Published: 15 September 2004
Long-term Care Projections
Britain can expect a substantial increase in spending on long-term care for older people by the middle of the century, as the number of people living into their late 80s and beyond increases and real care costs rise, according to new projections based on the latest official population projections.
The projections, prepared for the Joseph Rowntree Foundation, suggest that care spending would need to rise by 315% in real terms between 2000 and 2051 to meet demographic pressures and rising costs, assuming that dependency rates, patterns of care and current funding arrangements remain unchanged.
On this set of assumptions - and allowing for an expanding economy - the proportion of national income (GDP) spent on care for older people would increase from around 1.4% in 2000 to around 1.8% cent in 2051.
However, the researchers emphasise that alternative assumptions yield a wide range of uncertainty around this central, base case projection.
The Government Actuary's Department's latest population projections have projected higher growth than previously anticipated in the number of older people.
The number of people over 65 in the UK is expected to rise by 81% over the next five decades from 9.3 million to 16.8 million.
But growth in the population over 85 - the age group most likely to need nursing, residential or home care - is now expected to rise by 255% from 1.1 million in 2000 to 4 million in 2051.
Using these projections, researchers at the London School of Economics and University of Leicester project that total UK spending on long-term care would rise from around £12.9bn in 2000 to around £53.9bn by 2051.
In order to keep pace with demographic change, the number of places taken in residential care homes, nursing homes and hospitals would have to rise by around 150%, from around 450,000 to 1,130,000, and the time spent by home care services caring for older people in their own homes would increase around 140%, from around 2 million to more than 4.8 million hours per week.
The report emphasises that the projections are sensitive to the assumptions made about rises in unit costs and future dependency rates.
For example, future improvements in general health, or advances in the treatment of disabling illnesses, could lead to a reduction in the proportion of older people needing residential or nursing home care.
Future public expenditure would also be affected by political decisions about the way in which long-term care is funded.
Already, England, Wales and Northern Ireland have made nursing care free of charge in care homes, while the devolved Government in Scotland has gone further, making personal care free as well.
The researchers estimate that, if free personal and nursing care had been introduced across the whole of the UK in 2000, public spending on long-term care would have risen immediately from £8.8 billion to £10.3 billion.
Their projections suggest that public spending would reach £42.6 billion or more by 2051, compared with £35.4 billion, if current funding arrangements were maintained.
With free personal care, public spending would account for 79% of all money spent on long-term care in 2051, as opposed to 66% if the current system continued.
The research team estimate that, if the number of dependent older people does not rise as rapidly as their central base projection assumes then - even with a policy of providing free personal care - the proportion of national income spent by the state on long-term care might not be much higher in 2051 than it is today.
But if dependency rates and unit costs are higher than their central assumptions, then the proportion of GDP being spent by the state on long-term care could almost treble.
The report also shows that the introduction of free personal care would be of greatest benefit to care home residents with higher incomes.
Residents in the bottom third of the income distribution would be little affected because almost all their costs, apart from 'hotel' services, are already covered by the state.
Those in the middle income group would see a small rise in the share of fees met from public funds, while those in the highest third would have their share of fees reduced substantially, from 89% to 48% in residential homes and from 69% to 34% in nursing homes.
Lord Best, Director of the Joseph Rowntree Foundation, said:
"It is seven years since the Joseph Rowntree Foundation's Inquiry into Paying for Long-term Care highlighted the implications for care services as life expectancy increases and those who were born during the post-war 'baby-boom' reach old age.
These new projections show that the major problems our inquiry anticipated as demand for nursing, residential and home care increases have intensified.
The potential for a four-fold increase in spending identified by this report should make politicians and policy makers stop and think carefully.
We all need to consider what changes could be implemented now if we are to ensure that people now in their 30s, 40s and 50s can be sure of receiving a high standard of care when they need it in old age. It is time to re-open the debate."
Further information
Future demand for long-term care in the UK: A summary of projections of long-term care finance for older people to 2051 by:
Raphael Wittenberg,
Adelina Comas-Herrera Tel: 020-7955 7306,
Linda Pickard and
Prof. Ruth Hancock Tel: 01206 873924
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