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Better understanding of ageing population crisis required to inform public spending cuts

Significant variation in intensity of ageing population across the UK will have regional implications for local authority service delivery

The challenge that the UK's rapidly ageing population presents local government is a national problem. Yet it is not one that will be equally shared by all councils. According to a new report commissioned by Deloitte from the London School of Economics and Political Science (LSE), variation in the 'intensity' of the ageing population is not well understood by local authorities. Without a more precise and comprehensive understanding of demographics at a local level, councils will be unable to deliver public services effectively in the future, the report argues.

The ageing population challenge for local authorities

By 2031 the number of people aged over 65 (older people) in the United Kingdom is projected to increase from 9.7 million to 15.8 million. This will present a significant challenge, both financial and operational, for local authorities. In 2007-08 approximately 10 per cent of English local authority spend - £8.8 billion - was on personal social services for older people, just one of a wide range of services that local authorities provide to older people. Total expenditure on personal social services is expected to rise to over £20 billion by 2031.

Ill-informed strategies will target limited resources in the wrong areas

Caroline Hope, head of the social care practice at the business advisory firm Deloitte, said: 'As everyone can see there will be considerable pressure on the funding of public services in the foreseeable future. So how, as a society, we respond effectively to the challenge of an ageing population is going to rise up the agenda. Without a comprehensive understanding of the problem, ill-informed strategies will target limited resources in the wrong areas.'

The LSE report (Improving service delivery to an ageing population: strategies for UK local authorities) was produced by a five-person team for LSE's MPA Capstone project. The report brings together the many different dimensions of the UK's ageing population and models the regional implications for local authority service delivery. It incorporates other demographic changes including the number of younger people and the changing profile and characteristics of older people, such as their health, ethnicity, extended family and attitudes.

The report finds that the impact of the ageing population will be at its most acute in areas where there are small numbers of young people and higher demands due to characteristics such as poor health or social isolation. Thirty shire counties and unitary authorities will face the most acute implications with London boroughs facing the least.

Dr. Joachim Wehner, of the LSE's MPA Programme, said: 'At a time when the immediate political focus is on fiscal consolidation, the findings in this report highlight the long-term budgetary pressures associated with an aging population. The research shows that an understanding of the geographical patterns of demographic change and the locally differentiated impact on the demand for services will be crucial to an effective policy response. Short-term plans for reductions in public spending must not put at risk the service infrastructure that will be crucial for addressing this challenge in the coming decades.'

Solutions require a deep understanding of the problem.

'Currently councils are using information about their services that is too generic and which doesn't provide a detailed understanding of local demographics. The LSE research is a good example of how better modelling and demographic profiling is needed to support planning. For councils to plan service delivery and budgetary cuts at a regional level, in this age of austerity, they are going to need far better insight into what is a highly complex problem,' Caroline Hope said.  

Deloitte suggests that local authorities take the following approach to develop an effective policy response to the UK's ageing population: 

 Approach the challenge from the broadest possible viewpoint and actively engage with all agencies and organisations who are involved in serving the needs of older people.

 Explore data that is currently collected to really understand what it tells you about the needs and changing nature of the ageing population.

 Remove any mystery by sharing data widely and pooling information; this can also help avoid the defensive position of being bombarded with FOI (freedom of information) requests. 

Marta Łuczyńska, one of the MPA Capstone team of researchers, said: 'The model that we developed showed significant variation in problem intensity across types and groups of local authorities, supporting our argument that tailored responses to population ageing are necessary. Each authority needs to establish a better understanding of the characteristics of its current and future generations of older people and respond to that population's specific service delivery needs.'

A summary report of LSE's research findings can be found online: www.deloitte.co.uk/lseageing

Click here to view the full report

Click here to view the supporting statistics



Jason Leavey, PR Manager, Deloitte 020 7303 7030 jleavey@deloitte.co.uk

Dr Joachim Wehner, Lecturer in Public Policy, LSE 020 7107 5408 j.h.wehner@lse.ac.uk

  Jessica Winterstein, Deputy Head, LSE Press Office 020 7107 5025



The UK's ageing population - context

In the next 25 years from 2006 to 2031 the number of people aged over 65 (older people) in the United Kingdom is projected to increase from 9.7 million to around 15.8 million. 

This increase of 6.1 million is over five times that of the preceding 25 years. From 2006 to 2031, the proportion of older people is projected to rise from 16 percent to 22 percent. It took 25 years for the proportion to increase from 15 percent to 16 percent. In 2017 there are expected to be around 12.5 million older people — two million more than today — making up nearly 19 percent of the total population.

About the LSE research

 "Improving service delivery to an ageing population: strategies for UK local authorities" by Marta Łuczyńska, John King, Jonathan Lee, Miguel Lim and Evan Kohn was produced for LSE's MPA Capstone project, a compulsory course for all 2nd Year MPA students at LSE. The Capstone project is designed to ensure that LSE MPA students have an intensive and closely supervised experience of working in a group on an applied public project in a way that extends their capabilities and applies what they have learnt in the MPA core courses in a professional manner.

Deloitte, the business advisory firm, commissioned a team of postgraduate researchers from the MPA Programme of the London School of Economics and Political Science to conduct an analysis of how population ageing in the United Kingdom will impact local authority service delivery. The report is based on a number of original research findings including:

 3-D modelling on the demographic profiles of 148 English local authorities from 2009 to 2031.

 Indexing of the performance of local authorities in delivering social care services to older people and the extent to which their policies are 'joined up'.

 A detailed census of 46 local authority older people's strategies and associated action plans.

 A census of 101 accounts of local best practice published by UK local authorities and best practice from five comparable countries.

 A case that analyses Cumbria's specific ageing population and showcases practical application of the report's findings. 

For more information about the MPA Programme, please visit www.lse.ac.uk/mpa.

About Deloitte
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms. Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu ('DTT'), a Swiss Verein, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTT and its member firms.

The information contained in this press release is correct at the time of going to press. For more information, please visit www.deloitte.co.uk.