The Cost of Troubled Families Report
By the Department for Communities and Local Government, The Troubled Families Team Jan 2013
See full report
This report makes the case for all local agencies (local authorities, the police, health services and others) to examine what they spend on troubled families, how they spend it, and how effective that expenditure is in helping turn lives around and preventing the emergence of future troubled families.
Public services cannot afford to spend their resources ineffectively when reacting to the social problems of these families. With the economic challenges that the country currently faces there is an even more powerful impetus to ensure this is not the case.
Of course there is a huge human cost of failing to intervene effectively with troubled families – and this has been set out in the two previous reports from the Troubled Families Team. However the financial costs are also important to understand and evaluate.
We spend disproportionately more on troubled families than the 'average' family. For example, in West Cheshire, the council is spending an average of £7,795 on an average family in its area, compared to £76,190 for a troubled family. In Solihull, local services spend an average of £5,217 on an average family, compared with £46,217 on a troubled family. The amount spent on a troubled family is estimated at nearly £100,000 in Barnet.
This is not sustainable.
Over the last few months, the Troubled Families Team has been working with approximately 207 of the 152 upper-tier local authorities, which are all considering the financial case for the Troubled Families Programme in detail. We know that many more local authorities are undertaking comparable work, but these offer a sample of some of the most advanced local areas in terms of their work on costs and benefits.
The purpose of this work was not to steer local areas down a defined view of what works best. Instead, the team has sought to understand the work that they are undertaking and to draw out common themes and learning. All of these areas have approached the challenge slightly differently and had to take account of varying degrees of local buy-in from partners and accessibility of information.
The catalyst for the work also varies from area to area; some initially kicked the work off because of a spike in a problem (such as a rise in truancy), some because of an identified failure in their services and others because of the need to create cost savings.
Despite the fact that their starting points may have been different, we have identified five common themes and an emerging process, which may help other local authorities that are either currently grappling with this challenge or looking to begin similar work. These five themes are:
Theme 1: Family costs: Building a representative catalogue of costed family case studies, demonstrating the reactive costs of these families prior to intervention and the savings which may be realised if they are turned around.
Theme 2: Nailing down the unit costs: Working with partners across the criminal justice, housing, schools, health and voluntary sectors to secure a local consensus about the actual unit costs of different interventions and activities.
Theme 3: Projecting savings: Building on better cost data, local areas are developing new and improved processes to assess the potential financial benefits of the Troubled Families Programme in their locality.
Theme 4: Making the financial case for reform of services: Focusing on inefficiencies, duplications and gaps in provision to identify how services could be redesigned to deliver better value for money and better family outcomes.
Theme 5: Securing joint investment: Where areas have a strong grasp of their local costs data and buy-in from a range of the benefiting local public bodies, they have started to form ‘joint investment agreements' – long-term funding arrangements where the benefits of better outcomes are reflected in the financial stake of different public bodies.
There is a broad consensus that the task of turning around deeply troubled families needs to be tackled in a radically different way, and is a task that can't be shied away from.
Dimming the lights is simply not enough.
– Sir Bob Kerslake, Head of the Civil Service and Permanent Secretary of the Department for Communities and Local Government
Talking about efficiency savings is just tinkering at the edges. This has to be about demand reduction to really unlock savings.
– Sir Peter Fahy, Chief Constable, Greater Manchester Police
Convincing people that the way we provide services to and spend money on troubled families is ineffective and costly is fairly easy – any cursory consideration makes this quickly self-evident.
Convincing people of the merits of more integrated, pro-active, whole-family approaches is not that hard either – there is plenty of evidence about the success of family intervention and that evidence base is growing all the time.
Convincing people to stop pursuing current ineffective and costly approaches and to invest in those that are evidenced to be more successful is, however, a tougher proposition.
To realise benefits at a worthwhile scale will often mean system reform. It will often require the decommissioning of services. It will often mean securing the buy-in – and financial contribution – of partners. And all of these factors require some sound financial analysis of what costs are being incurred by which agencies in respect of which families over what time period.
When that analysis is in place then local leaders and managers are much better equipped to take the necessary decisions – and start to reap the benefits, in both financial and social terms.