Cost effectiveness and efficiency study At Netherlands Red Cross

1. Overview of the program

The Netherlands Red Cross (NLRC) has branches on 6 Caribbean islands (Aruba, Bonaire, Curacao, Sint Maarten, Saba and Sint Eustatius). These branches are independent associations and part of the NLRC via cooperation agreements and focus on direct emergency aid after disasters and the provision of assistance to vulnerable groups on the islands. Aruba, Curacao and Sint Maarten are independent countries within the Kingdom of the Netherlands. In March 2020, these three countries experienced their first COVID-19 cases. The population of these countries are very dependent on tourism for their livelihoods, which has been heavily impacted by the current COVID-19 pandemic. Many people were already vulnerable and have now become even more vulnerable due to a loss of their source of income.

The COVID-19 outbreak has had a huge impact on the lives and livelihoods of the people on the islands. To support the most vulnerable people in Aruba, Curacao and Sint-Maarten with their acute food & hygiene needs, NLRC started rolling out a relief operation in May 2020 funded by the Dutch Ministry of Interior Affairs to provide assistance to vulnerable households impacted by the economic consequences of COVID-19, hereafter “RC COVID-19 Response Programme”. The main components of this relief operation are Cash (through e-voucher modality), food & hygiene parcels and ready-to-eat meals. The program supported a total of around 24.000 households (74.000 persons). It consists out of four phases and has a total budget of EUR 59.2 million.

2. Objective of the study

As humanitarian assistance increasingly shifts towards cash-based approaches, there is a concurrent demand for greater evidence demonstrating the comparative advantage of the cash modality compared to more traditional in-kind assistance. Emergent evidence has demonstrated that cash transfers are often more cost-efficient compared to other aid modalities. However, there remains limited evidence on the comparative cost-effectiveness of cash transfers, either as a standalone intervention or in combination with other programme components in a cash+ intervention. Studies on the relative cost-efficiency and cost-effectiveness of one intervention compared to another have been on the rise within the humanitarian community.[1] In a recent study UNICEF defines cost-efficiency as a measure of the outputs achieved by a given intervention compared to the resources used to implement it. Moreover, cost-effectiveness is defined as a measure of the outcomes achieved by a given intervention compared to the resources used to implement it.[2] Methodological approaches of economic analyses can provide valuable information on the relationship between resource expenditure and programme results, leading to more evidenced-based decisions on resource allocation.

The main objective of this study is to identify the cost effectiveness and cost efficiency of the (conditional) cash voucher aid as opposed to the in-kind aid provided during the COVID-19 food assistance programme in the CAS (Curacao, Aruba and St. Maarten) islands.

The findings of the study provide guidance when advocating with external parties for cash based support in humanitarian assistance and have greater CBI-capacity at the local level.

3. Main study questions

In order to achieve the main objective, we seek to explore the following questions:

• What were the costs of each modality of aid provided (ready to eat meals, food parcels, paper vouchers and e-vouchers)?

o Cost per beneficiary = total programme cost / total number of beneficiaries.

o Operational cost per beneficiary = (total programme cost – value of cash transferred to beneficiaries) / total number of beneficiaries.

o Total cost transfer ratio = total programme cost / value of cash transferred to beneficiaries.

o Cost transfer ratio = (total programme cost – value of cash transferred to beneficiaries) / value of cash transferred to beneficiaries.

• How was each modality delivered throughout the span of the programme/how well was each modality converted to the output of interest, throughout the course of the programme (12-14 month)?

o How many people were reached throughout the course of the programme through each modality (12-14 months)?

o How fast were we able to scale up the number of beneficiaries reached per modality/through e-vouchers support?

o What were the main enablers and disablers in the process of scaling up?

• To what extent were the costs of providing support through e-vouchers less than the cost of delivering paper vouchers and or in-kind aid (food parcels and ready to eat meals)?
• How do the operational costs on the CAS islands compare to the overhead costs on the CAS islands and in the Netherlands?
• What is the percentage of distributed aid out of the full programme budget.
• To what extent has the operating context significantly influenced the cost-efficiency of e-voucher programme?
• What were the advantages and challenges for beneficiaries[1], implementors and vendors of the use of the e-voucher technology?
• Compared to the number of beneficiaries reached, what was the amount of time invested in preparing and delivering:

o Ready to eat-meals

o Food parcels

o E-vouchers

• Compared to the number of beneficiaries reached, mow many HR support/FTE was needed to prepare and deliver:

o Ready to eat meals

o Food parcels

o E-vouchers

• To what extent did the cash-based response produce impact the local economy in comparison to the other two distribution methods?
• To what extent did the use of e-vouchers affect the increase of local prizes?
• What were the main differences in the products acquired through e-vouchers and the ones delivered in parcels?
• To what extent did each method selected affect the most vulnerable beneficiaries differently?

· Methodology

Both qualitative and quantitative methods will be used to be able to perform the study. As much possible, the study will draw on secondary data that is already available. Where needed, primary data can be collected.

· Deliverables

• Inception report (IR)/ Study proposal (SP)- The inception report should include the proposed methodologies, a data collection and reporting plan with identified deliverables.
• Draft final report: The researcher will produce a draft report (identifying key findings) which will be reviewed by the NLRC and the branch teams. The consultant will be given the feedback after 10 working days to incorporate into the final report. The draft report will be also shared with the relevant branches for validation.
• Final report. A Final report highlighting key findings, conclusions and recommendations will be submitted within 10 days of receiving the feedback from the draft report
• Lessons learnt presentation and one-pager: A final meeting/workshop will be held to share the key findings and recommendations. The key lessons and recommendations will be presented in a one-pager to share.

· Timeline

The review is expected to be implemented (mainly remote – homebased) between end of July and September 2021. Total duration of study: To be defined by consultant