How we fund and provide social care for the older population is an important policy issue. A National Audit Office report published this week suggests that the recent implementation of the Better Care Fund has so far struggled to reduce social care pressures imposing additional costs on NHS hospitals. The IFS Green Budget, also published this week showed that per-capita adult social care spending by government has fallen since 2009–10.
An important component of adult social care – which helps individuals to carry out everyday activities that they have difficulty with – is provided domestically in private residences. This is distinct from the care provided to individuals in residential nursing homes (3.4% of the over 65 population in England lived in a residential nursing home at the time of the 2011 census), and can be informal, or either publicly or privately funded. Increases in the size of the older population – the most recent forecasts from the Office for National Statistics (ONS) estimate an increase of 84% in the 85+ population between 2010 and 2030 – will push up demand for these services. However, the extent to which demands rise in line with the population depends on how the needs of older people change in future, in addition to the ability of individuals to make alternative arrangements for care (such as informal care from a relative). A new IFS report, published today and funded by the Health Foundation, therefore examines the extent to which changes in the receipt of care across successive birth cohorts might offset (or add to) increasing demand for care from population growth.
The report uses information from the English Longitudinal Study of Ageing (ELSA). This provides a representative sample of the English population over the age of 50. Individuals are interviewed every two years, providing information on their economic circumstances, health and wellbeing. This includes information on the difficulties individuals face in doing everyday tasks, and whether (and from who) they receive assistance with these tasks. The report studies how the use of care has changed among those aged 65+ across four different birth cohorts (1915-24, 1925-34, 1935-44 and 1945-54).
One factor which may reduce the amount of care required going forward is that in the future each person will need less care at any given age. If individuals become healthier across birth cohorts then those of a given age will require less social care in future. For example, the typical 85 year old today may have very different needs than an 85 year old ten years ago. A reduction in the per-person need for care over time may therefore help to offset some of the pressures from population growth.
The report indicates that the proportion of men aged 65 years and above reporting any difficulties with daily activities has fallen across birth cohorts. Men born between 1925 and 1934 were 4.7 percentage points less likely to report any difficulties at a given age compared to a man born between 1915 and 1924. This difference was even larger when looking at men born between 1935 and 1944, who were 7.3 percentage points less likely to report any difficulties compared to the 1915-24 cohort at a given age. This compares with the 61% (81%) of men who were aged 65 (85) and above who reported any difficulties in 2010. However, no corresponding differences were seen for women. These results suggest that rates of need for formal care may therefore be falling for men, but seem less likely to do so for women.
A second reason why we might expect to see reduced rates of formal care provision in future is due to the increased availability of informal care provided by partners. One consequence of increasing life expectancy, particularly for men, is that individuals more commonly remain in couples at older ages – they are less likely to be widowed at any age. Unlike health care, where the majority of care is provided formally by the government through the NHS, the majority of social care is actually provided informally. In 2010, more than 50% of ELSA respondents who reported receiving any assistance with activities received some form of informal care. The most common source of informal care is from a spouse. With more couples surviving into old age more will be able to rely on informal care from a spouse and hence, perhaps, need less formal care. This is especially likely to be the case for women, as increases in male life expectancy (which remains lower than female life expectancy) have sharply increased the number of women with partners at older ages. The results indicate that this is indeed the case for women, with later cohorts of women receiving more help from a spouse. For example, women born 1935-44 are 5.8 percentage points more likely to receive care from a spouse at a given age than are women born 1915-24. No statistically significant results are found for men.
So, by comparison with earlier generations, men from later birth cohorts are healthier, and women from later cohorts are more likely to receive informal care. Does this lead to a reduction in the use of formal care across cohorts? Results show that men born in later birth cohorts report receiving less formal care at a given age than their counterparts in earlier birth cohorts. The central estimates imply that the proportion of men aged 86-95 receiving formal care will be 2.4 percentage points lower in 2020 than in 2010. This compares with the 13.2% of men in this age group who reporting receiving formal care in their own home in 2010. However, the results do not show a corresponding change for women, among whom 29.9% reported receiving formal care in 2010.
What does this mean for likely levels of formal care required in future to meet the needs of the population? Taken together, the evidence suggests that a reduction in needs and the increase in informal care across birth cohorts will do little to offset the large increases in need for formal social care driven by demographic changes: the estimates imply that demand for formal care for men aged 86-95 will still be 41% higher in 2020 than in 2010. For women, where there is no evidence of reduced per-capita use of formal care, demand for formal care will be 15% higher in 2020 than in 2010. These pressures will be even greater by 2030, with a population which will have aged further. Our estimates also suggest that there will be rather less in the way of an offsetting reduction in needs at this time. Policymakers therefore should not rely on reductions in future needs to offset the additional cost of providing care in future, and should confront the tough choices over how to fund this care going forward.
This report was funded by the Health Foundation as part of a broader programme on the allocative efficiency of health and social care spending. The authors also gratefully acknowledge co-funding from the Economic and Social Research Council (ESRC) through the Centre for the Microeconomic Analysis of Public Policy (CPP) at IFS (grant number ES/M010147/1) and the 'Policies for longer working lives: understanding interactions with health and care responsibilities' project (grant number ES/P001688/1) that is part of the Joint Programme Initiative “More Years, Better Lives”.