Spending Review 2013

Older people featured rather significantly in the public spending review to 2015/16. The Chancellor talked quite forcefully about the need to address the problems in social care, and in his consideration of welfare spending, he firmly identified state pensions as remaining outside his proposed new ‘cap’.

440x210_george-osborneThe landscape for the next Government is coming into view, but what does it mean for older people beyond the rhetoric? By 2016, of course, we should be implementing the legislation currently being debated in Parliament and have in place a new single tier state pension and a new social care regime – funded in part by the ideas proposed by Andrew Dilnot. The spending plans suggest that more money will be diverted from NHS budgets into programmes jointly commissioned with social care.   If this means more integrated care and a more ‘whole person’ approach, it will be welcome. But before we get there, local government will have taken another severe cut in its budget, and there is speculation that social care support may be prioritised only for those with critical needs. This means we will remain far away from the ambition to provide the appropriate care which promotes independence and prevents people from becoming substantially or critically in need of care. Continue reading “Spending Review 2013”

Working together to support older people

The Autumn Statement announced bleak growth figures and more cuts ahead, reminding us all, once again, we face hard times and unprecedented and prolonged pressure on public services many of which older people rely.

This is why now, more than ever, we all need –  the government, public, private, and voluntary sectors and individuals – to work together to meet the challenges and maximise the opportunities our growing ageing population presents.

Age UK, together with our national and local partners, is playing its part. In 2012 we reached over 7 million older people with our information and advice services, our handy person service visited nearly 14,000 homes and we helped more than 65,000 older people keep active and healthy through our Fit as a Fiddle programme. In tough economic times we understand supporting people in later life to make informed choices and maximise their wealth, health, independence and wellbeing is important for the individuals and helps drive down inefficient and unnecessary costs in our public services. Continue reading “Working together to support older people”

Squeezing the rich pensioners

When Andrew Dilnot published his proposals on funding social care, he envisaged that a better, fairer system would require extra funding from public expenditure, and observed that since older people would be the principal beneficiaries, it would be preferable if this was raised by taxes which older people contribute to so that not all the cost would fall on the younger population.

Since then, a variety of ideas have been floated from a range of different quarters.   But the discussion has also become conflated with views about intergenerational fairness as the Government tries to bear down on public spending, and comments about the ‘generosity’ of some universal benefits received by pensioners.   There has long been a rumble of complaint that rich pensioners receive the Winter Fuel Payment.   Frank Field waded in, arguing that before we find more money for older people, we should be looking at the poverty and the shortage of opportunities for children.   The Lib Dem think tank CentreForum published a paper looking at the tax reliefs available to older people and their exemption from National Insurance if they are working over State Pension Age.   Now, in the margins of the Lib Dem and Labour Conferences, the appropriateness of pensioners’ benefits has again bubbled up, though the Coalition Agreement specifically protects these till 2015. Continue reading “Squeezing the rich pensioners”

Keep calm, but note the warning

Whilst social care reform proposals remain bedevilled by an inability to find a funding solution, the Office for Budget Responsibility (OBR) has published its annual Fiscal Sustainability Report.  As last year, this warns of the age-related risks to public finances in the longer term – which, to the OBR, is 50 years.

Its big picture forecast is of rising costs on health and pensions, offset by falls on public sector pensions, and of shrinking revenues from parts of the existing tax base especially oil and gas and (because of globalisation) corporation taxes and VAT. It expressly does not call for more fiscal tightening in the medium term – the period in the Treasury’s sights to 2017 – but it concludes that “governments would be likely to need some replacement sources of revenue just to keep the tax burden constant, let alone to meet the costs of an ageing population”.

Comparing 2016/17 with 2061/62, the OBR sees:

  • health spending rising smoothly as the population ages from 6.8% of Gross Domestic Product to 9.1%;
  • state pension costs increasing from 5.6% to 8.3%;
  • social care costs growing from 1.1% to 2%;
  • gross public service pension payments falling from 2.2% to 1.3% – or in net terms (including contributions) from 1.7% to 0.9%.

The shortfall in tax revenues are even less easy to project, but could amount to 2% of GDP or more.

These percentages translate into big money – in today’s terms, 1% of GDP is about £15bn. But it is striking how modestly social care features in these estimates. And of course, all the calculations are based on what we are doing today and cannot reflect any significant change in public habits and behaviour, or indeed scientific breakthroughs, such as finding a cure for dementia.

Meanwhile, what do we know about the public’s attitude to paying higher taxes for better public services? The picture is often contradictory. Polling by MORI shows that in 2010, 58% of the public supported cutting public services to pay off the national debt, but by June this year, that had fallen to 46%. The British Social Attitudes Survey, covering the years 1998 to 2009, showed a falling appetite for spending more on welfare benefits for the poor if it led to higher taxes: different age cohorts hold different views (with older generations being more supportive), but nearly half the baby-boomers, for example, supported this proposition at the beginning of the period, but only a third by the end. There has been a slow but steady shift from supporting a society which emphasises social and collective provision of welfare towards encouraging individuals to look after themselves – the balance is now 51:49.

The row about social care reform, of course, is that people probably would do more to look after themselves if the reforms gave them a credible platform to do so. That was the whole point of Andrew Dilnot’s proposed caps, which we now learn the Government agrees with in principle. If we look at the OBR’s rather gloomy forecasts we cannot have these proposals too soon, both for social care per se and for getting more efficiencies into the health service. Kicking these decisions into the long grass is not going to make the OBR any less gloomy next year.

Read Age UK’s briefing about the Governments proposals for social care reform

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