Background Information

Careleavers - A Financial Timebomb

The financial costs of the care-leavers crisis are staggering. For example, government figures state that the cost of the average problem drug user to the nation is over £45,000 each. 1,300 teenagers each year leave the care system with drug addiction problems. Some of the quantifiable costs to the nation are detailed below:

	6,500 care-leavers in the UK each year	Cost	Compared to 6,500 general population	Cost
Health Service & Criminal Justice costs of drug addiction	20% (1,300 people) have a drug addiction problem Of these, 39% (507 people) are "problem users" *1	£23.3M	0.56% (37 people) are "problem users" *6	£1.7M
Likelihood of being in prison and associated costs	13% (676 people) of the remaining 5,200 care-leavers *2	£24.3M	0.11% (6 people)	£0.2M
Court proceedings costs (including CPS & legal aid cost)	13% (676 people) imprisoned NB This does not include non-custodial sentences - data not found *3	£12.5M	0.11% (6 people)	£0.1M
Police costs	13% (676 people) imprisoned NB This does not include non-custodial sentences - data not found *4	£5.1M	0.11% (6 people)	£0.04M
Benefit costs	50% (2,912 people) of the remaining 5,824 not in prison leave care unemployed Assumption - the figure reduces to 35% by end year 1 (no data to substantiate) *5	£9.8M	5% claim unemployment/job seekers allowance (325 people) 6.3% claim housing benefit (410 people) *7	£1.8M
TOTAL COSTS		£75M		£3.8M

* Sources below:

20% of care-leavers have drug problem - Maranatha fact file (available on request).

Home Office study 249:
Most cost will be incurred by "problem users" accounting for 39% of young users.
The average social cost to central government of each problem user is £35,455 per user pa
The average economic and reactive cost to central government of each problem user is £10,402 per user pa
TOTAL CENTRAL GOVERNMENT COST = £45,858 per user pa

39% of 1,300 = 507 people x £45,858 = £23.25M
Home office national statistics:
Cost per prisoner pa = £35,939
Total prison population 74,182
11,089 prisoners under 21 years of age

Maranatha fact file:
23% of adult prisoners have been in care (ie 13,193 people)
38% of under 21 year old prisoners have been in care (ie 4,214 people)

Assuming 6,500 care-leavers leave aged 16
a further 6,500 the previous year, now aged 17
a further 6,500 the previous year, now aged 18
a further 6,500 the previous year, now aged 19
a further 6,500 the previous year, now aged 20
Total 32,500 under 21 year olds have been in care
Of these, 4,214 are in prison (13%)

13% of 5,200 people = 676 people x £35,939 = £24.3M
Home Office Research Findings no 103
http://www.homeoffice.gov.uk/rds/pdfs/r103.pdf

KEY POINTS
The average cost of a prison sentence imposed at a magistrates’ court is £4,950.
The average cost of a prison sentence imposed at the Crown Court is £30,500.
(Figures include costs to all criminal justice agencies, such as the Legal Aid Board and Crown Prosecution S e r v i c e . )

Total no. of (indictable) convictions at magistrates courts 503,000
Total no. of (indictable) convictions at crown court 566,000

On average 503/(503 + 566) x 676 (ie 318 people) care leavers are likely to have been convicted in a magistrates court, at a cost of 318 x £4,950 = £1.6M

On average the remaining 358 care-leavers (676 - 318) are likely to have been convicted in a crown court, at a cost of 358 x £30,500 = £10.9M
Therefore total court cost = £10.9M + £1.6M = £12.5M
1,069,000 successful convictions against indictable offences pa.
Total spend on the Police = £8Billion
Therefore the cost per arrest and successful conviction = £7,484
676 people x £7,484 = £5.1M
Based on £32.90 job seekers allowance and £43.25 housing benefit Total £76.15 per week

Assumption that over the course of the first 12 months out of care, the figure reduces to 35% (Average first year therefore 42.5% ie 2475 care-leaver claimants

2475 x £76.15 x 52 weeks = £9.8M
Home Office study 249
medium estimate 337,350 of the total population are "problem users"
Just under 1million (5% of working population) claim unemployment benefit in the UK.
http://www.statistics.gov.uk/cci/nugget.asp?id=165
Assumption - average £32.90 per person
5% of 6,500 = 325 people from general public claim unemployment benefit costing 325 x £32.90 x 52 weeks = £0.56M

3.8million (6.3% of general population) claim housing benefit in the UK.
http://www.dwp.gov.uk/asd/asd1/stats_summary/Stats_summary_sept03.pdf
Average £56 per person
6.3% of 6,500 = 410 people from general public claim housing benefit costing 410 x £56 X 52 weeks = £1.2M

Total benefit cost = £0.56M + £1.2M = £1.76

A social & financial timebomb