Older and wiser?

Old age has been creeping up on us for a while. But are central and local government responding to the UK’s ageing population? Jessica Smith and Sarah Longlands report

The population of the UK is ageing. Over the last 25 years the percentage of the population aged 65 and over rose from 15% in 1984 to 16% in 2009, an increase of 1.7 million people. Over the same period, the percentage of those aged under 16 dropped from 21% to 19%.

It’s a trend that raises both opportunities and challenges for policymakers and local service deliverers, particularly in terms of the impact of these changes on the labour market and local economies.

Yet within economic development there is currently very little discussion about ageing, either in terms of forecasting demographic change and links with the economy or how local economic strategy may need to respond. To date, the debate has been dominated by concern about the potential impact on the health and social care agenda and the subsequent drain on the public purse – a subject explored by Hilary Burrage.

There is also debate about pensions and retirement policy and the extent to which government can continue to support people as they grow old. However, despite the inescapable reality of an ageing population, demographic change could bring unprecedented economic opportunities.

There are indications UK government is taking this challenge seriously. A range of useful initiatives have been developed, driven mainly by the Department for Work and Pensions (DWP), including the establishment of the UK Advisory Forum on Ageing.

However, a range of key policy agendas across government will have a significant effect on both the impacts of ageing and our responses. For example, the government’s economic policy – encompassing local enterprise partnerships, the Regional Growth Fund and enterprise zones – does not appear to be considering the economic opportunities related to future demographic changes.

Another is health. The health and social care bill is crucial to the government’s vision of reforming the NHS. The most prominent, and indeed contentious, proposals are the changes to GP commissioning: in particular, that of giving clinicians greater control over health budgets with the aim of improving efficiency and effectiveness in healthcare.

Devolving powers and responsibilities to GP-led consortia and to local authorities raises concerns about consistency across different areas, especially in terms of ensuring the needs of marginalised communities are met and that they have equal access to health services.

Concerns have also been expressed that the introduction of any system that pays on results will inevitably open up the risk that providers target ‘quick wins’, i.e. people that are already engaged with health providers, rather than those with entrenched challenges and barriers, including some older people.

On the welfare reform front we have seen all existing unemployment programmes rolled into the single Work Programme and the introduction of the Universal Credit. A ‘crackdown’ on incapacity claimancy means that from April this year, incapacity benefit claimants have been written to and asked to resubmit their assessments. The government hopes this will identify claimants that can be moved off Employment Support Allowance and onto Jobseeker’s Allowance.

This could have a significant impact on older people still of working age. It is also important that the informal work that older people provide to the economy is not overlooked, particularly the provision of care to loved ones.

On a positive note, the DWP launched the Ageing Well Programme in July 2010 with the aim of supporting local authorities to improve their services for older people. The key aim is to provide a better quality of life for older people through local services that are designed to meet their needs and recognise the huge contribution people in later life make.

It is hoped that Ageing Well will help local authorities to use their resources effectively, promote wellbeing in later life, ensure older people can live independently for longer, engage them in civic life, and tackle social isolation by recognising their potential.

In helping to raise awareness of the issues affecting older people, Ageing Well is a welcome step. However, when we consider the wider pressure being placed on local authorities as a result of spending cuts, and the subsequent impact on vulnerable groups including some older people, questions remain as to what extent they will have resources to deliver this vision.

The impacts of ageing will be felt most acutely in local government and many areas are beginning to consider how they respond, as these case studies illustrate. What they show is that the main response to date is similar to that of national government – the overwhelming focus is on the implications for health and social care.

There is limited discussion around how planning and economic development departments in local government need to respond. For example, how should local government encourage entrepreneurship among older people or what opportunities might there be to support older people in employment for longer?

A growth in any section of the population brings with it the emergence of new markets. Data shows that older people’s spending reached £97bn in 2008, around 15% of the overall household expenditure. The purchasing power of older people – the ‘grey pound’ – will therefore make an increasingly important contribution.

Data from the Office for National Statistics’ expenditure and food survey shows recreation and culture account for a large share of 65-74 year olds’ spending. Harnessing this spend will be increasingly important – for example, exploiting the opportunities of tourism and the subsequent multiplier effect.

The increase in the number of older people living in the UK is also likely to lead to greater demand for new technologies and products designed to support people to live independently. As today’s middle aged and internet-savvy population move into old age, they will create a growing market for online-based services and support. There are also opportunities for the growth of medical and pharmaceutical sector as the demand for new drugs and treatments rises.

