New age thinking

1 December 2014

The ageing population poses clear challenges for the health and social care sectors. But it also demands radical action and innovation from business.

“100 is the new 70,” said former Swedish prime minister Fredrik Reinfeldt at this year’s CBI’s Annual Conference. One out of every three children born in the UK today will become centenarians. The number of those aged over 85 is expected to double by 2030. And by 2050 there will only be two people in work for every pensioner, compared with four today. 

Often the ageing population is portrayed as a threat to the UK and an increasing burden on the state, which is still reeling from austerity measures. But it also brings plenty of opportunities for businesses willing to adapt and innovate, including access to a wider skills pool as well as new markets.

The skills shortage tops many businesses’ agendas and the UK already has an older workforce than it did pre-recession. That’s not just because of the age discrimination legislation or about delaying pensions liabilities, says Sarah Harper, director of the Oxford Institute of Population Ageing.

“Employers look at the older workforce as more experienced, especially when the skills shortage is being felt,” she says.

And that skills problem is only likely to get worse. Lord Filkin, chairman of the Centre for Ageing Better, points to the disparity between the 13.5 million job vacancies expected over the next 10 years and the fact that only 7 million young people will be entering the labour market in that time.

“Businesses are going to need more older workers and therefore they need to think about how they change their attitudes and their practices to employ older people,” he says.

“We have institutionalised this idea that fit, healthy, active men and women in their 50s could leave the labour market and [taxpayers] would support them for 30 years,” Harper agrees. “Many people could work well into their early 70s in a knowledge economy.”

Valuable resource

Ros Altmann, the government’s business champion for older workers, emphasises the urgency. She warns of long-term economic decline if organisations fail to change their mindsets. “Make a plan now,” she says. “Don’t let the demographics overtake you.”

As part of that plan, Altmann talks of the “three ‘r’s”: retain, retrain and recruit. Letting employees walk out the door for no other reason than age, taking their skills with them, is a “waste of resources”, she says. Flexible working – which can benefit all employees – or moving workers into a more suitable role might be all it takes to keep them on. But too many businesses train only their young employees, when many of their older counterparts would benefit, she says.

She adds that too many people aged 50-plus, who have lost their job through redundancy or ill health, find it hard to re-enter the workplace, when businesses should be better at recognising their experience and talent.

Harper points to research that suggests those aged between 40 and 60 tend to take fewer days off sick than their younger colleagues. She also argues that the UK lags behind other countries in its support of older workers, and that work-life balance tends to focus around supporting those with young children, not those aged 50 or 60 who may have frail, dependent parents.

Although there are firms in the UK that employ good practice in this area (Harper names BT as an example), in the US, it is far more common to find gerontologists in personnel departments who can help find relevant services and eldercare facilities, particularly when employees relocate.

Altmann argues that age should be a part of the diversity agenda, and that a revolution is needed in terms of attitudes to and among older workers – similar to that experienced by working mothers over the past 30 years. She’s setting up a business taskforce on ageing in the hope of driving the necessary change.

A ready market

According to Filkin from the Centre for Ageing Better, there’s another good reason to employ older workers: they’ll have a greater understanding of older customers. 

Bank of America Merrill Lynch estimates that the over-50s account for 50 per cent of total UK consumer spending. That’s likely to grow: according to Eurostat, spending among the over-60s has risen 50 per cent faster than among the under-30s in the past two decades. 

Globally, the opportunities are even more significant, given that Euromonitor predicts the spending power of the “baby boomer” generation will surpass £9trn by 2020.

With more people wanting to enjoy an “extended middle age”, and living better for longer, there’s a ready market that businesses should be exploring more for their products and services, says Filkin. And when people want to sustain their independence for as long as possible, there is also plenty of potential for innovation. 

John Myatt, strategic development director at Serco Health, adds that it is in the best interests of businesses to step up and engage with older people, building better relationships with the  communities in which they operate. 

Serco is signed up to Public Health England and Alzheimer’s Society’s “Dementia Friends” initiative, training staff to understand more about the condition which affects 850,000 people and the small things they can do to help sufferers they meet.  

In February, Argos, Homebase, Marks and Spencer, Lloyds Pharmacy and Lloyds Banking Group committed to create more than 190,000 Dementia Friends in shops and banks across the UK. A study by the Alzheimer’s Society found that one in four people with dementia have given up shopping since being diagnosed, even though the majority feel that this is the most common activity that enables them to feel part of their community. 

At the time, M&S retail director Sacha Berendji said: “We want our stores to be friendly, safe environments for customers with dementia. That’s why we will be empowering all 60,000 of our store colleagues to become Dementia Friends over the course of the year.”

