SCIE media statement

Judging cost effectiveness - Economic evaluation in social care

7 December 2011

In the current economic climate, achieving value-for-money in the provision of social care is more important than ever. With limited resources it’s important to ensure the best possible outcomes are achieved.

Today sees the launch of a report by the Social Care Institute for Excellence, setting out its approach to assessing the cost effectiveness of social care services.

Social care and economic evaluation – the challenge

There is a much stronger tradition of judging health care in this way than there is in social care. For instance, the National Institute for Health and Clinical Excellence (NICE) uses economic evaluation techniques to inform decision making about the use of health technologies.

In social care, measuring what someone gains from a service can often be more complex. A good outcome might be that the person using the service feels they had choice and control over their support, or that the support was delivered in a way that maintained their dignity. It can be difficult to measure this kind of gain. In SCIE’s view, the people using social care must be central to defining and assessing the benefits of a service.

Identifying the costs of a social care service or intervention can also be challenging. There are a range and mix of funding streams, plus, investment by one sector or organisation can often result in savings to another. Unpaid, ‘informal’ care also plays a large part in the provision of social care; it is certainly not a ‘zero cost’ substitute for formal care. In SCIE’s view the value of the care provided by family members and friends should be calculated and included in an analysis of costs and benefits in order to get a true picture of cost effectiveness.

SCIE’s Director of Adult Services, David Walden, says:

There’s a lot of pressure for local authorities to make efficiency savings, but an efficient use of resources does not simply mean cutting costs. Achieving real ‘value for money’ means maximising outcomes for people at affordable cost. Therefore we need to judge what is cost effective in social care support. To do this well we have to use analytic  methods that are appropriate to the organisation and funding of social care.

Investing to save

One way in which local authorities can cut expenditure is by investing in and improving, preventative services, either to maintain people’s well-being or reduce or delay the need for ongoing support. Councils and the NHS need to invest in ‘upstream’ services, which have the potential to make ‘downstream’ savings.

One example of an ‘upstream’ service is reablement. Evidence from research and practice suggests that reablement is effective in reducing service costs through improving people’s outcomes and preventing, reducing or delaying the need for ongoing health and social care. When researchers formally analysed the costs and benefits of reablement they found a high probability that as well as improving outcomes, the service is cost effective.


Policy context

The Dilnot Commission on Funding of Care and Support concluded in July 2011 that the current funding system is in urgent need of reform: it is hard to understand, often unfair and unsustainable. People are left exposed to potentially catastrophic care costs with no way to protect themselves. The Commission made some proposals that would cost the State around £1.7billion.

Media contact

Steve Palmer | Press and Public Affairs Manager | Tel: 020 7766 7419 | Mob: 07739 458 192 | Email: