The health service spent £2 billion on services for people with psychosis in 2012/13. Over half (54%) of this total was devoted to inpatient care. This means that spending is currently skewed towards the more expensive parts of the system, at £350 average cost per day for inpatient care compared with £13 per day in some community settings. There is a strong business case for investing in the early intervention and community-based interventions proven to generate savings or value-for-money gains through reduced inpatient admission, or through other routes. This report provides the most up-to-date economic evidence to support the business case for investment in effective, recovery-focused services. Drawing on a wide range of data, evidence for the cost-effectiveness of recovery-focused interventions is set out.