Know your costs: An example from the UK
The nongovernmental organization New Economy, in partnership with the UK government, recently released a database of more than 600 cost estimates. This unit cost database—available at the Centre for Social Impact Bonds—covers crime, education and skills, employment and economy, fire, health, housing, and social services. Most are national costs derived from government reports and academic studies. The data will be reviewed and updated on a regular basis as new research and analysis is published.
The unit cost database is part of a toolkit and “knowledge box” that support the development of social impact bonds (SIBs), but its value isn’t limited to SIBs. Toby Eccles of Social Finance listed 10 reasons that people “ought to be just a teeny bit more excited” about this data set, including the following:
- Efficiency. “While most if not all of these [data] have been in the public domain somewhere before, now, instead of scrabbling about checking various sources, people can simply go to one place and look it up.”
- Transparency. “This database…provides an important route to check and challenge government costs and data.”
- Consistency. When studies use the same unit cost data, “it becomes easier to understand the different applications and compare the impact and numbers they are using. Assessment becomes quicker and cleaner.”
- Effectiveness. “Stories are an important element of bringing work to life, but they have to be backed up with numbers and analysis. Unit cost data push more effective measurement and analysis into the core of the discussion. Even if one organisation doesn’t use them, another will, changing the nature of the discussion.”
We encourage agencies and jurisdictions to collect, share, and consistently update data on costs as an important step in building the capacity for cost-benefit analysis. The unit cost database from the United Kingdom provides a good example to state and local jurisdictions in the United States of what information to collect for cost-benefit purposes and how to store and document it.