Modelling needs-based personal budgets

A fundamental question for social policy is how accurately costs can be predicted from individual needs and characteristics.

In the UK this question has added salience due to recent policy reforms: the Care Bill 2013 (HM Government, 2013) obliges local councils to offer users of social care ‘personal budgets’ that enable them to tailor the support they receive to their personal goals and circumstances more precisely than has traditionally been the case. In order for this to work in practice, a method is needed with which to determine the level of funding to be made available to any individual with a given set of needs.

Resource allocation systems based upon measures of need are one widely adopted approach to estimating the cost of the individual service user’s care package in a manner directly proport ionate to individual need.

However, some recent studies have questioned the feasibility and utility of such systems, arguing that the relationship between needs and costs cannot be modelled with sufficient accuracy to provide a useful guide to individual allocation.

In contrast, this paper presents three studies demonstrating that this is possible. It is argued that the ability to accurately predict costs from needs both supports personalisation and has wider policy applications.