Out-of-home day care for families living in a disadvantaged area of London: economic evaluation alongside a RCT

Children born into poverty have lifelong disadvantages compared with those more fortunate; social interventions seek to break this cycle of poverty and deprivation. Early Years Centres are one such intervention. These were established in deprived areas in the UK to provide high quality out-of-home day care. This paper reports the results of an economic evaluation conducted alongside a randomized controlled trial of one of these centres in the Borough of Hackney, London. Participants were randomized to receive either high quality day care as provided by the centre or to other child care that they secured for themselves where they chose to do so. Information on resource use (early years education and care, as well as health and social care) was collected over an 18-month period; this was valued using appropriate unit costs. The cost of education, social and health care together with the value of productivity gains and out-of-pocket costs were then compared with the effectiveness of the intervention, increased labour force participant in mothers. From the societal perspective, the value of employment outweighs the costs of health and social services used, and in both groups there are cost savings. These are greater in the intervention group, therefore Early Years day care is an efficient use of resources. However, there is a net cost to the public sector of providing the intervention. The cost of achieving an additional mother in the labour force at 18 months is 38 pound 550 (85% CI of -1273 pound, 416 pound 172). From the societal perspective, over an 18-month period, all child care is cost saving, but high quality day care provided by the Early Years Centre is a cost-effective alternative to day care provided by other local services in Hackney. The public sector, however, incurs added expense from this intervention.