Introduction

Before starting to gather data and undertake crime analysis it is important to be clear what the purpose of such work will be. District Audit reviews of Crime and Disorder Partnerships 1999/2000 suggest work on costs analysis to:

• Develop methodologies for systematically capturing costs of: crime and disorder both direct/associated costs) (e.g. Hull)

• Preventative measures that may be considered to deal with incidents sic. and relative cost of preventative options for the same type of incident sic)’ (e.g. Stockport)

• Clear resourcing plan to ensure implementation strategy to include: allocation of accrued savings

• Picture of shortfalls in resourcing plus an action plan to address any shortfalls

• Development of financial management framework to ensure probity/accountability as more resources committed to partnership’ (e.g. Oldham)

• Identifying costs of crime/contribution to evaluation strategy/powerful tool for securing resource commitment + strengthening mainstream commitment’ (e.g. Stoke)

Safety in Numbers (Audit Commission 1998: 76) specifically suggests that:

"cost benefit analysis is a useful way of persuading partners and outside investors to invest in prevention. Analysing issues on a smaller scale – focusing the measurement of costs on housing departments, hospitals or schools – can be more useful than broad statements of cost across large geographical areas"

Crime and Disorder Partnerships may most benefit currently by using costs analysis to:

• Analyse overall costs of crime in an area and use those global figures to inform the decision making process during the next round of audit and strategy 2002-2005

• Assist the identification of a business case for partners e.g. Health, Probation and the private sector

• Assist in S.17 mainstreaming work where overall costs of crime can be linked to the work of specific departments

• Assist in the comparison and benchmarking on efficiency and effectiveness required within the Best Value process

The table below outlines the possible uses of cost analysis covering costing inputs, costing crime, cost-effectiveness analysis and cost-benefit analysis. It also gives an indication of which areas of cost analysis a partnership might contemplate undertaking. Definitions of terms are included after the table.

Definition of terms

Community safety as part of mainstream service provision - Community safety can be delivered as part of a mainstream service provided by an organisation such as a local authority. In this case crime or disorder reduction will be only one aspect (and often a subsidiary one) of a service that has a primary goal that is not crime or disorder reduction. Community safety delivered as part of a mainstream service provision can be usefully distinguished from community safety projects for the purposes of cost analysis because although the principles of doing cost analysis in both cases is the same, the practical implications of gathering the relevant information will be markedly different. Costing inputs into community safety where the crime reduction outcome is being delivered as part of a mainstream service will be difficult because of the need to:

• understand which objectives of the service have a crime reduction facet

• understand the mechanisms via which a service has an impact upon community safety

• identify the elements of the service that have a crime reduction impact

• identify the direct costs such as personnel where only a proportion of different personnel’s role is relevant to crime reduction

• identify and disaggregate the indirect costs such as capital costs and office accommodation which may be incurred by centralised purchasing or estates departments rather than the specific department providing the service

Community Safety Project - Community safety can be delivered via a ‘stand-alone’ community safety project. For the purposes of this guidance a project is defined as an undertaking where the main objectives of the project are the delivery of crime or disorder reduction, there is an identifiable ‘ring-fenced’ budget and staff resources are clearly identifiable as belonging to the project.

Inputs - are any additional human, physical and financial resources that are used to undertake a project / initiative. Personnel, training, equipment, premises, transport, voluntary input, levered-in-costs, indirect resources (e.g. the benefit of being in a Health Action Zone or Excellence in Cities area) could all be inputs.

Direct inputs - There is no precise definition of direct costs, but for the purposes of this guidance they will refer to the costs of personnel (plus on costs) and materials used. For instance the direct costs in a ‘locks and bolts’ burglary prevention project might the salaries and on costs of the project co-ordinator, the project administrator and the joiner and electrician upgrading household security, together with the cost of office supplies and the hardware installed to upgrade householder’s security.

Indirect inputs - There is no precise definition of indirect costs, but for the purpose of this guidance they will refer to support costs, accommodation costs, voluntary input, levered-in resources, and indirect resources that accrue from sharing in the benefits or building upon the work of other initiatives such as a HAZ or Excellence in Cities. For a ‘locks and bolts’ burglary prevention project indirect resources could include the use of office accommodation in a local police station, the production of publicity material without charge by a local business, or the use of local volunteers to assist with the installation of security hardware.

Outputs - Outputs are defined narrowly as direct products of process of implementation. They arise only during the implementation period. The outputs of a burglary reduction project might be the number of locks fitted or the number of alarms installed. The outputs of a youth diversion project might be the number of young people using the project or the number of activities run.

Outcomes - Outcomes are the consequences of an intervention. They can arise during & after an intervention. The outcome of a burglary reduction project might be the number of burglaries prevented. The outcome of a youth diversion project might be a reduction in the number of 16 to 18 year olds given convicted of an offence.

Baselines - Cost analysis (particularly if used in evaluation) will generally focus on identifying additional inputs, outputs and outcomes. This means sorting out additional elements from elements that would have occurred anyway. In order to do this it will be necessary to establish baselines, early in the process.

Costs - Costs are the monetary value of inputs.

Average costs - The average cost per output/outcome provides a measure of the overall return to an intervention, which can be used for comparing the cost-effectiveness of different interventions.

Marginal costs - The marginal cost refers to the extra spending required to achieve one extra unit of output or outcome. Only those inputs that are required to achieve that extra outcome are included. Fixed costs (e.g. premises) are excluded, unless they are required to achieve this extra unit of outcome.

Benefits - Benefits are the value of outcomes expressed in monetary terms.

Policy appraisal (forward looking) - Cost analysis can be used to undertake policy appraisal in the form of an options appraisal by looking at the value of likely benefits from implementing alternative policy proposals. These are weighed up against likely costs of implementation in order to be able to distinguish between different proposed initiatives.

Policy evaluation (backward looking) - Cost analysis can be used to identify the size and value of the benefits that have accrued from a particular policy.

Cost-effectiveness analysis - Cost-effectiveness analysis compares alternative cost streams which produce broadly similar outputs or outcomes. They are expressed as the input cost per unit of output or outcome achieved. A measure of cost-effectiveness in a youth diversion project might be the cost per offender attending a literacy programme (cost per output). A measure of cost effectiveness in a burglary reduction project might be the cost per burglary prevented (cost per outcome).

Cost benefit analysis - Cost benefit analysis goes a step further than cost-effectiveness analysis by attaching monetary values to the outcomes of an intervention. The value of the outcomes (benefits) is divided by input costs.

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