There is often only limited information on the costs and benefits of crime reduction interventions, which can hamper evidence-based decisions on what to do about crime problems. To help practitioners make more accurate cost benefit assessments of their interventions a new tool has been developed by the Commissioned Partnership Programme for the What Works Centre for Crime Reduction. The Cost Benefit Tool has been developed by Dr Matt Manning, Margarita Vorsina and Gabriel Wong from the University of Australia and Professors Shane Johnson and Nick Tilley (UCL).
The academic team have produced Economic Analysis: A Brief Guide for Crime Prevention Practitioners which provides a summary of some of the issues faced by practitioners when conducting economic analysis, outlines the major forms of economic analysis that can be used, and provides some examples before going on to describe the Cost Benefit Tool. The Tool itself is divided into 2 parts.Part 1 of the Cost Benefit Tool uses traditional costing techniques - such as those employed in the HM Treasury (2003) The Green Book – allowing input of all relevant cost and benefit data into the Tool to calculate total expenditure on one or more interventions/programmes (across all years of the intervention), and/or to compare the average annual expenditure before and after the introduction of the intervention. For example, users can input costs associated with a variety of factors such as:
Part 1 distinguishes costs as direct (e.g. salaries for project staff) or indirect (e.g. administration) and identifies intangible costs (e.g. reduction in productivity due to the extra demands of the new intervention). Users can insert upper and lower cost estimates where only approximate or national costs are available or intangible cost estimates are used. Part 1 allows users to make a comparison of costs prior to the intervention being implemented (i.e. the status quo or costs in absence of the intervention) and after the intervention. In terms of benefits, it will estimate the size of savings made by avoiding or preventing crime. Costs associated with crimes are based upon Crime against individuals and households. Home Office Online Report 30/05 (2005) but other local data can be used.Ultimately Part 1 calculates the cost-effectiveness ratio, and the cost-benefit ratio.Part 2 uses a combination of traditional methods for calculating the costs of an intervention and other techniques that allow cost estimates to be made in the absence of reliable accounting data. In Part 2, the average annual costs of an earlier or similar intervention can be compared to those of a new intervention. Part 2 allows the user to estimate how much it will cost to implement an intervention in a different context, such as a new location or more widely (upscaling from a pilot project to a whole treatment area). This analysis asks the user to compare the differences between the two areas in a series of apparently simple questions, then uses a technique called Analytic Hierarchy Process (AHP) to estimate the new costs.
Further information can be found in The Green Book, the Treasury's guide to economic evaluation, or (the easier to read) Supporting public service transformation: cost benefit analysis guidance for local partnerships.