And there is a clear business case for helping older people in other ways too. Although it’s likely to change in the future, according to the Office of National Statistics, three in 10 people aged over 65 have never used the internet – and that rises to seven in 10 for those over 75. In response to this challenge, Barclays has set up “Digital Eagles”, a free service aimed at helping customers keep up to date with technology and get the most out of online. It has 6,000 Digital Eagles in its branches throughout the country, with some visiting care homes.

Thinking differently

But the biggest test of all is how to reform public services as demand on pensions, health and social care rises – and here too businesses need to play their part. “The scale of the challenge of our ageing population is unprecedented and historic,” says David Sparks, chair of the Local Government Association. 

The organisation’s own calculations, based on demographics and the government’s financial projections, suggest a funding gap by 2020 “that would result in local councils doing little more than caring for old people and looking after children”.

It’s a similar story with the Five Year Forward View from NHS England, which argues that the service faces a £30bn shortfall by the end of the decade thanks to, as Myatt puts it, the almost inevitable continuation of the 66 year trend of healthcare inflation caused by new treatments and changing demands.  

“The urgency is being felt,” says Sparks. “It’s directly analogous to a major company within a sector that is under threat having to adapt to new markets, and there is a paramount need to listen to customers.”

There is growing consensus – as heard at the CBI’s latest Public Services Network event – around the need to include the public in honest discussions about the future provision of services, the cost of them and the difficult decisions that need to be made. But Sparks is confident that councils up and down the country have an appetite for new solutions and new methods of delivery, and that they’re more open-minded on procurement than ever before. To make that possible, he also emphasised the need for innovation and the importance of partnership with the private sector.

But Myatt warns that there is “no convenient solution”. Serco is working with the Health Service Journal on the Commission on Hospital Care for Frail Older People. Its report, published in November, recognised that improving out-of-hospital care can improve care for older people but dismisses as “magical thinking” the idea that merging health and social care budgets will automatically reduce the long-term need for acute hospital beds.

Myatt is concerned that politicians of all parties are too quick to offer the public what might appear an enticing service without providing adequate funding in their plans. 

Within a hospital environment, Serco is trying to do things differently. For example, it is equipping support workers with listening and observation skills to complement the work of clinical staff and designing new facilities with the needs of older people in mind to improve their experience and enhance their recovery.

Joining the dots

There’s also a strengthening view, voiced by Filkin, that more needs to be done to encourage people to shift their behaviours to avoid “self-inflicted health problems” caused by smoking and eating. He adds that the solutions must include how town planners, transport operators and housing providers are adapting to the rise in elderly users. 

On the latter, for example, he says there is still too little suitable accommodation to keep older residents independent for longer and, without it, they have no choice but to remain in expensive hospital beds or in houses that would suit larger families better.

This is something Neil Euesden, managing director at housing services provider Pinnacle PSG is trying to tackle. “Housing is at the heart of the community, and it forms the centre of health and wellbeing,” he says. 

His company is involved in a PFI initiative with John Laing and Wates Living Space to provide extra care housing schemes to those aged 50-plus who want to retain their independence, but need some care and support in order to do so. Some of the homes are designed for those with dementia, others for wheelchair access, but they also include “hubs” for communal facilities, while staff work closely with local health partners including district nursing and community care teams to provide a holistic and streamlined approach to care provision.

For Euesden, it goes back to tackling loneliness by involving elderly residents in the communities where they live and keeping them active. But he emphasises the importance of using health budgets earlier to prevent more expensive health problems down the line. 

“Technology also has a huge role to play in making their lives easier,” Euesden adds. Here he chimes with the CBI’s latest report, Our Future Public Services, which calls on government to digitise more health services, including appointment booking for all GPs, e-prescriptions for smartphones and online GP consultations where appropriate, by 2020. 

Yet at the PSN event, MP Stella Creasy implored both those in the public sector and businesses to be even more radical in their thinking. Meanwhile CBI deputy director-general Katja Hall warned that “tinkering around the edges of public service reform” would not meet these new challenges. 

The only long-term solution is for people and organisations to start thinking differently about ageing – and innovate as if their long lives depended on it.


Our Future Public Services

The CBI’s latest report issues an urgent call to action in response to three challenges:

Public services need to get ahead of the game in meeting the needs of an ageing population, while we start to live within our means;
Public services need to fit around people’s lives and match their changing expectations;
People need to be confident that ongoing change is the right thing to do and support it.

It urges the next government to build a consensus on what our future public services look like and implement a plan to make the vision a reality.


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