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Calculating the costs and benefits of community projects

Summary

For almost 50 years, UK governments have used area-based initiatives to help reduce problems in disadvantaged urban areas. Accurately judging the success of these initiatives however has often proved a challenge. A research team from the University's Centre for Regional Economic and Social Research (CRESR) have developed innovative methodologies to calculate the benefits of these initiatives by monetising them. As a result they have been able to better explain the scale and nature of longer-term outcomes associated with these schemes and help guide government regeneration policy.

Our research

From the 1980s to 2013 the University’s research in this area was led by Professor Paul Lawless. In this time, he received a number of grants to continue this work. However, of all of these grants, the award of the national evaluation of the New Deal for Communities (NDC) Programme (2001-2010) proved especially valuable in providing time and resources through which to develop thinking.

Previous research assessing the costs and benefits of these programmes had never been especially robust because of a lack of long-term evidence and the often-changing boundaries of the geographical areas studied. By monetising (ie calculating a pounds sterling equivalent for) all benefits arising from regeneration, Lawless and his colleagues were able to track long-term change more effectively.

For the New Deal evaluation, they provided such data on 39 deprived English areas across outcomes including environmental perceptions, community attitudes, crime, education and jobs. Collecting individual-level data over time meant it was possible to monetise transitions from, for example, being ‘not satisfied’ to ‘satisfied' with the area and its environment. This helped the team to understand the scale and nature of change associated with regeneration schemes.

One of the key objectives of the NDC evaluation was for the first time to establish, and to explain, longer term change across a range of outcomes. This research concluded that area-level change across these 39 areas proved relatively limited. Individuals engaged with the regeneration projects saw much more positive change than those not engaged. Relatively few residents of these regeneration areas directly benefited from the funded projects.

The NDC Evaluation made important methodological strides in valuing the benefits of the programme in a way that had never been done before. The findings were used by the Department to analyse and prioritise future spend. The methodological learning gleaned has since informed analysis relating to similar Government programmes where monetising hard-to-value benefits was crucial
Key evaluation officer in 2010, Communities and Local Government (CLG)

The impact

The main beneficiaries of this research have been central government regeneration policy makers and advisers and also lobbying organisations and think tanks.

The methodology for monetising costs and benefits was first published in the final suite of the NDC evaluation reports, and then subsequently incorporated into a Communities and Local Government's (CLG) economic paper on regeneration. The key evaluation officer for CLG at the time indicated that the findings had been used by their department to analyse and prioritise future spending. They had also informed other similar government projects. The potential use of this methodology was also referred to in an HM Treasury and Department of Work and Pensions 2011 Report.

Insights gained through using this methodology have helped government to better understand the nature of change associated with regeneration schemes. For example, the government's 2008 'Framework for Regeneration' report proposed a more economically orientated approach to deprived areas in future, partly because CRESR’s New Deal for Communities evaluation had shown positive change did not extend to growth in jobs. Lawless was also recruited to two of the government's expert panels in Housing and Communities and in Neighbourhoods, Cities and Regions. His input on the limited scale of people-based change associated with area-regeneration programmes was included in the final reports of both reviews.

The results of the research have influenced the approach of lobbying organisations and think tanks too. The Royal Society of Arts (RSA) used the findings to argue for community engagement being seen in terms of connectivity, rather than taking place within defined 'spaces'. Similarly, research into community outcomes from local initiatives informed debate amongst political think-tanks both supportive and critical of the broad concept of 'Big Society'.

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