Blue Book 2023 will include improvements to the measurement of the volume output of adult social care services across the four UK nations.
Changes include a new cost-weighted activity measure for England for 2014 onwards and improvements to the existing cost-weighted activity measure for earlier years.
Services for which no activity data are available will be measured indirectly based on spending adjusted to remove the effects of input-cost inflation.
Improvements have also been made to the measurement of adult social care output in Scotland, and volume output measures have been included for Wales and Northern Ireland for the first time.
These changes will result in faster growth in the volume output of industries 87 (residential care activities) and 88 (social work activities without accommodation).
These changes will also result in faster growth in the volume of general government final consumption expenditure and reduce the growth in the implied deflator for this component.
As volume output measures for public services are produced independently of current price estimates, these changes do not result in a change to contribution of adult social care services to nominal GDP.
Adult social care (ASC) services provide care and support to older people, adults with learning or physical disabilities, adults with mental health problems, drug and alcohol misusers, and carers. Publicly funded ASC services are organised by local authorities in Great Britain and health and social care trusts in Northern Ireland.
ASC services include:
residential and nursing care
home care services
day care services
supported living and accommodation
"meals on wheels"
equipment and home adaptations
care assessments and support services
The volume output measure for ASC to be introduced in Blue Book 2023 is also used to measure the quantity output of ASC in our Public Service Productivity estimates. Total public service productivity has incorporated the new output measure for England since our 2020 release and the new output measures for the devolved administrations since April 2023, as shown in our Public service productivity: total, UK, 2020 article.
In the National Accounts, ASC forms part of two industry divisions under the Standard Industrial Classification system, 87 (residential care activities) and 88 (social work activities without accommodation).Back to table of contents
The new methods form the ASC component of general government final consumption expenditure (GGFCE) within GDP. GGFCE refers to public services, that is services that are publicly funded. GGFCE includes publicly funded services that are provided by both the public sector and private or third sector providers.
As public services lack a market price for valuing their output, an alternative methodology must be used to measure public service output. The approach used by the Office for National Statistics (ONS) is set out in the Atkinson Review (PDF, 1MB) and is consistent with the international guidelines, the System of National Accounts 2008 and European System of Accounts 2010.
For current price estimates, the output of non-market services is valued at the sum of the total costs of production. Note the changes reported in this article do not result in any changes to current price estimates of GDP.
For volume estimates, the approach to the measurement of the growth of non-market services over time depends on the available data.
Where the requisite data are available, the methodology preferred in the aforementioned guidance is known as the direct volume output or cost-weighted activity approach. This involves stratifying the activity of public services by type of service, measuring the growth in activity for each type of service and then producing an overall growth index for the service by weighting together each of the individual activity growth rates by their cost. As a result of weighting activities by their costs, an increase of one unit of activity for a high-cost activity has a greater effect on the output than an increase of one unit of activity for a low-cost activity.
The cost-weighted activity measure is typically produced using the Laspeyres index approach, where the unit costs used for weighting different activity types are those taken from the first year of each activity pair. Because ASC includes activity that is partly publicly funded and partly client funded, and only the publicly funded part is measured using the direct volume output approach, the cost-weighted activity calculation is adjusted to scale activity by the proportion that is publicly funded (p). The formula used for the cost-weighted activity index for ASC is therefore:
L = index value
p = proportion of expenditure publicly funded
a = activity count
u = unit cost
t = year
i = activity type
For non-market services where no activity data are available, alternative methodologies may be employed to measure output growth. The main alternative methodology is the indirect volume output approach based on growth in the volume of inputs. This may be measured using growth in deflated expenditure, and makes the assumption that the volume of output growth equals the volume of inputs growth.Back to table of contents
Office for National Statistics (ONS), released 01 September 2023, ONS website, methodology, Improvements to non-market adult social care output in the National Accounts
Contact details for this Methodology
Telephone: 01633 455323