Youth Club Closures in London
Introduction
Youth clubs are community-based after-school programs that offer a place for teenagers to participate in sports and arts, gain mentorship, and socialize with peers in the hours after-school for free. In the UK, and in many other countries, they are popular and well-attended, usually by youths aged 10 to 18 years old. They are run by local governments or charities and in most cases, they depend largely on public financing.
In 2010, the United Kingdom underwent a Spending Review which meant cuts to many areas of public policy. Youth clubs – where local government has a responsibility to oversee the provision but no strict guidelines or requirements – were particularly hit. Spending on these services fell by 72% between 2010 and 2019. In the context of London, these cuts meant nearly 30% of youth clubs were forced to close.
Villa (2024) assesses the effects of these youth club closures on education and crime in London from 2010 to 2019. The paper uses a novel dataset on youth clubs collected through Freedom of Information Requests, administrative records from the Department of Education, and administrative records from the London Metropolitan Police.
The paper uses a difference-in-differences design to compare individuals whose nearest youth club closed to those whose nearest youth club remained open. After closures, affected students performed worse on national standardized exams and became more likely to commit crimes. The paper shows that these effects are not confounded by austerity in other areas, by composition effects, nor by potential selection into treatment. It also shows that the effects are due to the effects of these clubs–which are very difficult to substitute due to their specialized amenities–and rejects other explanations, like changes in policing strategies.
MVPF = 4.6
Net Cost
When calculating the net cost to the government, the paper considers the direct costs from closing youth clubs as well as the indirect costs incurred due to decreases in education and increases in criminal offenses.
Between 2010 and 2019, 102 youth clubs closed in London, leading to a total of 586 club–years unfunded. The mean annual cost per club is approximately £170,000, suggesting the direct costs amount to 586 x £170,000 = £99.6 million.
The paper estimates that youth club closures resulted in a 2.6% standard deviation decline in test scores to the average pupil. According to Hodge et al. (2021), this reduction implies an expected loss of £96,111 x 0.026 = £2,499 in lifetime earnings per pupil. 75,608 pupils lived near closed clubs in the period of analysis, implying the total forgone earnings are 75,608 x £96,111 x 0.026 = £188.9 million. Assuming each individual’s income would have been taxed at the average rate of 23.7% (OECD 2024), the reduction in test scores implies nearly £44.8 million lost to public finances in tax collection.
Finally, the rise in offending implies costs to public funds from running the criminal justice system. The average offender costs the government £8,000 according to the National Audit Office (2011). The estimates suggest that closures resulted in an 8% increase in offending. As there were 16,116 young offenders in areas and years affected, the estimated number of offenders without closures would have been approximately 14,925. The number of offenders attributable to the closures is 1,194 (14,925 x 0.08). Multiplying by £8,000 yields costs above £9.5 million.
Thus, the net cost to the government to not close the clubs is £99.6 million – £44.8 million – £9.5 million = £45.3 million.
Willingness to Pay
The paper does not calculate any direct willingness to pay for the youth clubs. The willingness to pay is calculated based on forgone returns to individuals’ education and the costs of both violent and acquisitive crime on victims.
The paper estimates that youth club closures resulted in a 2.6% standard deviation decline in test scores to the average pupil. According to Hodge et al. (2021), this reduction implies an expected loss of £96,111 x 0.026 = £2,499 in lifetime earnings per pupil. Given that 75,608 pupils lived near closed clubs in the period of analysis, the total forgone earnings are 75,608 x £96,111 x 0.026 = £188.9 million. Assuming each individual’s income would have been taxed at the average rate of 23.7% (OECD 2024), the reduction in test scores implies nearly (1-0.237) x £188.9 = £144.4 million lost in individuals’ returns to education.
Heeks et al. (2018) estimate that each violent incident costs approximately £11,446 in crime prevention, property damage, health services, physical and emotional harm, lost output and victim support. The paper estimates an 8.3% increase in violent crime rates in affected areas. Given that 5,127 violent crimes were detected in the affected areas post-treatment, the paper estimates that there would have been about 393 fewer violent crimes if the youth clubs had not closed. This implies more than £4 million in costs to violent crime victims (393 x £11,446). Beyond these detected crimes, there are likely additional offenses (undetected crimes) where no suspect was identified that are attributable to closures. In the administrative records, the detection rate for violence is 23.5%. If the 5,127 detected violent crimes represent only 23.5% of violent crimes committed by youths, the total violent crimes attributable to closures could be 4.25 times larger (100/23.5). These total violent crimes (detected and undetected) imply costs of nearly £20 million.
The paper’s estimates indicate a 16.7% increase in acquisitive crimes. Given that 7,210 acquisitive crimes were detected in the affected areas post-treatment, there were approximately 1,032 acquisitive crimes attributable to youth club closures. This has an estimated cost to the victims of about £4 million using the average cost for acquisitive crimes of £4,093 from Heeks et al. (2018). For acquisitive crimes, detection rates are as low as 9.1%. Assuming the observed crimes are 9.1% of the total, the actual cost to victims of acquisitive crimes are estimated at about £46 million.
Summing the costs to individuals from education, violent crime, and acquisitive crime we get a total willingness to pay to not close youth clubs of £144.2 million + £19.1 million + £46.4 million =£209.7 million.
MVPF Summary
The MVPF of raising revenue by cutting funding to youth clubs in London is £209.7 million/ £45.3 million = 4.63.
Because this was a revenue-raising policy, this value should be interpreted as $1 of revenue raised (saved) imposes a welfare cost of $4.6 on individuals and youth.
References
Heeks, Matthew, Sasha Reed, Mariam Tafsiri, Stuart Prince (2018). “The Economic and Social Costs of Crime: Second Edition.” Technical Report, Home Office Research Report RR99. https://assets.publishing.service.gov.uk/media/5b684f22e5274a14f45342c9/the-economic-and-social-costs-of-crime-horr99.pdf.
Hodge, Louis, Allan Little, Matthew Weldon (2021). “GCSE Attainment and Lifetime Earnings.” Technical Report, Department for Education. https://assets.publishing.service.gov.uk/media/60c36f0cd3bf7f4bd11a2326/GCSE_Attainment_and_Lifetime_Earnings_PDF3A.pdf.
National Audit Office (2011). “Cost of a Cohort of Young Offenders.” Technical report, Ministry of Justice. https://www.nao.org.uk/wp-content/uploads/2010/12/1011663_technical_paper.pdf.
OECD (2024). “Taxing wages – the United Kingdom.” Technical Report. https://www.oecd.org/content/dam/oecd/en/topics/policy-issues/tax-policy/taxing-wages-united-kingdom.pdf
Villa, Carmen (2024). “The Effects of Youth Clubs on Education and Crime.” IFS Working Paper. https://ifs.org.uk/sites/default/files/2024-11/WP202451-The-effects-of-youth-clubs-on-education-and-crime_1.pdf.
Policy Features
- Category
- Education
- Sub-Category
- Child Education
- Beneficiary Type(s)
- Children and Youth, Secondary school enrollees
- Average Age
- 15
- Country of Implementation
- United Kingdom
- Year of Implementation
- 2010
- Empirical Method
- Difference in Differences
- Research Type
- Primary
- Peer Reviewed
- No