BHP Charity Conference 2013

BHP Charity Conference 2013
5 November 2013

© Barber Harrison & Platt 2013. All rights reserved.

Welcome & introduction
Jane Marshall, Head of Charities & Not for Profit

Barber Harrison & Platt


Our chairman
Paul McCay, Chief Executive,
The Wilf Ward Family Trust


The Wilf Ward Family Trust
•

Est. 1986

•

Current income of £19m p.a

•

1100 staff

•

80 schemes across
Yorkshire, Middlesbrough, Humbe
rside

•

Providing social care, respite
care, holiday lets and domiciliary
care

SORP Exposure draft – July 2013

Major changes from SORP 2005

Jane Marshall– Head of Charities and Not for Profit


The New Financial Reporting Framework
Options

FRSSE

FRS102



Gross income < £6.5m



Total assets not exceeding £3.26m



Average number of employees not exceeding 50



Unincorporated charities apply the same limits

SORP has been developed to support both
standards


Modular in format



Identifies recommendations that apply:


to all charities



only to those charities preparing accounts under FRSSE



only to those charities preparing accounts under FRS102

Major changes


Trustees’ Annual Report



Statement of Financial Activities (SoFA)



Balance sheet



Statement of cash flows



Accounting policies and definitions



Clear distinction


what all charities must report



matters which are required of larger charities only



additional information which is good practice



Information relevant to the charity’s stakeholders



Achievements in relation to objectives – all charities



Impact of a charity’s activities – good practice



Larger charity – one that needs an audit



Going concern




Reserves policy




Where there is uncertainty – explain the nature of this

Disclosure reasons for not having one

Risk management statement is expanded – larger charities






Explanation of major risks faced
How these risks are managed

Names of trustees



Number of headings reduced
INCOME

SORP 2005

ED

Incoming resources

Income and endowments

Voluntary income

Donations

Incoming resources from charitable
activities

Income earned from charitable
activities

Activities for generating funds

Earned from other activities

Investment income

Investment and other income

EXPENDITURE
SORP 2005
Resources expended
Costs of generating voluntary funds
Fundraising trading: cost of goods sold
and other costs
Investment management costs
Charitable activities

ED
Expenditure
Cost of raising funds

Expenditure on charitable activities

Governance costs
Other resources expended

Other expenditure

Net gains/losses on investments


To comply with FRS102
SORP 2005

ED
Net incoming resources/(resources
expended) before investment
gains/(losses)
Net gains/(losses) on investments

expended)

expended)

Transfers between funds

Transfers between funds

Other recognised gains/(losses)
 Gains/(losses) on investments
 Gains/(losses) on valuation of fixed
assets
 Actuarial gains/(losses) on defined
benefit pension schemes

Other recognised gains/(losses)



Gains/(losses) on valuation of fixed
assets
Actuarial gains/(losses) on defined
benefit pension schemes

Other gains/(losses)
Net movement in funds

Net movement in funds

Other primary statements


Balance sheet
no substantive changes





Statement of cash flows


must for charities applying FRS102



those under FRSSE can choose



3 mandatory headings




investing activities





operating activities

financing activities

Reconciles opening and closing cash on the face



In preparing accounts the charity must




apply the recommendations of the SORP





apply FRSSE or FRS102

select accounting policies that comply with FRSSE, FRS102 and SORP

FRSSE


must retain existing accounting policies



if undertaking a new transaction


adopt treatment in FRS102 and SORP



FRS102 – policies consistent with FRS102



SORP supplements the relevant accounting standard


SORP 2005
Listed the most common accounting
policies

ED
Consideration of the selection of
accounting policies

Accounting policies considered in the
modules
No wholesale change

Significant changes regarding particular
charities

Fund accounting


Net amount of transfers between funds must net to £nil



Cannot be used for:


acquisitions



transfers of trusts from the charity to another



Instead recognise a gain = net assets acquired; or



Adopt merger accounting where relevant



Reference to loans between funds is dropped

Going concern


Disclose material uncertainties that cast doubt



If no material uncertainties should also be stated



Makes it clear it is the trustees’ responsibility



Trustees should take into account at least 12 months from date of
approval

Income recognition


Income should be recognised


entitlement



measurement



probable – new concept



Contingent assets recognised as income when virtually certain



Income receivable discounted for time value of money


settlement more than 12 months



effect is material



applies to all charities

Income from donated goods, facilities and services
including volunteers


Receipt of donated goods for sale or distribution


recognised when received at fair value



if impractical recognise when sold or distributed



major change from SORP 2005


impracticality of measurement anticipated



therefore always recognise income at point of sale or distribution

Recognition of expenditure


Settlement delayed for > 12 months


liability discounted



if material



applies to all charities



likely to affect charities recognising multi-year grants

Mixed use investment properties


In the balance analyse






part used operationally
part held for investment purposes

If undue cost or effort




analyse as tangible fixed assets

SORP 2005 classified on main use

Financial instruments


Basic financial assets and liabilities



Recognise at amount receivable or payable


includes transaction costs if material



if not material - expense

More complex financial instruments


Concessionary loans



Advance fee schemes



Buying and selling foreign currency and derivatives



Refer to FRS 102

Post employment benefits


Defined benefit multi-employer plan


cannot identify your pot



account for as a defined contribution plan




i.e. just contributions paid

Change


recognise liability to make payments to fund any deficit



if the charity has entered into an agreement

Total return (investments)


Applies to charities


invest permanently endowed funds on a total return basis



addresses issues in more detail than SORP 2005



table 16 module 20 shows the layout

Accounting for social investments


Programme related investments (SORP 2005)



Mixed motive investments


generate an investment return



to further charitable purposes

Measurement
FRSSE
Loan

FRS102

Cost less impairment

Or amortised cost

Shares


Fair value

Or

Or

Fair value


Accounting for branches
Excluded from the ED definition of branches are


Charities that are independently governed by a separate board of
trustees



Groups of people who raise funds for a charity or number of different
charities



Special interest groups – affiliated – but do not undertake charitable
or fundraising activities



Excludes incorporated entities administered


by or on behalf of reporting charity



funds held for purposes of the charity

Charity mergers
Detailed guidance


Criteria that must be met



How to merger account



Circumstances where changes to form e.g. incorporation can allow
merger accounting

Accounting for joint ventures


Equity accounting in consolidated accounts






SoFA – one line – share of income or expenditure
Balance sheet – share of net assets

SORP 2005 required gross equity method


makes a nonsense of the SOFA

Definition of related parties


Alignment with




Charities Act 2011 section 118





FRS 102 section 33

Charities and Trustee Investment (Scotland) Act 2005

Detailed guidance in the ED glossary

So what is next


Consultation ended yesterday



SORP committee will consider



Final SORP will be issued next year



Effective accounting periods commencing 1 January 2015



Not that far away

Thank you
This presentation and any accompanying notes are provided as information only
and should not be relied upon as advice, or treated as such. No liability is
accepted for any errors of fact or opinion they may contain. Professional advice
should always be sought before making any decisions.
Jane Marshall
Head of Charities and Not for Profit
jane.marshall@bhp.co.uk
0114 266 7171

Charity Finance Group
Katherine Smithson
Policy and public affairs officer
Charity SORP Exposure Draft:
Feedback on the consultation process

Charity Finance Group (CFG)
•

•
•

Membership organisation with over 2200
members, all responsible for financial
management in charities
‘Inspiring financial leadership’
Promoting best practice and ensuring a
proportionate and effective regulatory
environment

Getting charity views on the
SORP consultation
•
•
•

•
•

SORP briefing events
Printed copy of the SORP for all CFG
member charities
CFG briefing paper with questions for
charities on what they want reflected in
the SORP
Consultation events across the country
with the Charity Commission
CFG Technical Accounting Forum

Technical Accounting Forum
•

•
•

•

A group of CFG members and auditors
from professional firms
Chaired by CFG member Rui
Domingues, Friends of the Elderly
During the SORP consultation there
was a huge increase in numbers of
CFG members engaging in the forum
The forum met twice and helped to
develop our response by email

What were the things we couldn’t
change?
•

New UK GAAP – FRS 102

•

Treatment of repayment agreements for multiemployer defined benefit pension schemes
Income recognition is based on ‘probable’ not ‘almost
certain’
Income will include unrealised investment gains
Staff remuneration disclosures
Valuing volunteer time and donated goods

•
•
•
•

•

There is a charity concession on the latter point

What were the hot topics and key
issues for charities?

