Mental health care in London: costs

The costing element of this study set out to establish the cost implications of existing mental health service provision in London, and to compare these derived costs to the costs associated with predicted service requirements. Rather than attempting to break down the budgetary allocations of mental health purchasers and providers, we employed a 'bottom-up' approach to service costing. The methodology that we employed was to use the best available estimates of service activity in each locality, to which we applied unit costs. For inpatient and residential mental health services, we used the PRiSM survey of London boroughs to estimate current service activity and the Mental Illness Needs Index (MM) to estimate predicted service requirements (both described in detail in Chapter 7 of this report). For day and community mental health services, estimates of locality-specific levels of (current and predicted) provision were unavailable. We therefore attached unit cost estimates to an indicative range of alternative service configurations. With respect to inpatient hospital and residential care, we find: total costs associated with current service activity (as measured by the PRiSM survey) across all London boroughsamounts to £315 million. A further £20 million is estimated for some missing service activity data for medium secure beds and residential places, giving an adjusted total of £335 million. By comparison, total costs associated with predicted service requirements (as measured by MM) reach an estimated £391 million. Consequently, the costs associated with current inpatient and residential provision are £56 million less than those associated with predicted service requirements. This negative differential indicates large-scale underprovision, and is particularly apparent in inner London boroughs (nine out of 13 boroughs are estimated on this basis to have negative differentials, seven in excess of £2.5 million per annum). Over and above inpatient hospital and residential care, there are additional elements of a comprehensive mental healthservice (including day hospital and day care services, sheltered employment/work schemes and community mental health teanis). The total costs of these day and community inental health care services are not known, due to lack of data. This means we cannot establish any possible differential in these areas. However, the potential costs of these services are estimated to be between £136-267 million. These are unsubstantiated (and therefore uncertain) range estimates, but demonstrate the very considerable cost implications of providing a comprehensive range of inental health services throughout the capital