We’ve all noticed increasing financial pressures in the shops, in our bills, and in all aspects of life over the past few years. It can often feel like every time we tune in to the news there is some worrying new financial development that faces our households.
These financial pressures are also very much present within the public sector. It is well known that demand for public sector services is highest in areas of deprivation, as evidenced by the Government’s Index of Multiple Deprivation (IMD) which calculates this using data on service outcomes and demand. The Health Foundation reports that men in the least deprived areas have a life expectancy 9.7 years longer than in the most deprived areas of the country. For women, that gap is 8 years. This is just looking at one metric. When expanded out to healthy life expectancy – the number of years a person can expect to live in good health – the difference is even more stark. The Health Foundation reported that men in the most deprived areas live 18.8 fewer years of healthy life compared to those in the least deprived areas and for women, this gap is 18.2 years.
It's not just life expectancy that’s impacted. Academic studies have shown that deprivation is associated with adults’ and childrens’ social care too. In fact, the experience of deprivation is a key driver of service demand in the public sector.
What does that have to do with the Cost of Living? Well, we know that income influences deprivation, forming one of the IMD’s domains. Those domains are often used in making strategic decisions about where resources should be focused to best serve our residents. But whilst the IMD is a fantastic resource, it’s released only every four or five years. The last one was released in 2019 and since then we’ve had a pandemic and inflation reaching 10%, with the economic outlook still very uncertain.
That is why we sought to produce a Cost-of-Living Index. We use publicly available data to estimate the impact of the Cost of Living on households in areas across Essex using a Bayesian regression approach known as Multi-Level Regression with Post-Stratification. That gives us figures at each yearly quarter, in low geographical areas, for seven Cost-of-Living domains that cover the broad expenditure areas a household could face. The higher the score for that domain, the greater the likely impact of the Cost-of-Living on households in that area.
What can we use that for?
If we can get a view of how the Cost-of-Living is impacting areas of Essex in different ways, we can better match limited resources to communities with the greatest need. We can also anticipate service demand with more accuracy, supporting residents earlier to help prevent, reduce or delay the need for more intensive services, benefiting our residents by helping them to live independent lives for longer. Currently, we’re investigating whether the Cost-of-Living impacts health outcomes using linked health and care datasets. With that, we are exploring whether certain interventions will mitigate those impacts so that we can build a solid evidence base for preventative action. Keep an eye out for a future blog in which we will talk through the impact of using the Cost-of-Living Index.
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