FRSSE: To include or not to
include?
Pros:
•
Vast majority of the sector is technically able to follow the FRSSE
•
Keeping it will enable many charities to keep their current accounting
policies
•
Easier for smaller charities to adapt to new SORP
•
No cash flow statements required
Cons:
•
Based on old UK GAAP and fast becoming outdated
•
Has not been consulted on as a whole standard – little assurance
that it is fit for purpose for charities
•
Developments elsewhere
•

BIS consultation following EU Directive

•

Likely to be FRC consultation on FRSSE in near future

FRSSE days are numbered…

But; CFG has proposed that the option to
apply the FRSSE is maintained in the new
SORP, why?
•

Dis-applying the FRSSE would impact
most on the smallest charities

Income recognition
Now based on ‘probability’, ‘entitlement’, and
‘measurement’
•
•

Previously based on ‘virtual certainty’
Not too much difference expected from this
change

Treatment of legacy income has always been
inconsistent across the sector
We asked charities…
•

Do we base these criteria on legal events –
such as ‘probate’, ‘notification by the executor’?

•

Do we leave it to judgement of individual
charities based on principled approach?

They said…
All sorts of different things!

Grants
•

Should charities be disclosing a list of all their grants in
the notes to the accounts?

What charities told us…
• This will probably take up a lot of space!
• Detract from other activities
• Against ‘cutting clutter’?
• Already make available elsewhere
•

CFG has taken this view in our response as long as the
information is made available elsewhere

Salaries
•
•
•

Charities already disclose number of individuals in salary bands
increasing by £10,000 above £60,000
FRS 102 introduces concept of ‘key management personnel’ and asks
for more information on the salaries of these individuals
SORP ED proposed that charities disclose the salary and job title of top
paid employee

Drive to increase transparency
•

But, fairly arbitrary information

CFG has taken the view that the current treatment is actually more useful to
the user of the accounts and should suffice but could recommend:
•

Disclosure of remuneration policy

•

More detailed information on salaries if it supports user to understand staff costs

What we said…
•

Charities want to keep the columnar format

•

Costs of managing investments should be
separated when material

•

Remove words like ‘cost’

Other areas covered
•
•
•
•
•

Treatment of grants – matching and
performance based approaches
Social investments – How do we treat
Mixed Motive Investments?
Groups and branches
Presentation
Performance reporting – Keep it simple!

Contact details:
Katherine.smithson@cfg.org.uk
0207 250 8347

Questions


VAT update
Simon Buchan – Head of VAT Services


Contents


Investment management fees



Cultural exemption



Charity annexes



Listed places of worship grant scheme



Thomas Fuchs



The future

Facts and issues


Recovery of VAT on costs of managing endowment fund



Whether the operation of the fund was an economic activity



Income from fund used to support activities of the University
generally



Whether cost of managing the fund was overhead expenditure?

Outcome


Win for the university



Costs regarded as overheads



VAT recovery according to partial exemption position

Is this the final position?


Probably not



TLLC Ltd – Travel Lodge Tribunal decision has muddied the waters



HMRC may appeal



Watch this space

What now?


Review how VAT treatment on investment management costs and
submit claims to HMRC if necessary for the last four years



If HMRC appeal – claims will not be paid but your position will be
protected

Cultural exemption
HMRC have lost two cases recently in the First Tier Tax Tribunal
British Film Industry


The issue was whether the cinema is cultural?

Wildlife and wetlands Trust


The issue was whether sites operated by the trust were zoo’s?

Implications


Cultural exemption may need to be amended?



Potential VAT refund opportunities for bodies not currently within the
exemption

Charity annexes – Chelmsford College Case
The issues
 Could construction of annexe be zero-rated?
Facts
 Annexe constructed
 Relevant charitable purpose
 Building contained some of its own facilities
 Not capable of independent operation because


Shared admin services with main college building



Did not have own heating facility

Implications
 Has created more uncertainty
 Appears to raise bar to obtain zero-rating
 Appears to contradict HMRC guidance
 An appeal likely?

