ESSENCE economic evaluation

How economic evidence can help us navigate tightening social care budgets

 By Annette Bauer and Helen Weatherly


In the UK’s current context of tightening budgets, austerity and increased pressure to make social care systems as efficient as possible with limited resources, evidence-informed decision-making is more important than ever. A recent webinar hosted by the Care Policy and Evaluation Centre (CPEC), based at the London School of Economics and Political Science (LSE) focused on how economic evidence can be used to ensure social care decisions are as efficient as possible. The 19 February webinar brought academic, policy and practice perspectives in conversation with each other, and featured the Economics of Social Care Compendium (ESSENCE) project funded by the NIHR School for Social Care Research (NIHR SSCR).  

What are the main economic issues in social care?

A functional social care system should meet the needs of the people it serves – people with social care needs and their carers – in ways that are fair and equitable. This includes ensuring that the person’s rights, dignity and preferences are considered and respected, and that they are protected from harm. Overall, a good social care system contributes to a society in which people live as long as possible and as well as possible.

As Martin Knapp, Professor of Health and Social Care Policy, CPEC at LSE, explained during the webinar, to achieve this kind of system in a context where resources are scarce, resources need to be used efficiently, affordably and sustainably over the long-term. This means that services need to not only fulfil societal needs and function at a high quality, but also do so on very stretched resources – in the current economic climate, value for money is key. This often means making difficult decisions to promote cost-savings, and weighing up whether the benefits to social care systems and society as a whole justify the costs of achieving them.

How can economic evidence be useful and what are the challenges?

In order to make informed decisions about what is, in fact, cost-effective when it comes to social care systems, economic evidence can provide useful insights into what will work best, and how to maximise the resources available. An example of this discussed at the webinar was from Peter Moore, Health and Housing Project Manager at Oxford City Council. He spoke of the role that an investment case developed by CPEC played in making a council-level decision about a stepped-down service for supporting people experiencing homelessness. The investment case found the service to be highly cost-effective. It helped local councils ensure people are placed within county lines, and helped people out of mental health wards. Costs to the NHS, housing, and criminal justice sectors were reduced. Having a quantifiable economic value placed on those benefits meant that commissioners were convinced of the importance of the service and provided additional funding.

Another tangible example of how economic evidence can add to rights-based motivations in the charity sector was presented by Adam Micklethwaite, Director of the Autism Alliance. When it comes to people on the autism spectrum, the costs of not investing in better policies are substantial. Providing support to people early on from childhood is likely to have important impacts on a society’s productivity and lead to fewer people being reliant on statutory benefits – this involves early prevention-focused support which enables individuals to utilise their unique professional skill sets to contribute positively to society. This type of support has been shown to reduce the need for more costly services when crises occur, thereby reducing the costs to the NHS and social care in the long run.

Across these and other examples, speakers reflected that if appropriate economic evidence is presented across budgets, sectors, or systems, covering long time periods, it can inform wider system changes. Integrated Care Boards and government agencies responsible for funding social care systems are key target audiences for such economic evidence.

However, there are barriers to uptake of economic evidence in areas of prevention. A lot of policymaking is politically driven and most local commissioning is short-term and focused on a particular sector. Often, therefore, intensive campaigning efforts were required to achieve change. This was the case with Real Change for Autistic People.

How can the ESSENCE toolkit help?

The ESSENCE project is a free, online resource that collects, synthesises and disseminates economic evidence in social care. As Magdalena Walbaum and Shari Jadoolal at CPEC explained, ESSENCE collates a wide range of documents related to economic evidence in adult and children’s social care, as well as case summaries of economic evidence for different types of interventions and populations. Each summary presents what is known about whether the intervention works, what people say about it, whether it is cost-effective, the strength of the evidence and implementation implications. The ESSENCE project is developed in consultation with an advisory group of people who use economic evidence, making sure its contents are relevant and the design is accessible. The project also links up with national projects such as What Works for Children’s Social Care, and regularly updates data sources to ensure relevance.

How has ESSENCE been useful so far?

Many of the case summaries on ESSENCE present economic evidence that informed changes in policy and practice. For example, economic analysis by CPEC in collaboration King’s College London and larger partnerships demonstrated that specialist step-down beds for people experiencing homelessness are a more cost-effective Out-of-Hospital Care Model (OOHCM) than standard care. As Michela Tinelli explained, this analysis informed NICE guideline as well as national Department of Health and Social Care (DHSC) programme on OOHCMs. Findings from the evaluation of the implementation of the programme on OOHCMs confirmed the effectiveness and cost-effectiveness of step-down service as presented by Peter Moore.

What are other useful resources?

Knowledge translation requires good communication and collaboration. In this light, Helen Weatherly (Professor, Centre for Health Economics, the University of York) highlighted the value of networks such as the Social Care Economics Network (SCENE) which uses economics as a framework to support decision-making in social care. SCENE network members meet up  every four months to discuss and share insights about the social care sector and how to use economics in theory and practice to support social care. If you would like to join the network, please email Helen and Magdalena at and

While it is becoming increasingly difficult to bolster social care systems – given limited resources, conflicting schools of thought, and a barrage of available information – economic insights can help with navigating this complex terrain. Access to relevant and digestible evidence, which the ESSENCE project provides, is useful ensuring decisions translate into implementation of cost-effective services. Moreover, staying connected to others grappling with similar challenges can also empower those working in social care to continue to make the most of the resources currently available.