Calculating Full Cost Recovery for Bought in Services – Academies

The following guidelines are provided for Academies and other Learning Providers wishing to buy in services from the Locality. A worked example of a cost benefit model is provided below for this purpose. In addition a Service Level Agreement template is provided in Appendix 1.

Further information can be found on the Services to Schools website -

  1. Areas to consider
  • Staffing

The proportion of time that is spent on direct work with young people and the time that is spent providing administration, training etc.

This can be assessed for each job level e.g. Level 2 workers and can be calculated by working out the proportion of their hours which are face to face, administration, training etc.

  • Fixed and variable costs

The proportion of management time etc can be broadly calculated from the budget and would include corporate services, and management time – this can then be given as a percentage to be ‘added on’ to the budget for the project.

  • Premises

Cost of building – rent, running costs could be per project or averaged out as part of on costs depending on how this is organised.

  • Relating costs to outputs or outcomes

Costs can be related either to outcomes e.g. achievement levels, number of contacts and what level of contact or to outputs e.g. the number of sessions / hours youth work is delivered.

The suggestion is that ‘output’ is used but within any specific contract there is an agreement of the number of contacts expected and the expected outcomes for the young people involved.

  1. Overview

Components of a unit cost per hour of delivered youth work would therefore be: -

  • Cost of staff delivering at JNC/LGE rates of pay.
  • Fixed costs added as a percentage of youth workers salary calculated to include central management support (induction, training, supervision etc), finance, central administration, salary overheads e.g. pension etc.
  • Operational costs – to include project related administration, project related training, equipment, rent, resources, travel, IT. This could be in the region of 15-20%. Where some of these services are provided by the host agency the operation fee could be less than 20%. Where no extra services are provided, the fee could be up to 20%. This would also allow flexibility for charging according to the capacity of the organisation.
  1. Worked Example

Youth Worker Costings for Academies Subscription Service, January 2012

Hourly Rate
Cost of 35 hour 52 weeks at JNC 6 / £20,547
Chargeable over 38 weeks, 7 hours a day / £15.53
Overheads / £0.70
£16.23 / Service cost
£16.00 / PAYP Rate
‘Pay as you go’ Daily Rates / PAYG / Rounded
Hourly rate / £16
Half Day / £48 / £50
Whole Day / £96 / £100

Lead Youth Worker Costings for Academies Subscription Service, January 2012

Hourly Rate
Cost of 35 hour 52 weeks at JNC 10 / £23,671
Chargeable over 38 weeks, 7 hours a day / £17.89
Overheads / £0.81
£18.70 / Service cost
£19.00 / PAYP Rate
‘Pay as you go’ Daily Rates / PAYG / Rounded
Hourly rate / £19
Half Day / £57 / £60
Whole Day / £114 / £115

Notes:

  • Costed staff at top of pay scale for each type (as for other E&P costings).
  • Costed over chargeable hours of 189 school days at 7 hours a day.
  • Includes 4.5% overheads
  • Half day 3 hours and full day 6 hours.

Appendix 1

Service Level Agreement Template for Localities and Academies

  1. Parties to Agreement

………. (School/Learning Provider)

….……..Locality Team

  1. Additional Support Required

Short description of the services required to be delivered.

  1. The School/Learning Provider will:
  1. Provide funding of £xxxx to cover the cost of the agreed service for the period (month/year to month/Year).
  1. The funding will be provided in two six monthly payments/four quarterly payments.
  1. Provide suitable accommodation for the service to take place.
  1. Nominate a representative to act as the key link between the School/Learning Provider and the Locality.
  1. Agree the number of sessions and type of sessions to be funded.
  1. Meet xxxx times per year to discuss performance/progress with the work being funded.
  1. Any additional specific criteria to be added here.
  1. The Youth Support Service will:
  1. Provide xxx YPW/GA workers for xxx hours per week/month to deliver(description of service required).
  1. Nominate a representative to act as the key link between the School/Learning Proividerand the Locality.
  1. Provide supervision and support to all youth work staff and volunteers. Ensure that all youth work staff and volunteers delivering this service are appropriately skilled to deliver each aspect of the work they are required to do, and that they can access any training they need to fulfil the role.
  1. Ensure all administration is carried out to meet the legal requirements around Health and Safety and Child Protection, as well as Youth Work quality development standards. This will include ensuring that all youth work staff and volunteers delivering this service have had Enhanced Disclosure checks.
  1. Invoice the School/Learning Provider on a 6 monthly/quarterly basis.
  1. Make arrangements for staff sickness and to arrange sickness cover where possible.
  1. Monitoring and Reporting

Monitoring will be jointly undertaken by the locality team and the school on a half termly basis and will focus on learning outcomes, behaviour, attendance and progress.

6.Specific Requirements (to be negotiated locally)

(This section enables the Locality and School/Learning Provider to agree specific local arrangements for the delivery and support of the service and should be added into this agreement prior to signing. This would include main liaison contacts for targeted students, child protection and access to resources )

7.Review of Agreement

A meeting between both parties shall be called to review the working relationship after the first six months. After the first six months a formal annual review of the partnership should be maintained.

8.Disagreements/Disputes

In the event of a dispute the YSS workerand the School/Learning Provider representative will meet to resolve the issue. If no agreement can be made then the two interested parties would invite the Head Teacher/Principle and the Locality Manager to facilitate another meeting to resolve the issue.

9.Changes to Agreement

Any additions need to be signed by both parties and dated. This would then need to be fixed to this Agreement. Any changes need to be either signed by both parties or a new document produced.

10.Period of Agreement

The period of this Agreement will be for 1 year.

11.Signatures

On behalf of School/Learning Provider

NAME (Block Capitals) ......

SIGNATURE ...... DATE ......

On behalf of Locality Team

NAME (Block Capitals) ......

SIGNATURE ...... DATE ......