This page is part of our decommissioning toolkit.

Commissioners and providers need to be clear about the costs, savings and benefits of providing a service if they are to avoid poor decommissioning decisions.

Understanding costs should include an understanding of direct costs, indirect costs (including overheads), short-term and long-term costs (such as the rent on buildings) and costs borne by providers not funded as part of the grant or contract (e.g. core costs, costs of volunteers and potential costs in pensions and  Transfer of Undertakings (TUPE) transfers).

Understanding savings and benefits is equally important.  Our research pointed to a general consensus among commissioners and providers that this should include understanding social value or social benefits as well as savings accrued to other departments and agencies. Ideally some form of cost benefit analysis, such as Social Return on Investment (SROI), would allow for better informed decisions about decommissioning. However, cost benefit analysis can be complex and time-consuming, although there is an increasing awareness of SROI and the agencies that work with third sector organisations (TSOs) to undertake these analyses.

Finally, commissioners also need to be clear about who holds the budget, especially the financial obligations of each partner in a pooled funding arrangement.

Table of contents

Decommissioning toolkit: Table of contents

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Understanding quality, performance and the provider market

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Understanding contracts