Evidence | Sep 21 2016

What is the cost of setting up a voluntary service year in the UK?

Generation Change has been vocal in calling for the Government to introduce a full time "year of service" in the UK, in line with similar citizen service schemes abroad in the US, France and Germany. Here we share some of our findings about the monetary cost of supporting such schemes.

Overview

The UK already has a range of full-time volunteering opportunities offered by charities that resemble a “service year” model. Two of our Founding Members, City Year UK and Volunteering Matters, run dedicated full-time volunteering programmes for around 500 young people each year.

But there are many other charities who offer dedicated forms of volunteering that goes above and beyond the one or two hours a week that you might expect from an informal role. The Wildlife Trusts, the Mayday Trust and uniformed groups such as the Scouts all rely on such volunteers.

UK-wide, we have found that there are at least 1,000 young people taking part in structured full-time volunteering. The independent review into full-time social action, launched by the Department for Digital, Culture Media and Sport (DCMS) estimates that the number of young people aged 18-25 who volunteer more than 5 hours a week might be as high as 3%.

What are the costs to deliver these opportunities?

Generation Change has asked some of these charities to share with us their actual unit costs – that is, their total costs for offering these programmes divided by the number of volunteers who actually take part. This is what we might call a “crude unit cost”. In reality, these costs would need to be re-assessed for any cost analysis based on the assumptions about the exact model you were looking to grow, which would each have their own economies of scale.

From looking at 5 programmes offered in the UK where at least 100 young people have taken part, we found an average total unit cost of £12,215 per participant

Recently, Pro-Bono Economics did a study to estimate the economic return on investment for full-time volunteers. Their study tried to understand what the costs and return on investment would be for a service year model that was backed by Government and scaled up to 10,000 volunteers. In this scenario, they used a unit of £13,455 per participant as their estimate for delivery costs.

Who pays?

What is interesting about these costs is that currently, the Government pays nothing at all. Except in cases where charities have managed to secure grant funding for projects, the costs are entirely met by a combination of charitable fundraising, corporate sponsorship and earned income.

Some charities have managed to find clever ways of reducing the costs. For example, Devon Wildlife Trust offers accommodation for up to 5 of its full-time volunteers – a model that has also been used by Student Hubs in the past.

This means that, unlike National Citizen Service (NCS), we do not expect Government to have to pay the full costs of a volunteer service year.

Where could Government funding be directed?

If the UK Government did decide to support full time volunteers in the UK, as we see in other countries, there are a number of ways they could do so without directly spending any money.

For example, one of the biggest steps that Government could take would be to provide a clear legal framework for full-time volunteering, to ensure that volunteers receive National Insurance Contributions, and can be properly given training, signposted by other careers services, and recognised by employers.

Alternatively, the UK Government could follow the United States, Germany and France, in providing some funding for full-time volunteers in the form of a stipend or living allowance – in exactly the same way that they do for apprenticeships, vocational training, NCS, or university students.

Pro-Bono Economics studied what the effects would be if the Government provided a stipend of £3,000 per person for taking part in a voluntary service year. This is considerably less than the $12,630 which the United States government pays to Americorps participants, or the stipends offered in Germany and France.

What is the return on investment?

In 2017, Pro-Bono Economics concluded that the economic benefits of full-time volunteering would exceed the costs of a Government providing a stipend of £3,000 per volunteer – returning between £1.20 and £1.60 for every pound spent.

At Generation Change, we believe this is a reliable but cautious estimate. In the US, Americorps has been evaluated by Columbia University as having an economic return of over $4 for every pound spent. Pro-Bono Economics has not been able to calculate the economic value of the work that is done by full time volunteers – which could be directed at pressing social problems that have a significant economic cost, such as educational disadvantage, natural disasters or social isolation.


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