The Scottish Government

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1. Introduction, Brief and Approach

1.1 Supporting People is a national fund, introduced in Scotland in April 2003 to replace a mix of client-led and programme funding streams, including an element contained with Housing Benefit (latterly designated as Transitional Housing Benefit or THB) and SNAP, with an integrated fund allocated to local authorities specifically for housing support services. In the period leading up to April 2003, local authorities sought to identify housing support activity within their area, and have such activity recognised as potential housing support activity - thereby securing an appropriate level of Supporting People funding for the their area ⁶, At the same time, local authorities were expected to develop a clear strategic approach to housing support: the purpose of Supporting People was to enable each area to identify and meet housing support needs, and not simply be driven by the past profile of provision.

1.2 The level of housing support funding in Scotland has risen markedly over the last few years: from £80m in 2001 to £217m in 2002/03, and to £426m by 2003/04. While the 2001 figure is likely to be an under-estimate resulting from measurement issues (with too few housing support activities properly identified and costed), the latter increase reflects a very real increase in provision. Such significant cost increases could not continue, and the then Scottish Executive implemented a cost containment-programme: funding fell slightly to £421m in 2003/04, and to £407 in 2005/06. Funding will be held at £399m in 2006/07 and increase slightly to £401m in 2007/08. Overall, in the period 2004/05 to 2007/08 a 6% decline in Supporting People funding is planned.

1.3 Critically, at the same time as the total amount of grant is being reduced, the distribution of funding in Scotland is being reformed, to ensure that the allocation of grant has a better fit with relative need ⁷. As a consequence, over the three year period to 2007/08, a number of authorities will experience a marked decline in the level of grant (up to 18%), while others will receive increased grant - typically 5% to 10%, although in some cases significantly more.

1.4 The fact that Supporting People has been in place for three years (together with the THB during the transition period) and the need for financial revision clearly indicates a need to further develop the strategic approach to housing support. The Scottish Executive therefore commissioned a series of research studies:

• An analysis of costs and benefits of the Supporting People programme
• A review of all services provided under the programme: examining their strategic fit, ensuring they provide value for money and provide good quality support. An initial analysis of the first round of service reviews has been undertaken in-house. Further analysis of the subsequent service reviews has been commissioned.
• Work is underway to develop outcome measures.
• Following a scoping study, a comparative review of unit costs in Scotland and England has been commissioned. This is considering the very different profile of costs that has emerged between the main client groups in each country (and between regions).

1.5 This report is concerned with the first of these studies: the analysis of costs and benefits of the Supporting People programme.

Study Objectives

1.6 The overall aim of the research is to explore the costs and benefits of housing related services provided by the Supporting People programme across the range of clients receiving services. The project has a number of specific tasks/objectives:

• To identify, detail and quantify the additional benefits generated by the Supporting People programme - both overall and by user group. Where it is not possible to quantify these benefits in monetary terms, alternative evidence is to be included to support their inclusion in the analysis.
• Identify, detail and quantify the costs of the Supporting People programme - both overall and by user group.
• Assess whether the programme represents value for money, based on a comparison of costs and benefits.
• Undertake further analysis of costs and benefits to consider at what point increases in programme funding stop producing corresponding improvements in outcomes/benefits.
• Provide recommendations on
• How the benefits, costs and impacts of Supporting People services could be more effectively measured
• Where data are incomplete or of poor quality, and how this could be addressed

Study approach

1.7 The study approach was informed by the pre-existing study of the costs and benefits of the Supporting People programme in England undertaken by Matrix Research and Consulting ⁸. During the latter stages of the present study reports became available from two further studies conducted elsewhere in the UK. These reports concern a study of the Costs and Benefits of the Supporting People Programme in Wales also undertaken by Matrix ⁹ and a draft report by Capgemini of the Financial Benefits of Supporting People: a final version of the latter is scheduled for publication in 2008 so there is a limit to what we can say about its contents in this report. ¹⁰

1.8 As is discussed below, the three studies have important features in common. Tribal Consulting formed the conclusion that the methodologies in these studies could not be applied without modification to the Scottish programme - because of differences between England, Wales and Scotland in relation to the programmes themselves and because of differences in data availability. Tribal also consider that aspects of the measurement of benefits in these studies make stronger assumptions than were considered to be appropriate in the present study. Nevertheless, the present study has considered the conclusions which follow from the application, so far as is possible, of the methodologies used in those studies to the Scottish evidence.

1.9 The key differences between the English, Welsh and Scottish contexts in relation to Supporting People ( SP) include:

• Differences in the operation of SP - Scottish categories are slightly different as are some of the funding streams included
• Differences in the social welfare system - such as free personal care for the elderly in Scotland
• Differences between the data sets available

1.10 The Matrix studies focussed primarily on those benefits of the Supporting People approach which could be not only quantified but also expressed in monetary terms. At the same time, the studies acknowledge that not all benefits of SP are amenable to such measurement.

1.11 The Supporting People programmes in England, Scotland and Wales are diverse and varied in terms of client groups and types of support. To make the analysis manageable, the Matrix study in England focused strongly on the client categories that accounted for the greater part of total SP spending (incidentally these were generally the categories for which quantifiable measures of benefit were available). This general principle was adopted in the present study and so a starting point for the analysis was to establish the profile of spend per client by client group in Scotland. As will be discussed below in Chapter 2, the datasets available made this seemingly straightforward task extremely difficult.

