Sunday, 7 February 2016

Comparative Costs?

Last week Children’s Minister Edward Timpson was reported in Community Care as telling MPs that there is no “correlation between spend and quality” in children’s social care. According to the minister, some of the councils where the government has been forced to intervene are ‘high spending’.
Such a finding must be enormously comforting to a government hell bent on cutting every cost in sight! But I wonder on what data the minister is basing his claims. Working out comparative costs between different local authorities is not easy, because, as management accountants* tell us, it is very difficult to derive accurate costing information where a large part of an organisation’s costs are represented by overhead and where more than one type of product or service is produced.

So far as I know, the Government doesn’t publish any comparative cost information about local authority children’s services. That makes it very hard for us ordinary citizens to assess the minister’s claims. To put our minds at rest perhaps the DfE would like to publish this information, if it has it, and explain how it is calculated, so that we all have a clearer idea about exactly what Mr. Timpson is saying.

* See for example Kaplan, R.S. and Cooper, R., “Make Cost Right: Make the Right Decisions”, Harvard Business Review, September–October 1988