There may also be changes in the type of infrastructure required, for example, the way society uses public transport may change with reduced pressure on commuter services as the working age population decreases. Housing and services provision will also need to change, as people decide to move out of highly populated areas to suburbs and rural areas. This in turn will provide opportunities for developers and the construction industry to explore new types of housing and communities.

An interesting potential economic benefit of an ageing population is an increase in entrepreneurship, particularly for active older people keen to use retirement as a way to explore new opportunities. Old age isn’t what it used to be – people retiring in their 60s can now expect to live until they are at least 87.

Currently, there are 10,000 people aged 100 or over. By 2050 there will be 275,000. Setting up a business may be one of the many options older people consider as they retire, particularly if they have capital to invest from a lump sum payment.

This may be for lifestyle reasons or simply a desire to create a new career or try out a new idea. Even if they are not interested in setting up their own business, they may be interested in the idea of investing in local business for financial reasons, particularly in a context of low interest rates. In addition, former business leaders who are retiring or scaling back their involvement could play an important role in supporting or mentoring future younger entrepreneurs who are starting out in business.

In many communities, older people are a huge source of volunteers and play a key role in sustaining a vibrant VCS and their contribution is well documented. As the population ages, more and more are likely to be interested in playing a wider role as they retire, particularly if they are keen to remain active.

Many older people are already socially active and embedded in their communities and are therefore well placed to make a real contribution to the Big Society agenda. However, it is important to recognise that they themselves are likely to suffer from cutbacks in public services which may inhibit their ability and willingness to volunteer.

Many are keen to remain active when they retire and a high proportion work part time. This will be increasingly important as the working age population declines. In future, in order to fill vacancies, employers may want to explore the option of more flexible working conditions with more part-time opportunities.

We round this article off with a six-point plan outlining some of the key areas that need to be addressed if we are to turn the many challenges created by an ageing population into opportunities.


1. Local economies need to plan and adapt to the opportunities
Issues relating to the ageing population are often seen solely in terms of health and social care. However, local authorities must adopt a much broader understanding and realise the impact it will have across service areas. The ageing population should be understood as a key issue for economic development and new structures, particularly local enterprise partnerships, should understand the demographic trends of their areas and their strengths in providing and creating appropriate services. They should also be flexible to new ideas about the role of older people in both setting up and financially supporting local business.

2. Changing the discourse around ageing
Many local strategies focus on the challenges of ageing and the threats to economic vitality. This needs to change. This trend is already well established, therefore we need to explore how we can adapt and harness the skills, resources, experience and contribution of older people in their communities to support the economy in the future.

3. Recognising the heterogeneity of the older population
It’s crucial policymakers understand ‘older people’ are not simply one homogenous group. Failing to recognise the complexities, as with any other group, risks stereotyping. It is important when planning, designing and delivering services that the needs of potentially marginalised groups of older people are recognised, including lesbian, gay and bisexual and those from ethnic minority communities. And while many older people are active, engaged and keen to articulate their views and perspectives, many simply do not have the capacity to do so. It is vital service providers adopt effective engagement approaches that are sensitive to the heterogeneity of the older population.

4. Ensuring older people have a voice in shaping emerging policy
Since last year’s general election, the rate and scale of policy change has been rapid. Emerging policies, from the Big Society to GP-commissioning, will radically change the way services are designed and delivered. There are opportunities for older people within these policy developments. The Big Society agenda could, for example, result in greater recognition of the role of older volunteers, while GP-commissioning could encourage the development of more targeted and locally bespoke health-related services.

5. Understanding the importance of joined-up working
Traditional approaches to service delivery for older people will become less appropriate as the population ages and the demographic profile shifts. Local authorities will need to develop long-term plans to set the foundations for more effective service delivery, especially in the current climate of public sector cuts. Developing joined-up working practices will be important for developing more responsive services. This will require collaboration and effective communication between the public, private and voluntary and community sectors.

6. Engaging the private sector
It will be increasingly important for the public sector to engage with private sector employers. With the phasing out of the default retirement age, employers will need to be supported in order to create the conditions for older people to continue working for longer; such as making adaptations to the workplace or introducing flexible working practices. In an increasingly competitive job market there will also be a need to raise awareness among employees of the skills and qualities of the older population, and also to take action against discriminatory employment practices.

  • This article is drawn from the latest Rapid Research from CLES – you can download the full report here. The authors would like to thank Simon Hobbs at JoinedupConsulting and Alan Hatton-Yeo from the Beth Johnson Foundation for their assistance. Rapid Research is a swift and incisive analysis of policy trends and developments produced on a regular basis by the CLES policy team. If you’d like to discuss this piece of research, email Jessica or call her on 0161 236 7036.
  • Download the ezine version of this article.


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