Cost Benefit Analysis Guidance and Model

Developing a cost-benefit analysis model of public sector programmes

New Economy research helps agencies to identify the costs and benefits of new ways of working. We have developed and continue to refine a Cost Benefit Analysis (CBA) model that can identify the fiscal, economic, and social value of project outcomes, and specify which public agency sees this benefit.

Agencies are using our model to rethink whether activities previously funded and delivered by one agency can be better funded and delivered by partnerships. Topics upon which the model has been applied include support for troubled families, health and social care provision and redesigns of the criminal justice system.

The methodology has been developed with assistance from the Technical Advisory Group which is a joint group of analysts from Central Government and GM. Their input has ensured that the methodology is robust and takes account of the most up to date research. The methodology is published here and has also now been included as supplementary guidance to the HM Treasury Green Book.

To support the guidance, we have developed an Excel spreadsheet model (384kb) for analysts to use to apply Cost Benefit Analysis to projects and programmes. In addition, a database of more than 600 unit costs can be found here.

We have also produced a discussion paper (355kb) on a key challenge for public service reform – cashability of the predicted savings from transformation programmes.

The analysis has been central to the Whole Place Community Budget programme. By understanding the potential for fiscal savings to individual agencies through new more preventative approaches, partners have got together to see how they could redesign and jointly invest in services. For an overview of the process and how it has been used for Community Budgets please see the attached slides (1052kb)

For more detail on our approach, CBA tools and database, please follow this link to the Local Government Association Knowledge Hub (please note, you will need to register to access the Hub)

Update 27/3/15

We have uploaded a new version of the excel tool. The incorporates updates to the monetisation of outcomes to align with the new version of the unit cost database.

Contact us

For further information on our CBA activities please email one of the team: