A Cost-Benefit Evaluation of The Money House 5-Day Programme

• Description of the programme
• The study
• Key findings
• Points to consider

Description of the programme

The Money House 5-day programme is an accredited financial literacy programme which is delivered by MyBnk education officers to young people (aged 16 to 25) who are already living independently or are about to do so. It is aimed at increasing financial capability – through practical financial skills and life skills to help them live well independently – and preventing homelessness. Participants learn about tenancies, the benefits system, household bills, banking, budgeting an spending habits, shopping, borrowing money and scams.

The programme has mainly been run in three flats in the London boroughs of Westminster, Newham, and Greenwich which simulate the conditions young people are likely to live in when they first live independently. In 2018 a group of young people in prison (HMP Isis) also received the programme. In spring 2020, a fourth flat was added, in Haringey, London, and a virtual version of the programme was piloted at a similar time in response to the Covid-19 pandemic.

Between January 2018 to August 2020 nearly 1,000 young people attended the programme, though the report implies that the programme had reached more beneficiaries than this over a longer period.

The study

MyBnk commissioned NEF Consulting to conduct a social cost-benefit analysis to help them understand the social and environmental value that is generated from investment in the 5-day The Money House programme.

The social cost-benefit analysis approach involved identifying stakeholders, mapping and evidence outcomes, establishing impact, and then calculating the cost-benefit analysis based on the data and assumptions produced in the earlier stages of the approach. This study modelled baseline (first day of the programme), end line (last day of the programme), and follow-up (1-11 months later) data from January 2018 to August 2020, during which time 984 participants attended (and 821 completed) the programme at one of the three original London flats or HMP Isis.

The social cost-benefit analysis used both matched and pooled (non-matched) data (but prioritised the matched data), required a minimum sample size of 50 participants for any measure included in the model and assumed that participants not completing the programme achieved only 50% of the benefits. To best understand impact, the methodology also included a counterfactual, applied a percentage of attribution and considered displacement effects.

Key findings

• Net cost-benefits: The programme delivered an estimated £1.76 (between £1.52 and £2.92) for every £1 invested. This is equivalent to £1,457,400 in value for an investment of £827,100 (£963,300 of which is created for programme participants and £494,100 of which is created for the state or housing providers). The net value per 5-day course could potentially be more than tripled if full course capacity is met.
• Reduced debt: 1.8% fewer participants experienced debt as a result of the programme, which represents a social value to individuals of £5,600.
• Improved financial comfort: Participants were 0.9% more likely to be doing well financially, which resulted in a social value of £203,600.
• Improved emotional wellbeing: Participants were 3% less likely to report experiencing money-related anxiety or depression, which generated a social value of £754,100 to participants and returned a cost saving to health services of £139,600.
• Reduced evictions: Participants were 0.7% less frequently evicted than non-participants, which returned a cost saving to state and housing providers by reducing rent arrears write-offs of £40,400 and eviction costs by £101,700.
• Direct costs avoided from fulfilling statutory obligation to Care Leavers: A saving of £212,400 to the state/housing providers.

Points to consider

• Methodological strengths/weaknesses: The authors note that the results are highly sensitive to certain assumptions they make in their modelling, but that they have taken a robust, conservative approach.
  • The authors note other limitations such as the necessity of excluding some outcomes due to small samples, inability to factor in longitudinal impacts or the potential impacts on secondary beneficiaries, the lack of verifiable proxies for some outcomes and the inability to capture extent of change on some measures.
  • The counterfactual is based on assumptions rather than observation and, although those assumptions are grounded in secondary evidence, they may be subject to error.
• Applicability: The cost-benefit analysis is necessarily reflective of the costs of the specific programme and the opportunities, costs and benefits that exist within the particular locale of the programme. Although this does not lessen the quality of the study insights per se, it does potentially reduce the applicability of the programme and the generalisability of the findings to other contexts.
• Relevance: This report is applicable to those interested in financial literacy programmes, and particularly those interested in Cost-Benefit Evaluations.