<p>There is increasing pressure to devise a means of reflecting the outputs of social care in ways that can be used to reflect changes in productivity and efficiency. Professor Sir Tony Atkinson led a review for the Office for National Statistics (ONS) on the future development of government output, productivity and associated price indices (Atkinson, 2005). The review followed Eurostat guidance that countries should be developing direct measures of government services that are individually consumed. As part of this review and with the longer-term objective of improving measurement and understanding of PSS output and productivity in social care, the Department of Health funded work to develop new measures of personal social services (PSS) output and productivity, reflecting best available practice. This paper reports on the results of this work. <p><p><p>An extensive search of the literature (Netten et al., 2005a) identified little theoretical discussion or empirical evidence in the field of measuring productivity and outputs of social care services. Most of the evidence was limited to evaluations of cost effectiveness of specific interventions or services for particular client groups. While valuable in their own right such studies do not address the central question of how to measure government output in social care services across client groups in a way that could be used to monitor changes in productivity over time. <p><p><p>The first stage of the work was to develop a theoretically based approach and to identify how it might be applied (at least to some extent) using existing sources of data. The second stage (which we report on here) is to illustrate the application of the approach for measuring for National Accounts purposes outputs and services for older people using routine statistical sources and drawing on data collected as part of a study conducted to inform the Formula Spending Share (Darton et al., 2005). We start by describing the overall approach to the welfare index and then in turn discuss the methodology and basis for estimating core components of this index: Capacity for Benefit and quality. In section 5 we illustrate the application of the approach to activity data in estimating outputs and changes in levels of output over time. Finally we discuss some of the issues raised by the application including the wider potential of the approach and data requirements if such an approach were to be used in the future for National Accounts
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