Public Service and Demographic Change

23 April 2013

This event is kindly supported by Joseph Rowntree Foundation#readyforageing

Welcome

Baroness Sally Greengross

Chief ExecutiveILC-UK

This event is kindly supported by Joseph Rowntree Foundation#readyforageing

Lord Geoffrey FilkinChair

House of Lords Public Service andDemographic Change committee

Ready for Ageing?

This event is kindly supported by Joseph Rowntree Foundation#readyforageing

Ready for Ageing?

Lord Geoffrey FilkinChair, House of Lords Public Service and Demographic

Change committee

Ready for Ageing?“Government is woefully underprepared for ageing…which will have a huge impact on our society and public services”

1.Opportunity and Challenge

2.How to support a longer life

3.Living Independently and Well

4.Fairness

5.Government and Political Parties

1. Opportunity and Challenge

Progress – a success and an opportunity

Two big and certain social changes will affect us all:• Much longer lives - 50% of girls born now will live more

than 97 years • Many more older people - see below:

Increase 2011 to 2021 Increase 2010 to 2030

65+ 24% 51%

85+ 39% 101%

Major challenges to individuals, communities and attitudes

Perhaps the biggest public policy challenge we face

We looked ahead, to next decade, 2020 to 2030

Rapid, cross party holistic review - the first

We should expect such an analysis by Government

2. How to support a longer life

Many people are unaware, unprepared, underfunded

Trusted information needed

Three priorities for action:I. Longer workingII. Pension reformIII. Equity release

What is government doing to address these issues?

I. Longer working

Rises in the State pension age were right and will continue

So later working will be necessary for many

There are many benefits

This needs public debate and actions to make it possible:

- End cliff edge retirement to allow winding down- Abandon fixed age retirement- Challenge employers to change- Help re-skilling- Change incentives to retire early

II. Reformed pensions

- A serious pension and savings problem already

- Compounded by denial and justified scepticism

- UK’s pension policy is unusual – neither compulsory pensions nor savings

- Flight of employers from DB and pensions wherever they can

- Pension position of many will be much worse than in past

- A longer life exposes the gaps and increases our risks

- Single tier pension is progress

- Auto-enrolment will at best generate a pension worth only 8% of salary

- So many risk finding themselves much worse off than expected

- Defined contribution pensions are a broken product

- Has to be addressed

III. Equity release

Many have substantial assets which may need to be used

Property wealth – prudence and thrift – or windfall gains?

Cannot expect others to pay to keep them sacrosanct

Moving house – one way to release

Equity release should be simple, safe and fair – it’s not

Needed to fund social care, adaptations and income support

Government and financial services must deliver this

3. Living Independently and Well

Living independently and well is what most hope for

Four big challenges from an ageing society:

• Increased demand for care

• Increased costs of care

• A radically different care model is needed

• Housing supply and services to support independence

Has government assessed and addressed these?

i. Increased demandWe did not find a DoH analysis of this

Many more older people with longer lives and long term illnesses

Predicted increases from 2010 to 2030 for people aged 65+- 45% more with diabetes - 50% more with arthritis, CHD and stroke- 80% more with dementia- 90 % more needing social care (moderate or severe level)- Much more informal social care

The increases to 2020 are less but are still dramatic

Where is the analysis of this by government?

Where is the plan to address it?

ii. Increased costsSo a big increases in number of older people with LTC’s

But LTC’s generate 70% of NHS costs!

So there will be a big increase in cost of NHS and social care

Where is the DoH’s medium term cost forecast?

Nuffield forecast a shortfall of £54 billion for NHS England by 2021/22

Or a £34 billion shortfall if massive productivity improvements

Base expenditure NHS England in 2010/11: £107 billion

In addition there is a current funding crisis for social care

Dilnot Commission and government’s response did not address this

Public spending on social and continuing care may have to rise from £9.3 billion in 2010 to £12.7 billion in 2022 – a 37% increase

How address great increases in demand and cost coming now?

Where is Government’s analysis of the issues and the options?

We need to debate these issues

iii. A radically different model of care

The challenge is much more than more money - ageing demands a different system

NHS prioritises acute and emergency conditions – 47% of total spend

Yet these are not the priorities for an ageing society

Experts told us we need a radically different model to manage long term conditions:

- More prevention, early diagnosis

- Integrated around the individual, personalised, home centred, not hospital based

- Avoid unnecessary hospital admissions – far too many frail elderly there

- Shift funding from hospitals to community and primary

- Address the fragmentation and the wrong incentives:

- “It’s institutionally fragmented between health and social care, mental and physical health and primary and secondary care” Norman Lamb, Health Minister 2013.

This will require massive system changes irrespective of funding issues.

Do ministers agree this?

If so, where is the plan to do so?

iv. Housing

Suitable housing is crucial to preserve independence but we found:

- Patchy care and repair services

- Poor new supply market

- Lack of support services

- No coherent plan or drive to address it

Central and local government need to address urgently

4. FairnessBig increases in spending on health and social care and pensions

How finance this – public/private and between generations?

Welfare state – younger pay for old initially

But we cannot shunt too many costs down the line

Gender fairness

Social class fairness

Geographic inequities

5. Government and Political Parties

A major and certain social change affecting everyone

No coherent pan-government consideration

Left to Department to address – departmentally!

Not considered from point of view of public

An existential challenge to NHS and welfare system

Focus on short term – election, economy, cuts

We should expect more:

- White Paper- Manifestos- Two commissions on:

o Income in later life and equity releaseo NHS and social care system and its funding

How do we get them to address this?

Justin Russell, Director - Ageing Society and State Pensions, Department for Work and Pensions

David Sinclair, Assistant Director, Policy and Comms, ILC-UK

Claire Turner, Head of Team (An Ageing Society) , Joseph Rowntree Foundation

Deborah Cooper, Member of the Institute and Faculty of Actuaries’ Council and member of the Institute and Faculty of Actuaries’ Pensions Board

Panel Discussion

This event is kindly supported by Joseph Rowntree Foundation#readyforageing

Panel Debate and Q&A

• What would your one single priority be for Government action in terms of responding to demographic change?

• How can we create a public debate on ageing?

• Does anyone think any country is in a position where it has successfully begun to respond to the challenges of an ageing society?

This event is kindly supported by Joseph Rowntree Foundation#readyforageing

Public Service and Demographic Change

23 April 2013

This event is kindly supported by Joseph Rowntree Foundation#readyforageing