Deprivation
The effect of both of these factors will be net neutral through disaggregation, and will not have an absolute impact on care costs across a county area. However, this will add an additional factor of variation to unit costs in newly formed local authorities. This will be somewhat similar in nature to the variation in demand analysed through Section 4.
Figure 21, below, shows the relationship between the index of multiple deprivation and unit cost of care. It demonstrates that the greater the level of deprivation, the lower the expected unit cost of care. For every additional two IMD points, the unit cost of care reduces by 2%, if all other variables remain fixed. This will be partly influenced by an increase in demand for state-funded adult social care in more deprived areas, giving the local authority greater purchasing power as well as the potential for lower wages for a local workforce.
Figure 21: Impact of deprivation on unit cost of care
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