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Public service and demographic change: an ILC-UK/Actuarial Profession joint debate, supported by JRF


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Public service and demographic change: an ILC-UK/Actuarial Profession joint debate, supported by JRF

  1. 1. Public Service and DemographicChange23 April 2013This event is kindly supported by Joseph Rowntree Foundation#readyforageing
  2. 2. WelcomeBaroness Sally GreengrossChief ExecutiveILC-UKThis event is kindly supported by Joseph Rowntree Foundation#readyforageing
  3. 3. Lord Geoffrey FilkinChairHouse of Lords Public Service andDemographic Change committeeReady for Ageing?This event is kindly supported by Joseph Rowntree Foundation#readyforageing
  4. 4. Ready for Ageing?Lord Geoffrey FilkinChair, House of Lords Public Service and DemographicChange committee
  5. 5. Ready for Ageing?“Government is woefully underprepared for ageing…whichwill have a huge impact on our society and public services”1.Opportunity and Challenge2.How to support a longer life3.Living Independently and Well4.Fairness5.Government and Political Parties
  6. 6. 1. Opportunity and ChallengeProgress – a success and an opportunityTwo big and certain social changes will affect us all:• Much longer lives - 50% of girls born now will live morethan 97 years• Many more older people - see below:Increase 2011 to 2021 Increase 2010 to 203065+ 24% 51%85+ 39% 101%
  7. 7. Major challenges to individuals, communities and attitudesPerhaps the biggest public policy challenge we faceWe looked ahead, to next decade, 2020 to 2030Rapid, cross party holistic review - the firstWe should expect such an analysis by Government
  8. 8. 2. How to support a longer lifeMany people are unaware, unprepared, underfundedTrusted information neededThree priorities for action:I. Longer workingII. Pension reformIII. Equity releaseWhat is government doing to address these issues?
  9. 9. I. Longer workingRises in the State pension age were right and will continueSo later working will be necessary for manyThere are many benefitsThis 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
  10. 10. II. Reformed pensions- A serious pension and savings problem already- Compounded by denial and justified scepticism- UK’s pension policy is unusual – neither compulsorypensions nor savings- Flight of employers from DB and pensions wherever theycan- Pension position of many will be much worse than inpast
  11. 11. - A longer life exposes the gaps and increases our risks- Single tier pension is progress- Auto-enrolment will at best generate a pension worthonly 8% of salary- So many risk finding themselves much worse off thanexpected- Defined contribution pensions are a broken product- Has to be addressed
  12. 12. III. Equity releaseMany have substantial assets which may need to be usedProperty wealth – prudence and thrift – or windfall gains?Cannot expect others to pay to keep them sacrosanctMoving house – one way to releaseEquity release should be simple, safe and fair – it’s notNeeded to fund social care, adaptations and income supportGovernment and financial services must deliver this
  13. 13. 3. Living Independently andWellLiving independently and well is what most hope forFour 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 independenceHas government assessed and addressed these?
  14. 14. i. Increased demandWe did not find a DoH analysis of thisMany more older people with longer lives and long termillnessesPredicted 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 careThe increases to 2020 are less but are still dramaticWhere is the analysis of this by government?Where is the plan to address it?
  15. 15. ii. Increased costsSo a big increases in number of older people with LTC’sBut LTC’s generate 70% of NHS costs!So there will be a big increase in cost of NHS and social careWhere is the DoH’s medium term cost forecast?Nuffield forecast a shortfall of £54 billion for NHS England by2021/22Or a £34 billion shortfall if massive productivityimprovements
  16. 16. Base expenditure NHS England in 2010/11: £107 billionIn addition there is a current funding crisis for social careDilnot Commission and government’s response did notaddress thisPublic spending on social and continuing care may have torise from £9.3 billion in 2010 to £12.7 billion in 2022 – a 37%increaseHow address great increases in demand and cost comingnow?Where is Government’s analysis of the issues and theoptions?We need to debate these issues
  17. 17. iii. A radically differentmodel of careThe challenge is much more than more money - ageingdemands a different systemNHS prioritises acute and emergency conditions – 47% oftotal spendYet these are not the priorities for an ageing society
  18. 18. Experts told us we need a radically different model to managelong term conditions:- More prevention, early diagnosis- Integrated around the individual, personalised, home centred,not hospital based- Avoid unnecessary hospital admissions – far too many frailelderly 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.
  19. 19. This will require massive system changes irrespective offunding issues.Do ministers agree this?If so, where is the plan to do so?
  20. 20. iv. HousingSuitable housing is crucial to preserve independence but wefound:- Patchy care and repair services- Poor new supply market- Lack of support services- No coherent plan or drive to address itCentral and local government need to address urgently
  21. 21. 4. FairnessBig increases in spending on health and social care andpensionsHow finance this – public/private and betweengenerations?Welfare state – younger pay for old initiallyBut we cannot shunt too many costs down the lineGender fairnessSocial class fairnessGeographic inequities
  22. 22. 5. Government and PoliticalPartiesA major and certain social change affecting everyoneNo coherent pan-government considerationLeft to Department to address – departmentally!Not considered from point of view of publicAn existential challenge to NHS and welfare system
  23. 23. Focus on short term – election, economy, cutsWe should expect more:- White Paper- Manifestos- Two commissions on:o Income in later life and equity releaseo NHS and social care system and its fundingHow do we get them to address this?
  24. 24. Justin Russell, Director - Ageing Society and State Pensions,Department for Work and PensionsDavid Sinclair, Assistant Director, Policy and Comms, ILC-UKClaire Turner, Head of Team (An Ageing Society) , JosephRowntree FoundationDeborah Cooper, Member of the Institute and Faculty ofActuaries’ Council and member of the Institute and Faculty ofActuaries’ Pensions BoardPanel DiscussionThis event is kindly supported by Joseph Rowntree Foundation#readyforageing
  25. 25. Panel Debate and Q&A• What would your one single priority be forGovernment action in terms of responding todemographic change?• How can we create a public debate on ageing?• Does anyone think any country is in a positionwhere it has successfully begun to respond to thechallenges of an ageing society?This event is kindly supported by Joseph Rowntree Foundation#readyforageing
  26. 26. Public Service and DemographicChange23 April 2013This event is kindly supported by Joseph Rowntree Foundation#readyforageing