Some say that economists know the price of everything and the value of nothing!

However, with so many social needs, it is important to make the best use of all our resources – human, environmental and capital. Financial flows measure only a part of all the resources used in delivering social policy and provide a very limited indication of the positive impact of the policy.

Cost-Benefit Analysis provides a tool to assess the overall value of policy initiatives. It attempts to take into account all the positive outcomes of a policy (for example, better child health, improved educational standards or a more pleasant living environment) and to place a monetary value on them so that they can be compared with the costs. Monetary values are used as a common measuring rod and, although it is sometimes challenging to find a suitable methodology for placing a value on social outcomes, HM Treasury decided some time ago that all policy initiatives should be subject to such analysis. We have experience in helping government departments to respond to that requirement.