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MAKING THE CASE



Picture CC: Some rights reserved byDarnok
“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 case
4.   Existing evidence
5.   Practical steps
6.   Using results
7.   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
About
• Registered Charity (nr. 1130568)
• Focus: Public and stakeholder engagement
• Works with: Central & local government.
  Health organisations, NGOs and International
  Organisations
• www.involve.org.uk
"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         Business case
• Academic         • Practical
• Complete         • Incomplete
• Time consuming   • As much time as you have
• Truth            • 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




cture CC: Some rights reserved By: clarita
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            Measured by         Non-monetary value
value
Access to new       Database of funding Survey results
funding and         accessed before and
volunteering time   after engagement.
                    Time sheets for
                    volunteers
Benefits - Increase trust
Monetary value     Measured by          Non-monetary value
Reduced spend on   Staff work           Reported trust
complaints         diaries/time sheets, levels, NI4 scores,
                   complaints listings  about people feeling
                                        able to influence
                                        decisions
Benefits - Quality of services
Monetary value          Measured by          Non-monetary value
Better service          Staff work           Service user
outcomes (health,       diaries/time sheets, satisfaction
crime etc), less time   neighbourhood level
spent on                service statistics,
administration and      health and crime
duplicated work ,       statistics
less complaints
Benefits - Take difficult decisions
Monetary value        Measured by          Non-monetary value
Reduced conflict      Legal costs, staff   Number of negative
and reduced spend     work diaries/time    articles in press,
on legal challenges   sheets, complaints   survey results
                      listings
Benefits –good community
  relations
Monetary value       Measured by        Non-monetary value
Reduced vandalism    Crime statistics   Survey results
and crime in local
area
Replacement costs
New resource                       Replacement cost
Increased 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      The cost of achieving a similar level
policies and services              of awareness through campaigns or
                                   PR
Tools




Picture CC: Some rights reserved
By: ardelfin
Logframe
Goals/        Possible      Monetary      How to get    Important
purpose       indicators    measures      data          assumption
What are you How will       Can you       How can       What are
trying to do? you know if   estimate a    you gather    the
              you are       money         this          assumption
              successful?   value on      information   s in
                            any of the    ?             choosing
                            indicators?                 this
                                                        measure of
                                                        success?
Logframe
Goals/    Possible     Monetary   How to get   Important
purpose   indicators   measures   data         assumption
Logframe -example
Goals/           Possible     Monetary      How to get    Important
purpose          indicators   measures      data          assumption
We want to       If we are    The time-     Record        We are
increase the     successful   spend of      number of     assuming
responsivene     we should    complaints    complaints    that time
ss of services   see a        staff has a   per month     sheets are
to users         change in    monetary      around this   accurately
following        the number   value and     service and   filled in.
public           or type of   can be        assess the    This may
consultation     complaints   quantified    average       need to be
events.          about the                  length of a   checked.
                 service.                   complaint.
                         .
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       Benefits of engagement
Staff cost: £50,000       Legal Costs saved: £75,000
Displays and PR: £8,000
Admin: £5,000
Postage: £2,000
Travel: £1,170
Press briefings: £1,000
Total: £67,170            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




Picture CC: Some rights reserved By:
doctor_bob
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
example
Benefits to council         Benefits to clients
• 488 tonnes of waste       • 4000+ low-income
  diverted from landfill,     households received goods
  saving approximately        –estimated supplying same
  £20,000 in landfill tax     families with second-hand
  payments.                   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?pa
  geId=17455595
“It is better to be roughly right than precisely
wrong”

                          John Maynard Keynes
involve
Royal London House
22-25 Finsbury Square
London
EC2A 1DX
t: 0 20 7920 6470
e: edward@involve.org.uk
twitter: ed_andersson

