Improving DWP Assessment of the Relative Costs and Benefits of Employment Programmes

DWP runs a range of employment programmes. The department has regularly undertaken comparative cost benefit analyses (CBAs) of large numbers of these programmes. These exercises estimate the absolute and relative cost effectiveness of the various interventions. The department also frequently undertakes CBAs for individual employment programmes at the appraisal and evaluation stages of the policy cycle. To aid comparability and consistency in the assessment of its policies and programmes, the DWP has developed a CBF. This framework describes the steps that should be taken and the assumptions that should be made when conducting a CBA of an employment programme. The CBF ultimately attempts to ensure that public funds are spent efficiently and on programmes that generate the greatest net benefits to society. This report is intended to help improve the CBF. The research consisted of two components: a literature review and new empirical estimates from DWP administrative data. The the literature review considered the following topics: general equilibrium effects; subgroup impacts and distribution of impacts; duration of benefits and employment and wages; multiple participation in programmes or other interventions. The analysis of the administrative data provides: empirical estimates of gross duration of benefits and employment, and annual nominal taxable earnings. The estimates were produced for the range of New Deal programmes