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Problem

Centrepoint is a leading national charity that works with young people, aged 16-25, who are homeless. They provide accommodation, health services and a range of support to help young people back into accommodation, into education, training and employment. Centrepoint approached Pro Bono Economics for help with a cost-benefit analysis of their services.

Solution

PBE invited economist volunteers from Oxera Consulting to scope the project, and Fod Barnes, a senior adviser. They focused on assessing the impact of the intervention implemented by Centrepoint and quantifying the scale of public costs avoided relative to the costs incurred by Centrepoint for this intervention and the usually higher cost associated with delaying the same intervention.

Results

Every pound spent on Centrepoint services reaps an estimated net benefit of £2.40 to the public purse. Potential public costs avoided through the services arise from education and lower barriers to employment, lower drains on welfare benefits, lower criminal justice costs due to lower involvement in crime and few health problems leading to a lower burden on public healthcare systems.

Impact

The study finds that Centrepoint’s intervention in the early stages of homelessness saves substantial amounts of public expenditure that would otherwise have been incurred due to the adverse impacts of homelessness. Early intervention enables people to work and pay taxes; reduces the amount of benefits payments made to people; reduces involvement in crime and the resultant costs on the criminal justice system; and improves physical and mental health, reducing the burden on the public healthcare system.

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Andy Haldane (Founding Trustee of Pro Bono Economics):

“Overall the analysis highlights the value of intervening early in the lives of homeless young people and underlines the importance of the services that Centrepoint provides. The resulting figure, an estimated £2.40 benefit to the public purse for every £1 spent on services, is powerful information, and we hope this report supports the charity in its mission to improve the lives of young people facing homelessness.”

Andy, Service user (name altered):

“Life was a struggle before. Centrepoint helped me turn my life around. I wouldn’t have known what to do without them. I was involved in their Lifewise programme, which helped teach me life skills; I had a key worker, a counsellor and a social worker. It’s down to their support that I’m where I am now.”