In March, a House of Lords select committee published the report Ready for Ageing, which analysed the implications of our rapidly ageing society – our biggest social change. We are living longer, and the ‘Baby Boomer’ generation is starting to retire. There will be nearly 40% more people aged 85-plus by 2020, and 100% more by 2030; the ratio of those working to those not working is worsening; and the fiscal and economic consequences are substantial. Yet social change brings many benefits, and the challenges are manageable if we face up to them.
Our report sets out why living longer and an ageing society pose issues for all of us: families, localities and businesses. Government alone cannot resolve them. But our central recommendation is that government needs to set out for consideration and debate, in a white or green paper, the scale of the issues and their implications for us all.
To ensure government was aware of the report, I discussed it with six ministers and with some of our most senior civil servants. They all agreed that this is a big issue. They asserted, correctly, that government has addressed aspects of ageing by raising the state pension age and committing to implement the Turner, Hutton and Dilnot reports. But most recognised in private that much more is needed, and that government has neither been joined up nor had an honest debate with the public about the issues.
The most important issues include:
- The demand for, and cost of, NHS and social care will greatly increase. The funding gap for NHS England is forecast to be £30bn by 2020-21. Integration of NHS and social care is needed, but will not solve this!
- OECD and OBR reports show that an ageing society makes our historic welfare settlement unsustainable, and this will impact soon and persistently.
- Most people have little idea how long they will live, how thinly their savings will stretch, and how they need to prepare to save more and work longer.
- The impact locally will be great, and localities and local government need to plan how to prepare.
The government’s response, published just before recess, was little more than a list of what departments are doing. It was good to see further work by pensions minister Steve Webb on extending working lives and by housing minister Mark Prisk on reviewing the implications of ageing for housing. But government ignored the fundamental recommendation: to publish a green paper to set out the issues for debate. Why was the government’s response so weak?
Fundamentally, there is a systemic failure of government to pay enough attention to difficult, medium-term problems that need a degree of cross-party commitment. Government does not have the machinery to manage these: it needs new institutions at its centre, sufficient capacity, and new accounting systems to incentivise investment over time and to seek cross-party agreements on such issues.
Without this, politicians of all parties will be obsessed with not frightening the public in the run-up to the election. The government wants to be able to paint a picture of success, not challenges, as we approach 2015; and the Opposition wants to project an image of hope and better times, not of difficult choices.
Yet the pressures consequent on an ageing society are unavoidable, and we will be less able to manage them if we delay and fail to have an honest dialogue about them. There will be increased morbidity, with people living longer but with longer periods of ill health. Further, many more older people must mean spending more on health and pensions; who should pay for this? How should our wider welfare settlement change in the light of these and other pressures? How might individuals and families best prepare for much longer lives? How should localities prepare for many more older people? And what does this mean for business, for its labour supply and employment offer?
Many will benefit from longer lives, but we are facing major changes as a consequence and need to address how our society, our attitudes, our public service and our welfare settlement adapt, and how to save more or work longer to maximise the benefits longevity offers.
My committee members and I will not give up on this; we will encourage all parties to address these issues in their manifestos. And we will urge respected think tanks to seek to address some of the issues that government has ducked. It would be good to get comments on this to start our own dialogue!