Modelling the relationship between needs and costs: how accurate resource allocation can deliver personal budgets and personalisation

Resource allocation systems based upon measures of need are one widely adopted approach to estimating the cost of the individual service user's care package in a manner directly proportionate to individual need.

However, some recent studies have questioned the feasibility and utility of such systems, arguing that the relationship between needs and costs cannot be modelled with sufficient accuracy to provide a useful guide to individual allocation. In contrast, this paper presents three studies demonstrating that this is possible.

It is argued that the ability to accurately predict costs from needs both supports personalisation and has wider policy applications.