Unit Costs: Not Exactly Child’s Play

This short guide tries to make a complicated, some would say alien, accounting procedure accessible and comprehensible to a wide readership of local authority staff, researchers and trainers. The main aim has been to produce a tool kit versatile enough to cater for the multiplicity of local authority arrangements and cost demands. It should put into the hands of finance managers and policy makers a coherent method for calculating unit costs that is convincing in its relationship with the work of social services departments and the realities of children's needs.

Foreword by John Hutton MP:If we are to discover whether we are getting the best value for money from social services, we have to know their true cost. Expenditure needs to be connected directly to the needs of children and families, and the services they receive. The help they receive is usually a mixture of services varying in both amount and costs. The only way to find out the real cost is to build it up from the unit costs of the component services.

There is no escaping that finding out how much services really cost at the point of delivery is not a simple business. But I hope this guide shows that it need not be dull. It sets out to make the subject of calculating unit costs accessible by means of striking graphic design and a light touch, without losing the necessary rigour and attention to detail.

The book is intended to help managers of children’s services, particularly non-financial managers, get to grips with how unit cost are calculated. It is intended to be helpful in the final stages of this year’s Children in Need Data Collection when unit costs are applied to activity measures. In addition it is meant to be a launch pad for improvements to unit cost methodology aimed at achieving greater accuracy, consistency and comprehensiveness in future years as part of the general drive for performance measurement and best value. Although they are applied here to the way children’s services are delivered, the theory and general application will be useful in the field of adult social care also.

I hope that this handbook will prove to be accessible, instructive and a convenient source of reference for busy managers.