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This chapter reviews the cost-effectiveness of the LMDA overall, the delivery of the EBSMs, as well as the cost-effectiveness of individual "successes."

If the LMDA is shifting costs from one part of the EI fund to another (as discussed previous), this has significant implications for the overall cost-effectiveness of the LMDA. In total, $206.2 million was spent on EBSMs (under Part II) in fiscal year 1997-98. In addition, various other costs were incurred to implement the LMDA, such as the costs of operating the Secretariat and other co-management structures, as well as in-kind costs (e.g., time) incurred by HRDC, MAETT and MHR. The extent of these costs is unknown. Restricting HRIB data to those who participated in the LMDA in 1997-98, approximately $42 million in unpaid EI ( to Part I) occurred in the short term. Long term impacts and the overall cost-effectiveness of the LMDA will be topics for the summative evaluation.

A. Program Cost-Effectiveness

Many interviewees felt that program delivery was already fairly cost-effective. However, most interviewees agreed it is always possible to become more cost-effective. For example, costs might be reduced if one government or agency delivered all EBSMs as this would eliminate the need for combined meetings and planning, etc. It would also address the problems identified regarding contracting.

It may well have been cheaper to have HRCC staff administer the programs, rather than have them administer contractors who administer the programs. Some contracts include funding for overheads, others do not. Thus, some third party service providers in the same area provide the same services without such subsidies.

Fewer contracts would reduce the contract administration effort. Longer contracts would enable contractors to negotiate better deals (e.g., for leases) and thus realize savings that could be passed on either to clients or to the EI Account.

Views regarding effectiveness vary from interviewee to interviewee. Provincial staff, for example, question the effectiveness of some EBSMs. One senior provincial representative commented that the province, based on its work with employers, does not consider TWS to be effective. HRDC representatives and employers interviewed in focus groups who had participated in TWS reported the exact opposite.

B. Costs Per Success

While individual third party service providers are able to identify their costs and identify outcomes on a client-by-client basis, and thus calculate a cost per success ratio, it appears that government cannot do the same in a reliable way, partly because of inadequate ongoing management and performance data. In addition, those interviewed generally could not identify the costs per success.