Addicts and alcoholics cost the public £10 billion a year.
Research estimated that public expenditure on people who are homeless, offenders, and/or drug misusers is roughly £10 billion a year in England. So it's not just an estimate of the cost of alcohol and drug addiction. The research describes that estimate as "indicative and not definitive", and says it's likely to be a conservative estimate.
“Addicts and alcoholics cost us £10 billion a year, says Duncan Smith”
Daily Mail, 12 January 2016
A few readers asked us to look into this claim. The Mail linked the figure to a new “blitz” to help people with these problems to find work.
The figure is a rough estimate of the public cost of people who are homeless, offenders or drug misusers—or any combination of the three. So it’s not just about people with drug or alcohol problems. The start of the Mail’s article alludes to this by referring to “people with drink, drug and other problems”.
The research it’s based on describes the cost estimate as “indicative and not definitive” and says it should be taken as a guide. The researchers say it’s likely to be a conservative estimate.
The £10 billion is based on the cost of providing support such as benefits, support workers, substance treatment, hostels and other services; the cost of time in institutions such as prisons or psychiatric hospitals; the cost of NHS treatments; and other costs such as those to local authorities for rough sleeping.
People who are homeless, offenders and/or substance misusers
The research behind this figure, published by the Lankelly Chase Foundation, sought to estimate the number of people experiencing “severe and multiple disadvantage” in England and how much they are costing public services. It defined severe and multiple disadvantage as people “experiencing” at least one of the following: homelessness, offending and substance misuse.
Around 586,000 people were estimated to have come into contact with services for at least one of these three problems in England over the course of 2010/11. Of these, 364,000 experienced one, 164,000 experienced two and around 58,000 experienced all three.
Time spent in the criminal justice system and in health services contribute to largest costs
Public expenditure on people with these severe and multiple disadvantages is around £10.1 billion a year, according to the report.
One of our readers asked us whether this cost was counting only benefits spending. It isn’t. Among the largest costs for these people is from the time they spend in the criminal justice system and in health services, the authors told us. The report doesn’t offer a breakdown of areas of spending within the £10 billion, though.
In terms of benefit-related expenditure, the figure counts spending on out-of-work benefits and housing benefit, but not on additional disability-related benefits. For the group with all three problems, nearly half reported having a limiting long term illness or disability.
The Work and Pensions Secretary is quoted in the article as saying that people with these problems have been “written off to a life on benefits” and that the government is seeking to put an end to this by offering them support to get into work. The authors of the research told us that seeking to reduce the number of problems these people face is a more realistic focus than seeking to get them into work.
Cost estimate is indicative and not definitive
The report gives various reasons why the cost estimate is a rough one.
For one, it says the survey data used to compile the cost estimates is focused on people with especially complex problems. This means they are likely to have higher costs. But it also says this group may have lower costs because more of them, such as those who are rough sleepers, aren’t receiving the services they need. So this could push the figure up or down.
Secondly, the researchers didn’t have a record of each person’s separate time in institutions or services over the space of one year. They’ve had to combine data from different points in time to get an estimate of costs for those institutions and services over a one-year period.
Lastly, they state that the estimates for the cost of various services are “somewhat crude, and do rest on a lot of assumptions”.
Still, the authors had reason to think that the £10.1 billion estimate is a “conservative” figure. For example, it doesn’t include the costs of ‘missed appointments’ in the NHS which they say at least one other study found were significant.