The economic argument for community care

Is it possible to get value for money when investing in community care? That was the question discussed at the “Economics of Community Care’ plenary session of the European Social Services Conference organised by the European Social Network (ESN) on 30 June and 1 July 2021. Martin Knapp, Professor of Social Policy, London School of Economics, and Fredrik Jurdell, Director of Social Services in Stockholm provided insights from economic research and practical implementation.

It’s not about cost savings, but the best care for people

“When discussing the economic argument for community care, we need to make sure its about cost-effectiveness and not about cost saving” underlined Martin Knapp. He pointed out that community care can be very effective in meeting the needs of people using services. Ensuring a good quality of life for people using care services should be the outcome against which the return of investment in community care should be assessed, he stressed. Tacking stock of his more than 20 years of research on the topic, Mr Knapp made clear that while high quality community care may sometimes cost more that institutional care, this investment could lead to major quality improvements in the lives of people using social services and support their social inclusion.

Making the case for a more integrated approach to funding community care

Drawing on his analysis of the economic benefits of deinstitutionalising care services for people with mental health issues, Martin Knapp concluded that the positive effects on users’ wellbeing could lead to savings in public social security spending more broadly. For example, the improvement in their wellbeing can lead to an increase in employment, hence an tax revenue. He underscored this assessment with a quote from a user of community-based services for people with mental health issues: “I don’t care about hearing voices; I care about having a job.” Eventual savings made by other public services may be reallocated to community care services through interagency agreements, such agreements have already been implemented in England, he said.

Learning from a community care frontrunner

“Today in Sweden, we have no large-scale institutions left, but our journey has been long”, explained Frederik Jurdell. The first critical discussions about care institutions for people with disabilities took place in the 1960s, but it took several decades until the last large institutions in Sweden were closed, Mr Jurdell explained. Major steps forward were for example the reforms of the older people and psychiatry acts in the 1990s, as they set the basis for a community-based care system for these populations, in which responsibilities for health and social care were decentralised to the regions and local authorities. “The transition of taxing from national to local level was crucial for the success of those reforms”, Jurdell said, making it clear that “every new legislation should be followed by a clear financing system.”

To ensure access to community care, the City of Stockholm has issued clear guidance for care settings. For instance, residential care arrangements should be in group accommodation or housing of maximum 5 or 6 people, living in connected, but separate flats. The flats must be in ordinary residential areas and with specialised care staff available 24 hours a day.

Reinstating the argument for community care

Thirty years on from initial reforms of community care in Europe it may be the right time to remake the argument in support of it, agreed Martin Knapp and Fredrik Jurdell in their final statements. Developments such as care integration, enabling new cross-budgetary funding and digitalisation can lead to an even stronger role for community care. ESN promotes rebalancing investment towards prevention and care in the community, supporting people to stay in their homes for as long as possible, and where it is not possible in community-based facilities as stated in ESN’s latest Report on Putting Quality First, published earlier this year.


ESN (2021) Putting Quality First – Contracting for Long-Term Care