In order to calculate an accurate cost-benefit analysis of an intervention, the full costs of developing, delivering and evaluating the intervention need to be identified.
The cost of an intervention includes obvious costs such as advertising, designing and printing promotional or training materials, fees for external consultants, travel and accommodation. But it also includes the staff costs of the employees for the amount of time they spend working on the project.
Local authorities often do not include the cost of the time spent by their employees on an intervention (whereas they do include the cost of external consultants). However, the true cost of road safety ETP interventions does include the cost of the local authority staff, and others, who design and deliver it. Additionally, staff costs add up to more than just the basic salary, see the next section for more details.
Staff Costs (including overheads)
Many organisations calculate a day rate for staff time. This normally includes the staff member's salary + employer's national insurance + pension contributions plus a proportion of the organisation's running costs (overheads, such as offices, computers, utility bills, supports services such as HR, finance, administration, IT, etc) that are relevant to the intervention. This is then divided by the number of working days in a year, see below.
|(Salary + employer's national insurance + pension contributions + overhead rate)
|261 (number of working days per year)
Overheads are the proportion of an organisation's normal operating costs that are spent on the intervention. Typical overhead are administration support, HR, Accounts, IT, telephone, postage, photocopying, office premises and equipment, etc.
It is not normally possible to accurately allocate indirect costs to an intervention. Therefore, an overhead rate is usually calculated and included in the staff day rate. For example, the total overhead costs for the road safety department, for that year, could be divided by the number of staff in the department which would give an overhead rate for each staff member. This number can then be fed into the staff day rate calculation.
Annual overhead cost for department
(e.g.postage + photocopying + support from other departments + telephone costs etc.)
|Number staff in department
Intervention Specific Costs
Any other costs, i.e. that are not staff costs or overheads, should fall under intervention specific costs. These are costs that you would not incur if it were not for that particular intervention. For example, travel expenses, consultants' fees, print run for a flyer, purchase of equipment specifically for that intervention (e.g. a promotional banner for a specific road safety event). Sometimes these are known as Capital Costs, which may need to be shown separately to meet some funder’s requirements.
Overall Cost of the Intervention
To calculate the overall cost of the intervention you need to bring together all the costs listed above. One example of how to do this is shown below.
|Senior Staff Day Rate
||£450 x 3 days = £1,350
|Standard Staff Day Rate
||£350 x 15 days = £5,250
|Training venue (intervention specific cost)
|Travel expenses (intervention specific cost)