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Making the case webinar

  • 1. MAKING THE CASE Picture CC: Some rights reserved byDarnok
  • 2. “In our time, the curse is monetary illiteracy, just as inability to read plain print was the curse of earlier centuries.” Ezra Pound
  • 3. What we will cover 1. About Creative Councils 2. Why a business case? 3. Tools for making the case 4. Existing evidence 5. Practical steps 6. Using results 7. Q&A
  • 4.
  • 5. 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
  • 6. 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
  • 7. About • Registered Charity (nr. 1130568) • Focus: Public and stakeholder engagement • Works with: Central & local government. Health organisations, NGOs and International Organisations • www.involve.org.uk
  • 8.
  • 9.
  • 10. "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
  • 11. Making the case • It’s a good thing • It’s a democratic right • Improves wellbeing • Inclusion of marginalised groups • Empowerment of marginalised groups
  • 12. 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
  • 13. “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
  • 14. 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
  • 15. Economic Evaluation • Cost-benefit analysis • Cost-effectiveness analysis • Cost-minimisation analysis • Cost-consequences analysis • Social Return On Investment
  • 16. Evaluation vs Business case Evaluation Business case • Academic • Practical • Complete • Incomplete • Time consuming • As much time as you have • Truth • Good enough
  • 17. 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).
  • 18. 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.
  • 19. In short... Understanding can be greatly enhanced but evidence will always be incomplete.
  • 21. “Nowadays people know the price of everything and the value of nothing.” Oscar Wilde
  • 22. Costs and Benefits of Engagement cture CC: Some rights reserved By: clarita
  • 23. Costs • Programme costs • Non-programme costs • Participant costs
  • 24. Benefits • Improved governance • Greater Social Cohesion • Quality of Services/Projects • Capacity Building/Learning
  • 25. 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
  • 26. Non-monetary benefits • Active citizenship • Stronger communities • New organisations and structures • Behaviour change • Trust and social capital
  • 27. Non-monetary benefits • Revealed preference • Stated preference – Willingness to pay – Willingness to accept • Benefits transfer
  • 28. 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
  • 29. Risks • Financial risks • Performance risks • Reputational risks • Opportunity risks
  • 30. Benefits -resilient community networks Monetary Measured by Non-monetary value value Access to new Database of funding Survey results funding and accessed before and volunteering time after engagement. Time sheets for volunteers
  • 31. Benefits - Increase trust Monetary value Measured by Non-monetary value Reduced spend on Staff work Reported trust complaints diaries/time sheets, levels, NI4 scores, complaints listings about people feeling able to influence decisions
  • 32. Benefits - Quality of services Monetary value Measured by Non-monetary value Better service Staff work Service user outcomes (health, diaries/time sheets, satisfaction crime etc), less time neighbourhood level spent on service statistics, administration and health and crime duplicated work , statistics less complaints
  • 33. Benefits - Take difficult decisions Monetary value Measured by Non-monetary value Reduced conflict Legal costs, staff Number of negative and reduced spend work diaries/time articles in press, on legal challenges sheets, complaints survey results listings
  • 34. Benefits –good community relations Monetary value Measured by Non-monetary value Reduced vandalism Crime statistics Survey results and crime in local area
  • 35. Replacement costs New resource Replacement cost Increased 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 The cost of achieving a similar level policies and services of awareness through campaigns or PR
  • 36. Tools Picture CC: Some rights reserved By: ardelfin
  • 37. Logframe Goals/ Possible Monetary How to get Important purpose indicators measures data assumption What are you How will Can you How can What are trying to do? you know if estimate a you gather the you are money this assumption successful? value on information s in any of the ? choosing indicators? this measure of success?
  • 38. Logframe Goals/ Possible Monetary How to get Important purpose indicators measures data assumption
  • 39. Logframe -example Goals/ Possible Monetary How to get Important purpose indicators measures data assumption We want to If we are The time- Record We are increase the successful spend of number of assuming responsivene we should complaints complaints that time ss of services see a staff has a per month sheets are to users change in monetary around this accurately following the number value and service and filled in. public or type of can be assess the This may consultation complaints quantified average need to be events. about the length of a checked. service. complaint. .
  • 40. Comparators • Do nothing • Status Quo • Alternative engagement methods • Alternative means of achieving the benefits
  • 41. 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.
  • 42. 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.
  • 43. Humber: Costs and benefits Costs of engagement Benefits of engagement Staff cost: £50,000 Legal Costs saved: £75,000 Displays and PR: £8,000 Admin: £5,000 Postage: £2,000 Travel: £1,170 Press briefings: £1,000 Total: £67,170 Total: £75,000 Value of engagement: £7,830
  • 44. “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
  • 45. Using the Involve Toolkit
  • 46. 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
  • 47. 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
  • 48. 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
  • 49. Stage 2 –Define focus and purpose • Decide the focus for the business case • Clarify the intended purpose and outcomes • Consider possible comparator areas/ projects
  • 50. 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
  • 51. 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
  • 52. 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
  • 53. Stage 6 -Present the business case • Select appropriate presentation format • Present the business case • Adapt to feedback
  • 54. 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.
  • 55. Problems and solutions Picture CC: Some rights reserved By: doctor_bob
  • 56. 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
  • 57. Doncaster furniture recycling example Benefits to council Benefits to clients • 488 tonnes of waste • 4000+ low-income diverted from landfill, households received goods saving approximately –estimated supplying same £20,000 in landfill tax families with second-hand payments. goods would have cost £140,000 with existing market prices.
  • 58. 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
  • 59. 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?pa geId=17455595
  • 60. “It is better to be roughly right than precisely wrong” John Maynard Keynes
  • 61. involve Royal London House 22-25 Finsbury Square London EC2A 1DX t: 0 20 7920 6470 e: edward@involve.org.uk twitter: ed_andersson