Listed Places of Worship Grant Scheme



Originally set up to provide grants to religious organisations


to compensate them for VAT on repairs and maintenance works

2012 changes


From 1 October 2012 the LPWGS was extended to include




alteration works to listed places of worship
increased funds available to compensate for the withdrawal of VAT
zero-rating on alterations to listed buildings

 Further changes to LPWGS now allow claims to be made for



works to pipe organs, turret clocks, bells and bell ropes
professional fees eg architects incurred in relation to eligible building
works

Provided the works are supplied from 1 October 2013 onwards
 Religious organisations and charities




whose main purpose is to conserve, repair and maintain redundant
churches
may also claim under LPWGS from 1 October 2013

 Changes were announced to simplify the claims process
For full details visit www.lpwscheme.org.uk

Thomas Fuchs
Facts
 Cost - €38,500
 VAT - €6,500
 No storage capacity
 Electricity sold – 11,000 kWh
 Electricity purchased – 44,500 kWh

 Sale price = purchase price - €0.18

Thomas Fuchs
Art 4.1, 6th Directive
 “The exploitation of tangible or intangible property for the
purposes of obtaining income therefrom on a continuing basis.”
Outcome
 “Income” obtained because electricity sold to network for
consideration
 “Continuing basis” because contract with network was for “an
indefinite duration”


But


economic reality?



consequences for UK cases on business?



wider relevance for input tax recovery (ie need for profit)?

Implications for the charity sector
 Taxable activity – counts towards VAT threshold
 Reinforces HMRC’s views on business activities
other
 Trading activity for tax purposes
 Consider trading subsidiary

The future
EU VAT developments
 EU Commission is looking at VAT treatment of public bodies
including charities
 Consultation released on 14 October 2013
 4 options being considered


full taxation option



refund system



abolition of Article 13



an option to tax

The future
UK VAT developments
 Increased VAT recovery for search and rescue charities?
 Fair playing field review




recommended that VAT recovery on the non business activity of
charitable providers of NHS Services should be on the same basis as
the NHS
any change unlikely to be in the 2014 budget

The future
Submission of VAT returns
 Must be submitted electronically from 1 April 2010


very limited exclusions – insolvency, religious beliefs

 First Tier Tax Tribunal recently ruled this potentially discriminates
against certain sections of society including


disabled



the elderly



residents in rural areas

 No response from HMRC yet

Tax update
Rachelle Rowbottom – Senior Tax Manager


Tax update


Gift Aid Small Donations Scheme



Charities Online



Retail Gift Aid



Digital Giving



Payroll Giving



Social investment tax relief



Employment allowance



Business rates



Other developments

Gift Aid Small Donation Scheme (GASDS) – the
basics


Top-up payments



Small donations - £20 or less



From 6 April 2013



eg street collections



No declarations



Limit - £5k donations per tax year – receipt of £1,250



Not a tax relief



Charities Online



Two years from end of tax year to claim

GASDS – more detail
 Cash not cheque
 Banked
 Eligibility conditions
 Special rules for mergers/changes to legal form
 Gift Aid claims 1:10
 Connected charities – share the £5k

GASDS – community buildings
 Charitable activities in community buildings
 Possibility of additional £5k per community building
 Similar allowance for different structures
 At least 10 beneficiaries
 At least 6 occasions in year
 Participation/Interaction
 Eg religious service, support group

 Not counselling on one-one basis
 Subject to matching rule
 Detailed guidance/examples published by HMRC
 Opportunity

Charities Online


Launched 22 April 2013



Compulsory from 1 October



Replaced the R68i form



Three ways to make claims
1.
2.

Online form and spread sheet

3.