1.12 For each of the main client groups identified, the study reviewed:

• The characteristics of the group
• The main services provided to the group
• The level of resources committed to those services and changes in that over time ¹¹
• The intended outputs of the services in terms of benefits to individuals, achievement of stated policy objectives and savings in public spending
• The available evidence on programme performance and impacts/benefits

1.13 Our overall approach is focussed on analysis of the key client groups and the services provided to those groups. Our initial objective was to present a comprehensive analysis, with priority being given to the client groups which account for the vast majority of SP spending:

• Older people
• People with learning disabilities
• Homeless people
• People with mental health problems
• People with physical disabilities
• Young people
• However, data limitations made it impossible to calculate average costs per client data at the level of detailed client groups. It was necessary instead to consider costs and benefits at the level of what were termed "super-groups". This approach enabled data on costs and client numbers to be combined (Chapter 2 sets out the approach).

1.14 The analysis of the benefits of SP proved particularly challenging - both in terms of the identification/measurement of benefits and the attribution of benefits

1.15 The analysis of benefits in the Matrix studies was strongly focussed on savings in (mainly public) expenditure which were held to be attributable to the existence of SP programmes. Thus it was argued in those studies that SP supported interventions reduced the prevalence of "adverse events" which would have give rise to public spending. To take a specific example, it was suggested that many SP programmes prevented people from experiencing events (such as accidents) which would give rise to health care expenditures - a benefit of SP thus being the health spending saved.

1.16 This "avoided cost" measure of benefit is obviously not complete - impacts on, for example, the quality of life of clients will not be reflected in cost savings. A second problem is the limited evidence of the effects of SP on outcomes for clients. In many areas of activity there is very little information on the effects that programmes have on the "adverse events" which are central to the avoided costs analysis. This is compounded by the fact that the clients of Supporting People services are often in receipt of a range of services - it is often unclear from the evidence how far SP support - as opposed to the other interventions or services - is responsible for the outcomes that may/may not be achieved.

1.17 In the face of these problems the English and Welsh studies have had recourse to some fairly arbitrary assumptions concerning the effects of interventions. The present study has sought as far as possible to rely on information and parameters that are evidence-based and to avoid using arbitrary assumptions. The "price" of this approach is that in some areas the assessment of comparative costs and benefits is less complete than would have been wished.

1.18 To summarise, the approach taken in this study has been:

• To formulate client groups for whom reliable data on costs and beneficiary numbers exist
• To identify the intended outcomes of SP programmes delivered to those groups
• To assess the impact of SP support primarily in terms of those intended outcomes on the basis of existing evidence
• To quantify the "avoided cost" benefits of SP
• To assess the existence and importance of other benefits.

1.19 The study has drawn on the following data and information.

• The costs data were largely drawn from the Scottish Executive returns (using unpublished data provided by the Executive). In a small number of cases these have been amended to take account of information collected during case studies, or in response to telephone queries that we have made.
• Information about client numbers, the profile of clients and the projects were also drawn from Scottish Executive returns (this was a combination of published and unpublished data provided by the Executive). However, it is essential to be aware that this is a separate dataset from the financial data, and is collected using a slightly different set of definitions (specifically, the financial dataset does not have an "other" client category, while the client data set does - this means that the financial information and the user information does not match). Further, the bases for collecting the data differ - the client group classifications used in the financial data are based on the project (for example, a service for homeless households), whereas the client dataset classifies each person using the service according to their primary characteristic. Thus, not all the people using the homeless service in previous example need be classified as homeless in client dataset - some may have a more pressing problem, such as being a drug users or HIV/ AIDs or escaping domestic abuse. Again some amendments have been made to take account of information collected during case studies, or in response to telephone queries that we have made.
• Additional information was collected on the number of projects, changes in the services provided and the importance of the Supporting People funding, directly from SP lead Officers. This survey was circulated to all lead officers, and 26 of the 32 Scottish local authorities responded.
• A set of case studies were conducted. Four local authority areas were identified for the case studies:
• Aberdeenshire A predominantly rural authority, with an increasing budget. This area provided an opportunity to assess the effect of rurality on costs and spending priorities.
• Edinburgh: This is a city authority which is undergoing a reduction in the SP budget. Edinburgh has adopted a different review process linked to budget allocation because of need to live with reducing funding.
• South Lanarkshire: This is a high spending authority which, at least initially appears to have a fairly typical service profile. Budget reductions have been programmed.
• West Lothian: West Lothian appears to be a low spending authority, with fairly a typical service profiles. Programmed budget is fairly flat.
• The case studies served a number of purposes. They enabled us to
• explore the processes by which resource allocation decisions had been made
• examine issues around value for money at the local level, including
• explore the impacts of Supporting People services on clients
• explore the costs and client data, so get a clearer understanding of the datasets
• The overall analysis of cost and benefit draws together information from the literature review, the survey and case studies and the data analysis to produce an assessment of costs and benefits at the level of programmes and client groups. The analysis seeks to assess benefits in monetary terms while acknowledging that this is not the totality of the benefits of Supporting People.

1.20 Finally, and in recognition of the difficulties which arise in assessing the qualitative impacts of SP we have included in the report a number of individual case studies which illustrate how SP has helped people facing different types of problem. We cannot say that these cases are statistically representative but we consider that they provide accurate illustrations of the way in which SP funded programmes work.

Structure of this report

1.21 This report is structured as follows:

• Chapter 2 explores the components of the Supporting People programme, client numbers and the cost of the programme
• Chapter 3 considers the benefits generated by the programme, and the considers the methodological problems encountered in fully quantifying benefits
• Chapter 4 moves on to the development of the Supporting People programme, drawing on the evidence collected from the survey of SP lead officers and the case study interviews
• Chapter 5 provides an analysis of the costs and benefits of the programme
• Chapter 6 sets out our conclusions and recommendations

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