Policy Brief: Unit Cost Databases

EVPA’s Policy Brief series aims at explaining recent policies and regulations that have implications for the VP/SI sector, outlining their functioning and their impact, and proposing the way forward.

In this brief, we define Unit Cost Database (UCD) and explain how useful they are for social investment in the public sector. We look at their benefits and challenges, and give some examples of from the UK, Portugal and Australia.

A Unit Cost Database (UCD) gathers a set of estimated unitary costs in areas such as health, education, housing, and social services. They are particularly relevant when delivering public services through outcome-based mechanisms, as the estimated costs can be used as references to price outcomes. Unit Cost Databases are therefore strongly linked to social investment and social innovation strategies in the public sector.

• They help standardise, simplify and aggregate data in a public and accessible place.
• They also show how different social problems absorb public resources, helping the government prioritise and keep the focus on outcomes.
• They help foster a culture of data-driven policy making for governments when setting up Social Impact Bonds or Outcomes Funds