BiFab: intervention analysis

Economic Appraisal: Purpose and Methodology

Per the Green Book and SPFM, it is important to undertake an economic appraisal when considering intervention options. When an economic appraisal is undertaken in advance of an intervention, it helps set the basis for regular monitoring and evaluation to be conducted following the intervention, which helps analyse and assess actual impact. Although VfM was considered by SG, in the absence of a documented Green Book compliant economic appraisal, we have undertaken an ex-post economic evaluation that seeks to estimate the value of benefits delivered by the intervention.

Approach

To identify and estimate the monetary value of benefits achieved by intervention, we considered each of the four strategic themes outlined in the original strategic case for intervention. Across each of these themes, we considered:

1. How the intervention would help deliver benefits for the strategic theme.

2. The extent to which evidence provided suggests that the benefit was achieved.

3. The extent to which the benefits would have been achieved in two counterfactual cases.

The first of these steps involves developing a simplified ‘Theory of Change’ per strategic theme, outlining clearly how the intervention should theoretically deliver benefits of the strategic theme. This analysis is important to help establish a clear rationale for how the intervention delivers positive outcomes and impacts, that in turn deliver economic benefits.

Having established this rationale, we then considered the extent to which provided evidence suggests that the desired outcomes and impacts were actually achieved. Where there is limited evidence that the desired outcomes and impacts of the strategic theme were achieved, it is not possible to estimate monetised benefits associated with this strategic theme.

Where the evidence suggests the positive outcomes and impacts associated with the strategic theme were achieved, we conducted economic appraisal to monetise the value of these benefits. For each of these monetised benefits, we then assessed the extent to which these benefits would have been achieved in two counterfactual cases. This assessment allows us to identify the additionality of the benefit, considering the extent to which benefits associated with the intervention would have been achieved in the counterfactual cases. We summarise this in the form of a Green Book compliant VfM analysis which includes a benefit cost ratio (BCR).

Methodology

Step 1: Identify key benefits to be delivered by the intervention

Approach: Utilise strategic themes from the strategic case

Step 2: Identify rationale for how intervention delivers these benefits

Approach: Conduct Theory of Change analysis

Step 3: Assess the extend to which desired benefits were achieved

Approach: Review available evidence to assess whether key benefits were achieved

Step 4: Review the additionality of the intervention

Approach: Develop counterfactual cases to assess additionality