Annex 18: Strategic planning, Key choices
and political leadership (see paragraphs 44 to 46 of the report)
284. Given the short-term nature of electoral
and budgetary cycles, there are very weak political incentives
for long-term thinking in the formulation of government policy.[517]
Governments have been better at acting to limit their exposure
to increasing costs as a result of ageing, such as in the field
of pensions, than planning for improvements in the quality of
the services that they deliver, commission or support. Although
the Government have acted to reduce the amount that they will
have to spend on state and public sector pensions (see Annex 8),
they have been less successful at changing the quality of healthcare
provision for older people (see Annex 12), ensuring the development
of better private sector pensions (see Annex 8), or transforming
the funding of high-quality social care (see Annex 11).[518]
285. Even where the Government have made progress
in these areas, this progress has often been patchy, and the implementation
of improvements dilatory. The problems for the future that the
Turner Commission identified, such as a fall in the relative value
of the state pension and the end of defined benefit pension schemes,
were evident in the 1990s or earlier.[519]
286. The Committee was disappointed to find
how little the Government have done to initiate a long-term, coherent
strategy to deal with the consequences of population ageing. We
heard little evidence that the Government have the capacity, inclination
or incentives to do the sort of planning that this issue requires.
The collapse of cross-party talks on social care before the last
general election serves as confirmation that it is politically
difficult for political parties to discuss the long-term implications
of an ageing population, and the public spending choices that
this demographic change might entail. In fact, electoral pressures
tend to incentivise parties to avoid discussing long-term issues,
which might involve confronting voters with unpalatable truths.[520]
There are a few mechanisms in place to encourage the Government
to think about the long term, such as the fiscal sustainability
reports published by the OBR. While these reports are a welcome
innovation, we are concerned that they have tended to have little
impact on policy. The Government are not obliged to respond, there
are no associated targets for the Government to meet, and the
reports themselves receive far less attention in media and policy
circles than the OBR's short-term economic and fiscal forecasts.
Important choices
287. The ageing of the country's population
means that the Government and all political parties may need to
consider choices about the welfare state and what we want from
our social settlement for the future, in the face of the rising
demands that an ageing population and other pressures will bring.
288. The Government need to expose the options
and communicate the choices to the public.
The current state of Government
planning
289. The Cabinet has not initiated a process
to assess the implications of an ageing society but has left the
various relevant departments to lead. Caroline Abrahams, Director
of External Affairs, Age UK, argued that "there is not an
overall vision" and the response to ageing was "all
fairly piecemeal".[521]
While we acknowledge that the Government are doing some high-level
thinking about the implications of an ageing society and some
effective cross-departmental work, we feel that the Government
have not looked at ageing from the point of view of the public
nor considered how policies might need to change to ensure that
people are better equipped to address their longer lives.[522]
290. Without a collective understanding of
the implications of ageing, and commitment to key Government actions,
responses by individual departments will be insufficient—especially
as responding to ageing requires services to work well together.
This Report has suggested a number of major changes that are needed.
These new approaches—such as those that we have argued for
in health and social care—may take a decade to bring about,
and should inform the priorities for the next spending review,
which will need to support the investment that some changes will
require. Ministers must take the lead, and make clear to the civil
service that inertia in planning for long-term issues such as
demographic change is not acceptable.
291. The Government also need to make the
case to the public for why any changes are needed. If a government
tries to move some age-related benefits onto different eligibility
criteria without setting out a comprehensive vision for older
age, explaining why changes are necessary, and committing to make
major improvements to services in some areas such as healthcare,
significant opposition would be inevitable. Our society tends
to be pragmatic—there was little opposition to raising the
state pension age—but the Government do need to treat people
as capable of understanding the issues and the arguments for change.
CENTRAL AND LOCAL LEADERSHIP
292. Politicians in all parties need to face
up to these issues, and ageing is not only a matter for those
in Government. Governing parties are also not sufficiently incentivised
to address the long-term decisions necessary unless all parties
face up to these difficult choices. The Committee considers that
a vision is needed for the long term, with a broad approach to
the public policy response to ageing to which all major parties
should ideally subscribe. We conclude that when political parties
are working on their manifestos, they ought to consider the wider
implications of the ageing society for the balance of responsibilities
between individuals and the Government.
293. The ageing population will introduce further
significant resource pressures at local government level, too.
Local councils currently are not required to produce medium to
long-term plans about how they will cope with increasing numbers
of older residents in their area but need to do so nevertheless.
The impact of ageing at the local level can be even more dramatic.[523]
Each local authority should look at ONS projections for the number
of people in their areas who will be 65 and over and 85 and over
in 2020 and 2030. They should then consider what action they need
to take through their housing, planning, social care and wider
services provision, and through their joint planning for health
and wellbeing. Each local authority should assess thoroughly
the implications of their forecast population. Joint planning
for these changes will be needed from local authorities, health
providers and civil society, and public health strategies will
be crucial.
DEMONSTRATING POLITICAL LEADERSHIP
294. The Government should address urgently
the implications of an ageing population for public policy and
services in a White Paper to be published well before the next
general election. This White Paper would analyse the issues and
challenges laid out in this Report. It would set out their vision
for future public service delivery against the background of the
ageing population.
295. It will also be crucial for all political
parties to signal to the electorate that they are taking demographic
change seriously. There needs to be cross-party understanding
of the importance of the challenges that the ageing society poses
and the choices involved, and an effort to seek as much consensus
as possible. Progress will not be made if the solutions chosen
by the Government change with each administration. The Committee
therefore proposes that the Government elected in 2015 should,
within six months, establish two commissions based on cross-party
consultations:
1. A commission to work with employers and
financial services providers to examine how to ensure adequate
pensions and savings for our society's older people, and to improve
equity release, and
2. A commission to analyse how the health
and social care system and its funding should be changed to serve
the needs of our ageing society.
296. Both commissions should be required to
report within 12 months and to make clear recommendations for
urgent implementation.
517 Q 656. See also HM Government, The Civil Service
reform plan, June 2012. Back
518
Central Government (DoH and DWP), further supplementary written
evidence. Back
519
Government Actuary's Department, Occupational pension schemes
1991, ninth survey by the Government actuary, 1994. Back
520
Q 62 Back
521
Age UK. Back
522
Sir Bob Kerslake supplementary written evidence; Central Government
(DoH and DWP), further supplementary written evidence; Q 649;
Q 61 (Trevor Huddleston, Chief Analyst, DWP). Back
523
The Saga Group. Back
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