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Research Report
No 259

Research to Inform the
Evaluation of the Early
Excellence Centres Pilot


Christine Pascal, Tony Bertram, Michael Gasper, Claire Mould,
Fiona Ramsden, Maureen Saunders

Centre for Research in Early Childhood

University College Worcester

The Views expressed in this report are the authors' and do not necessarily reflect those of the Department for Education and Employment.

© Crown Copyright 2001. Published with the permission of DfEE on behalf of the Controller of Her Majesty's Stationery Office. Applications for
reproduction should be made in writing to The Crown Copyright Unit, Her Majesty's Stationery Office, St Clements House, 2-16 Colegate,
Norwich NR3 1BQ.

ISBN 1 84185 477 8
February 2001

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80 DfEE Evaluating Early Excellence Centres

Table 10: Costing An EEC By Service Cost Method

Component Outlay Cost Imputable Cost Full Cost

Personnel £ £ £
Office Supplies £ £ £
Utilities £ £ £

Nursery Education
Personnel £ £ £
Consumables £ £ £

Day Care
Personnel £ £ £
Consumables £ £ £

Family Support
Personnel £ £ £
Consumables £ £ £

Adult Education
Personnel £ £ £
Consumables £ £ £

Personnel £ £ £
Food £ £ £
Consumables £ £ £

Building and Facilities
Maintenance £ £ £
Personnel £ £ £
Rent £ £ £
Energy £ £ £

Transportation £ £ £

Etc.... £ £ £

Full Costs £ £ £

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81 DfEE Evaluating Early Excellence Centres

The costing shown in the second table allows for a better determination of the costs of providing

particular services included in the EEC programme. It should be noted that Table 10 groups together the

direct costs associated with each service offered within the EEC. It also groups together the overhead

costs or joint costs of the services such as administration and building. A proportion of these can then be

allocated to each of the services provided as indirect costs. This type of cost classification can be useful

for analysing the cost effectiveness of particular services within an overall programme, as well as the cost

effectiveness of the programme as a whole. Calculating Cost Per Child Hour

This technique is described and promoted by the Audit Commission (1996b) for establishing the costing

for different forms of early childhood provision. Although the Audit Commission applied this technique

to non-integrated early childhood services, such as nursery classes, reception classes, preschools and

home visiting schemes, we believe that with some adaptation this approach is useful in the cost analysis

of integrated services for children and adults. The intention is to arrive at an easily applied calculation for

costing a service by cost per child hour or cost per adult hour or cost per family hour. Each of these

three cost calculations can be worked out using the same basic technique. We have found it is the most

commonly used basic cost calculation promoted by a range of national and international bodies working

in the field of cost effectiveness analysis. This includes the Audit Commission (1996b), the Inter-

American World Bank (Barnett 1996; Moran, Myers and Zymelman 1997), and the Cost, Quality and

Child Outcomes Study Group (1995).

This costing technique can be worked out using a cost tree (Audit Commission 1996b). A cost tree is a

set of figures on costs of services and usage of services. It is called a tree because the figures are laid out

on a page with links (or branches) showing their connections. An advantage of this approach is that it

lends itself to being incorporated into a computer spreadsheet, which allows ongoing revision and

updating, and comparison within and between services and EECs.

We have adapted the suggested cost tree methodology from the Audit Commission Report (1996b). The

adaptations have had to incorporate the multi-user and multi-focus services provided within the EECs in

order to demonstrate how the approach can be applied to the range of services for both children and adults

which operate within the Centres. It may also be used to cost EEC services for families as a whole. We

have described the basic methodology using cost per child hour within an EEC, focusing on those

services within the EEC that cater for children. However, it should be noted that the same technique can

be used for working out cost per adult hour or cost per family hour and the computer program is being

developed to provide these options.

Table 11 sets out the cost tree for EEC children’s services and identifies five stages in the cost analysis,

represented by Columns A, B, C, D and E of the table. Column E of the tree is used to enter basic

financial and other data about the identified services provided for children within the EEC. These data

should be the best available for describing the full range of services, their availability, take up and the

costs of these services. Before the cost tree can be completed, the costing of the services for children must

be calculated using the methods suggested earlier. Also, data must be available on the sessions offered

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166 DfEE Evaluating Early Excellence Centres

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