New form ChR1

In-house or third party software

Act now


Decide which option is best for you



Need to register for online options



Need to order ChR1’s

Retail Gift Aid


System has been reviewed



Simplification



Effective from 6 April 2013



Existing method can be used



New methods – Method A and Method B optional



Standard letters updated



Rationale for commission charges

Retail Gift Aid


Where donor agrees



Providing total sales proceeds:


Less than £100 where charity operates shop; or



Less than £1,000 where trading subsidiary operates shop



If exceed limits, letter needed to confirm excess



Donor can request for tax relief purposes

Digital giving
 Consultation closed on 20 September 2013
 Increase take up on digital donations eg online, text message
 Concern that due to technological developments, HMRC always
catching up
 Single declaration through same channel
 Universal Gift Aid Database
 Wording of Gift Aid declarations
 Possibly staged implementation
 Finance Bill 2014 and 2015

Payroll giving
 Take up been low – 2% of employers, 3% of employees
 Consultation responses published in September
 To reduce processing time – 60 days to 35 days
 PGA’s to remain charitable only
 Terms of service level agreements
 Online resource at gov.uk

Social investment tax relief
 Announced budget 2013
 Consultation – now closed
 Income Tax relief for investment into social enterprises
(charities/CIC’s/CBS’s) by individuals
 Similar to EIS relief
 Rate of relief to be announced by Chancellor in Budget 2014
 New way of raising funds
 £150k in any 3 year period per social enterprise
 At a cost to Gift Aid donations?
 Draft legislation December

Employment allowance
 Bill introduced to Parliament
 April 2014
 £2,000 tax cut
 Reduction to employer NIC bill
 Delivered through payroll software and RTI
 To be claimed
 Yes/No indicator

Business rates
 Funding changed
 Responsibility being shared between central government and local
authorities
 Taking harder line
 Mixed use properties are an issue
 Eg used by charity and trading subsidiary
 Mandatory relief at risk

Other developments
Gift Aid – benefit limits
 HMRC has agreed to look at them
 CTG are establishing a working group – eg’s

Tainted Charity Donations
 Updated guidance published by HMRC
 Under continuous review
 Where donors enter into arrangements to obtain a financial
advantage

Conclusion
 Progress on recent announcements
 Watch this space
 Charities online – make sure in hand
 GASDS – review rules and claim what you can

Thank you
This presentation and any accompanying notes are provided as information only
and should not be relied upon as advice, or treated as such. No liability is
accepted for any errors of fact or opinion they may contain. Professional advice
should always be sought before making any decisions.
Rachelle Rowbottom
Senior Tax Manager
rachelle.rowbottom@bhp.co.uk
0114 266 7171

Breakout sessions
Option 1 - An update of the cost sharing exemption
Box room 3, third floor
Option 2 - Auto-enrolment – are you on the journey?
Box room 2, third floor
Option 3 - Trustee responsibilities and decision making
Remain in the main conference room


Legal Structures for
Collaborative Working
Malcolm Lynch, Partner
Charities and Social Economy Team
malcolm.lynch@wrigleys.co.uk
www.wrigleys.co.uk
Tel: 0113 244 6100

Introduction
Spectrum of collaboration

Structure points to consider
Key issues

Collaborative structures
Pros and Cons

Next Steps

Spectrum of Collaboration
Flexible

Volunteer

Agency

Sub Contractors
Joint Venture
Partnership

Employment

Restricted/Controlling

Corporate

Less Control

An Overview – 3 principal forms

Consortium (Lead Partner)
Principal (Prime) Contractor
New Legal Structure
implications
advantages
disadvantages

Collaborative Working –
Consortium – Assume charitable
trading
The ABC Consortium

A Co

B Co

C Co
Lead
Partner

Collaborative Working Consortium
A brand separate from its components
Bind with a Memorandum of
Understanding
Lead partner for bid submission
Other partners agree to work with lead
partner
Other partners pay contribution from
successful bid to lead partners

Contracts with Procurer
Procurer

contract

contract

A Co

C Co
On behalf
of ABC
Consortium

contract

B Co

Responsive, but success will depend
upon joint planning
Retain company independence, but
contractual commitments do exist
A first step
Problem if bids are not successful, is
lead party’s bidding costs covered?

