them being able
to thrive with their birth families. Although this may produce a rise in costs, this
underlines that at its core the programme is about changing families and doing what
is right for children above all.

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Gathering and setting out information in this way helps create a transparent
understanding of the costly reactive nature of our response to these families across
all public services and therefore of the potential benefits of using an effective family
intervention approach instead. This could be used to demonstrate to local partner
agencies the value of getting involved and contributing to the programme.

Realigning towards a family intervention approach has not always been easy – for
most areas, it has represented a real shift in thinking and changes in the way of
working - an investment of resources, the use of different skills, a different way of
looking at and helping families using a whole family approach and a single worker or
team. It has meant a different approach to identifying who qualifies for help, and a
significant shift in sharing information and data within departments and across
services. Importantly, it is shifting the focus of interventions towards outcomes –
changing families not only managing them and reacting to their problems.

The CSC will allow you to demonstrate what these changes in approach have cost
you and what benefits they have brought and in so doing can drive in a very
transparent way further necessary reform.

Why use this cost benefit analysis tool?

The Troubled Families Team has developed this CSC specifically for this programme
and it contains features which make it both a comprehensive and robust CBA tool in
general and the most relevant tool for this programme. In developing it, we have
drawn on the work of New Economy Manchester and we have used their Unit Cost
Database which is a comprehensive and up to date database bringing together all
the fiscal benefits which have been agreed by the Treasury and endorsed by the
chief analysts in each Government Department.

The CSC is online and this enables DCLG to update it regularly as new cost data
becomes available. Updates on changes made to the CSC, including new cost data,
will be made available via a News Feed on the front page of the webpage.

We have specifically identified the indicators most relevant to the Troubled Families
Programme (for example crime types, anti-social behaviour, domestic violence,
education, health, housing, child protection etc.) but the tool also allows you to input
any additional indicators you wish to use. It will also allow you to adjust unit costs, or
background data to meet your own local requirements. It will generate reports, charts
and graphs, based on your results so you can present the information in different
ways.

Unlike some CBAs, the CSC enables you to isolate the money you are spending and
saving by automatically separating the different types of savings made – those to
the tax payer (fiscal savings), savings to the family (economic savings), and savings

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to the wider community (social savings). It also automatically tells you which services
are bearing the costs and which are making the savings, allowing you for example to
consider whether an ‘investment and savings package’ can be agreed locally.

Getting started

This tool has a great deal of potential but we do not under-estimate the challenges
involved in completing it. Obtaining and compiling accurate data across the range of
families’ problems for your cohort of troubled families as well as accurate service
costs will be very hard work in many areas. It should be seen as an evolving process
and a work in progress. So we would encourage you to start with whatever data you
do have available. For example, troubled families payment by results data and
information used to populate the Family Monitoring Data, both of which are valuable
for using in the CSC.

The CSC is designed to make use of actual information you have collected on
families. It is not intended to be used for forecasting demand, for example, or
predicting budget expenditure – which some CBA tools do. In this way you can be
sure that savings are based on actual outcomes achieved by families.

The CSC is a valuable tool for analysing and quantifying the benefits of your service
(as opposed to individual successes), and so should ideally cover all families who
are part of your programme. This comprehensive coverage is considered best
practice for all cost benefit analyses. However at this stage, we know that achieving
this level of coverage will be unlikely. As the benefits of more comprehensive data
become clear, we hope that areas will take a more rigorous approach to its collection
and increase the proportion of families for which data is available. Although there is
no hard and fast rule, you should be aiming for data on a minimum of 25% of your
families in order to undertake a robust fiscal and social policy analysis.

Making the most of the Cost Savings Calculator will be difficult to do but it is
possible and it is worth doing. We do not underestimate the challenges
involved. However, if the time and resources are invested in doing it well it can
make a significant contribution to evaluating the fiscal and social policy
benefits of the programme and help drive service transformation.

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