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The efficacy of neighbourhood saturation programmes in the UK

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We’ve just published our latest toolkit, on neighbourhood saturation models for local economic development. This sounds more than usually wonk-y, but in fact these approaches have been used in some well-known UK policies, notably the New Deal for Communities, which ran from 1998 to 2010, as well as more narrowly focused programmes such as Employment Zones and StepUP.

The neighbourhood saturation model uses programmes that engage a whole community – or large numbers of residents – to achieve change. That happens in two ways. First, programmes aim to create a critical mass of activity, which reaches everyone in the area. Second, programmes hope to build on social networks peer effects, so that (for example) cultures of ‘worklessness’ get weaker as more residents move into jobs.

In turn, that means residents’ groups and community leaders are crucial pieces of the policy machine, as they are well placed to set goals and reach out across a neighbourhood, including to residents regular policies might struggle to reach. For example, the New Deal for Communities was framed as a community-led initiative, built through a series of local partnerships, and made heavy use of residents’ groups to set partnership priorities and deliver services.

NDC worked across a whole range of economic, social and environmental goals. By contrast, other UK programmes have focused wholly on improving employment outcomes, as have most US examples such as JobsPlus. These typically involve a combination of financial incentives for job-seekers or employers, childcare interventions, job training, neighbourhood support for finding work, and mentorship.

So what did we find? We look at four studies in the US and UK, tracking wages and employment (we look separately at NDC). Four big things jump out.

First, for overall outcomes, programme effects are stronger for wages (2/3 studies) than for jobs (1/4 studies). It’s not easy to explain this. Possibly it’s easier for these kind of programmes to help people already in work do better, rather than change outcomes for unemployed people; perhaps saturation programmes as a whole would benefit from importing best practice from other areas of active labour market policy. One of our UK studies finds that financial incentives and careers advice are effective for those community members with high motivation but low qualifications.

Second, wage and employment effects are much stronger for some groups in the neighbourhood than others. In some cases, especially in the US studies, evaluations find big differences by gender and/or ethnic groups; in other cases, outcomes are better for harder to help or older age groups. That fits with how these programmes are supposed to work – through local social networks – but it also suggests that it may be harder to get whole neighbourhood change than change for certain communities within a neighbourhood.

Third, saturation programmes are expensive, especially when compared to traditional welfare to work and apprenticeship approaches. In turn, that suggests they are less cost-effective than these approaches. Learning from best practice should drive up cost-effectiveness, and it’s quite possible that a new programme today would run leaner than the older programmes we look at. In turn, that implies that programme managers should pay close attention both to overall costs, and consider closer targeting within neighbourhoods, perhaps working with communities where social networks are known to be strong.

Fourth, and more broadly, there may also be wider benefits to saturation programmes that have wider objectives, but the four studies do not allow us to reach strong conclusions on those additional benefits or programme cost-effectiveness in achieving them. However, we can get some sense of what broader saturation approaches can do by looking at the New Deal for Communities (NDC). This is a good example of a programme that aimed to improve wellbeing across a huge range of domains – not just employment, but also crime, health, housing quality and the physical environment. We found six NDC studies that passed quality filters, and evaluate these separately.

NDC programmes had fairly weak effects on employment (1/5 positive effects) and income (0/3), but did a little better on moving residents into further training (2/3 finding positive or mixed effects). On non-economic measures, 2/3 studies find positive effects on residents perceptions of crime, 1/2 studies find positive effects on crime experienced, no impacts on adopting healthy habits or satisfaction with housing (0/4 studies), but some positive effect on neighbourhood satisfaction overall (2/4 studies, with mixed impacts in the other two). Overall, a mixed picture – so many of the points we emphasis above about improving effectiveness would probably apply here too.