Collaborative Working Consortium
Procurer knows several parties in
consortium
Each party has specified role set out in
bid to Procurer
Works well if all members pull their
weight
Procurer expects all will deliver if one
fails

Procurer
contract

Lead Partner/Principal (Prime)
Contractor
contract

Contractor

contract

Contractor

contract

Contractor

Lead Partner/Principal (Prime) Contractor
No formalities, but a written agreement
is recommended
Leadership or domination?
Retain independence, but contractual
commitments do exist
Risk apportionment and liability
(How much of main contact is
contractor responsible for)

Prime Contractor - Contractor
Costs and reward apportionment

Can Prime pay you in advance?
Is fee for contract too little?
Does being a Prime or Contractor
damage reputation?

New Legal Structure
Procurer
contract

New Legal
Structure
membership

Charity

Charity

Charity

New Legal Structure
Formal
Choice of structure
Allows flexibility around
independence, but contractual
commitments do exist
Risk apportionment & liability
Risks of reverse takeover of members?

Legal Structures
Which legal form?
Risk – unincorporated -v- incorporated
Finance
Grants
Trading
Share capital
Loans

Profit/surplus
Voting/democracy

Charitable or trading activity?
Assumptions to date charitable

If non-charitable trading activity then
consortium member is trading company

Non-Charitable Trading Activity
LLP Structure
Trading
Trading
company
company

Charity
A Co

Trading
company

Charity
B Co

Trading
company

Charity
C Co

Legal Structures
Trusts/Unincorporated Associations X
Partnerships X
Industrial & Provident Societies ?
Companies 
Community Interest Companies ?
Limited Liability Partnerships 
Charitable Incorporated Organisations

Legal Structures
Partnership Act 1890
Business in common with a view to
profit
No formalities
Partnership Agreement
No separate legal personality
No limited liability
Flexibility

Legal Structures
Companies Act 2006
Guarantee or Share & CIC models
Memorandum and Articles of
Association
Shareholders Agreement
Separate legal personality
Limited liability
Flexibility

Legal Structures
Limited Liability Partnerships Act 2000
Notice of Incorporation
Members Agreement
Separate legal personality
Limited liability
Flexibility
Transparent tax treatment
Is a trading activity created in charity?

Why Collaborate?
Pros and cons
Forms of collaboration

The spectrum of collaboration
Flexibility and freedom to contract
Rigid structures and legislative
compliance
degrees of control

Advantages
Sharing
information
resources
Savings
economies of scale
Spreading risk
Strength
reputation

Disadvantages
Loss of autonomy
Costs
time and resources
Reputation
supporters
staff
Aspirations
mission drift
objectives

Fundamental relationship requirements
Are you ready?
your values, aims & objectives
Are your partners ready?
their values, aims & objectives
Risk Management
financial due diligence
management systems
Insurance

Fundamental relationship requirements
Legal Issues
legal due diligence
objects
Purpose/area of benefit
powers
authority
duty of care/conflicts of interest
Usual Contract Terms

Fundamental contract requirements
Binding agreement
Fit for purpose
Clear
Capable of addressing contingent
circumstances

Some contract principles
The requirement for written terms
The impact of implied terms
Business ethics
Custom and practice
Statutory terms
Default provisions
Partnership Act 1890
Limited Liability Partnership Act
2000
Companies Act 2006

What do you expect to see?
Usual terms

Particular contractual issues
Confidentiality
Data Protection
Freedom of Information
Price Fixing
Competition
Intellectual Property

Resources
Charity Commission
Collaborative Working and Mergers
www.charitycommission.gov.uk/public
ations/cc34.asp

NCVO
www.ncvovol.org.uk/collaborativeworking

Cabinet Office
Working in a Consortium

Legal Structures for
Questions?
Malcolm Lynch, Partner
Charities and Social Economy Team
malcolm.lynch@wrigleys.co.uk
www.wrigleys.co.uk
Tel: 0113 244 6100

Economic Evaluation for Charities
Sue Holloway, Director
November 2013

PBE aims to match professional economists with
charities;
providing pro bono help to measure performance
and understand charity impact, and
fostering a culture of volunteering within the
economics profession

© Pro Bono Economics

126

Established March 2009

146 charities

-50%

33 completed projects
UK analysis

265 active economist
volunteers

Vfm of interventions
30
129
106

Data collection advice

Other economic advice
Barnado’s


Academics

Public sector/
charity
Private sector

STAFF
F/T Director
F/T Operations Manager
P/T Economist
managing 40 projects

What questions
can economic
analysis answer?

