Police Information

Economic Evaluation of Policing Activity

Wed, September 19, 2001

Source: J E Stockdale, C M E Whitehead and P J Gresham

Policing & Reducing Crime Briefing Note Applying Economic Evaluation To Policing Activity

Background

Traditionally the police have allocated resources in line with their operational requirements - with most resources being distributed in response to demand, and on the basis of the likelihood of success rather than cost. This position is now changing for a variety of reasons: 

• The requirement, following the Comprehensive Spending Review, for Police Authorities from April 1999 to produce Efficiency Plans describing how they will find year on year efficiency savings of 2%; 
• Government proposals to place, from April 2000, a statutory duty on local authorities including Police Authorities) to ensure Best Value in service delivery; and 
• A growing ethos throughout the public service of business harmonisation, performance measurement and benchmarking to ensure improvements in service delivery. 

In short, there is a growing need for the police to make resource allocation decisions transparent, to evaluate outputs and outcomes, and to demonstrate that resources are being used to generate the best returns. This report therefore introduces the concept of economic evaluation to policing. Economic evaluation involves the costing of inputs and valuing of outputs and outcomes, with particular emphasis on assigning monetary measurements wherever possible. It provides: 

• An analysis of different courses of action in terms of their costs and consequences; 
• An input into the decision-making process for allocating scarce resources effectively; and 
• A mechanism for assessing the value of these decisions. 

Since 1993, there has also been greater emphasis on proactive policing. Forces have been urged to direct resources to crime desks and crime management units, as well as intelligence-led targeted policing initiatives. The increasing importance of proactive policing has highlighted the need to ensure that it provides both an efficient and effective use of resources. The concept of pro-activity itself also emphasises the importance of evaluating the potential value of activities before they occur, and of comparing actual costs and outcomes. Despite this, although there have been assessments of the effectiveness of proactive operations, there has been little attempt to evaluate whether proactive initiatives have proved an efficient and effective use of resources. This report therefore seeks to address these issues by taking the example of proactive policing to demonstrate the wider application of economic evaluation techniques. 

The research aims and methodology 

The research examined the feasibility of applying different economic evaluation techniques to policing activities and assessing their potential for guiding resource allocation decisions. It did so by taking pro-activity as an example of a policing activity. The aim was to: 

• Assess what economic evaluation might offer police managers: 
• Determine what evaluation methods could and could not be undertaken using currently available information; and 
• Ascertain what would need to be done to improve the basis for assessment. 

The research comprised three phases: 

• A survey of all 43 forces in England and Wales to provide a snapshot of proactive policing; 
• Case studies of initiatives in three forces with different approaches to pro-activity; and 
• The development of guidance for forces wishing to use economic evaluation to aid decision-making about resource allocation.

Key findings

There is a range of potential approaches to evaluation which vary in their practicability, but the most relevant approaches for policing are: 

• Performance indicators (PIs);
• Cost effectiveness analysis (CEA); and
• Cost benefit analysis (CBA). 

The study explains how officers might apply these approaches, pre- and post- implementation. Pre-implementation evaluation can help decision-makers to decide whether or not to undertake an initiative. Post-implementation evaluation can help them to determine whether the use of resources was worthwhile and to improve the basis for future decisions.  

Although the survey of forces indicated that evaluation was more common than in the past, there was only limited use of economic evaluation to assess resource use and to assist operational decisions. The survey also indicated widespread implementation of elements of proactivity in forces across England and Wales. These elements fell into three definable types of proactivity: specific individual initiatives; changes in policing functions to support proactivity; and changes in the force-wide ethos to encourage proactivity. The research examined the three approaches to evaluation (PIs, CEA and CBA) in relation to these three different types of proactivity. The case studies suggested that, for proactive policing, economic evaluation is currently only practicable in the context of specific initiatives; the approach was not so easily applied to functional changes or to changes in ethos. 

PIs, while a core aspect of operational monitoring, do not constitute a formal economic evaluation technique because they include no explicit valuation of inputs or outputs. Furthermore, although CBA might be the ideal approach to economic evaluation, the lack of data it requires means it is not currently feasible: it could not be applied in any of the case studies. The most comprehensive form of economic evaluation that could be applied in the case studies was CEA, and this is currently the best approach forces can adopt. CEA has the advantage of building on performance measures, while making the cost of an exercise transparent. 

Difficulties encountered, especially with the more diffuse changes, included the problem of obtaining cost estimates, which were directly related to the activity, and of identifying appropriate comparators. The question of how to value the benefits of policing activity remained the most difficult to answer.

The case studies highlighted the advantages of attempting to evaluate initiatives, especially from an economic perspective. At the most basic level, the identification of inputs, outputs and outcomes serves to make the nature of a projected or implemented exercise transparent. Whatever approach is taken, there is a clear need to compare the actual consequences of decisions with those, which were expected, in terms of both resource demands and outputs/outcomes.  

The lessons learned from this research apply not just to proactivity but to all forms of policing. Although the application of economic evaluation to policing activity is in its infancy, it has an important role to play in decisions about resource allocation. The appropriate technique and scale of an assessment will depend upon the size and replicability of the initiative, as well as the potential for both specifying inputs and outputs and measuring their costs and benefits. 

Points for Action

Current barriers to economic evaluation include: 

• Inadequate record keeping and data collection; 
• Inconsistency in valuing inputs - especially in costing staff time; 
• Lack of control of staff budgets at local level; and 
• Difficulties in identifying and valuing outputs. 

Addressing these issues would help forces undertake economic evaluation and ensure that pre- and post-implementation assessment of costs and consequences becomes routine. The limited application of even the simplest economic evaluation techniques means that there is little capacity to learn from existing good practice. There is, therefore, a compelling case for further action, including: 

the development of consistent measures or ‘Ready Reckoners’ of costs, which make explicit the basis on which staff time and other resource inputs should be costed; 

• Research to assess the range of costs per unit of output, which can act as benchmarks; 
• Assessing the potential for valuing benefits in monetary terms; and 
• Detailed consultation with particular forces applying pre- and post- implementation assessment techniques to develop a good practice guide for the application of economic evaluation across the full range of policing activities.

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