Which intervention is cheaper?

Compare two interventions with known outcomes:

Cost minimisation analysis
identical outcomes e.g. 2 providers of sheltered housing
compare total costs

Cost effectiveness analysis
different amounts of the same outcome e.g. 2 different
employment programmes
compare unit costs – cost per job


129

Is the intervention worth it?

Cost benefit analysis
Compare value of costs with value of benefits
Positive benefit cost ratio – it’s worth it!

Social cost benefit analysis
CBA including wider benefits

Social return on investment
particular methodology for social CBA emphasising role and
input of stakeholders

Break even analysis
No control

130

Key steps for carrying out
economic analysis

Estimating impact

Measure outcomes
Best estimate of what would have happened anyway (the
counterfactual)
Outcomes minus counterfactual = impact
A measurement minus an estimate = an estimate


132

Control Groups

National average
PBE: Foundation Training Company

Before
PBE: MEAM pilots – adults with multiple needs

Matched records in admin dataset
Peterborough Social Impact Bond/MoJ datalab

Natural experiment in charity data
PBE: Barnardos

RCT
Education Endowment Foundation/Social Research Unit

133

Whose perspective?

Value to society
won’t include transfer payments e.g. tax and benefits

Value to Exchequer
Increase in tax receipts (+) or increase in benefit payments (-)
Potential costs avoided
Cashable savings

Value to individuals
change in income including benefits (+)


134

Which benefits?

Hard outcomes
Qualifications → employment → lifetime earnings
Costs avoided by public services

Soft outcomes
Early stages of econometric work in this area
Related to income, so only for those who are earning
SROI uses stakeholders to identify proxies


135

Which costs and values?

Input costs
Programme costs
Volunteer input
Other activities

Benefit values
Average costs
Marginal costs


136

How useful would it be for
my organisation?

Making Every Adult Matter pilots - what FTI measured
Service use

Join pilot

Without the pilots

Impact

With the pilots

Time
− 138 −

Before and After?
Clients had had their needs for a number of years

Average age of first
involvement

Homelessness services
Drug or alcohol
services
Mental health services
Prison / offender
services

Average length of
involvement

23

9 years

19

7 years

15

8 years

23

11 years

− 139 −

Costs of multiple needs - data collected
Criminal justice system

Health and mental health















Arrests
Other police contact
Magistrates court attendance
Crown court attendance
Nights in prison
Nights in police custody

Visits to GP
Visits to A&E
Nights in hospital
Nights in mental health hospital
Outpatient appointment
CMHT appointment

Drugs and alcohol

Housing

 One-to-one contact with drug and alcohol
team
 Group contact with drug and alcohol team
 Weeks on substitute prescriptions
 Nights in inpatient rehab and detox

 Rough sleeping
 Direct access hostel
 Room in shared private rented sector
property
 Own private rented sector tenancy
 Second stage supported accommodation
 Own social tenancy

− 140 −

Findings – varied over three pilot areas
Cambridgeshire (15 clients)

£600,000

Total cost of service provision

£500,000

Housing services

£400,000

Mental health
services

£300,000

Increases in
housing, health, and drug
and alcohol costs to help
clients address their
multiple needs

Healthcare
services

£200,000

Drug and alcohol
services

£100,000
Criminal justice
system
£0
Estimated service Actual service use
use without the pilot

− 141 −

Large savings in crime
costs resulted in an overall
cost saving

How was this used?

• In combination with well-being data and an assessment of
the process
• To highlight that interventions with certain beneficiaries will
not necessarily save money in the short term
• To support the case for further data collection
“We knew that we wanted a really strong economic
evaluation of the MEAM pilots and we knew what we wanted
to measure; … it is attracting a lot of positive interest from
across the sectors in which we work.”
Ollie Hilbery, Project Director, MEAM

142

Panel questions


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