preparing for ageing

8/9/2019 Preparing for Ageing

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RESEARCH SUMMARY

PREPARINGFOR AGEING

LAB ACCOUNT PART 1


2/1602 PREPARING FOR AGEING

ABOUT THIS PUBLICATION

This research summary is based on a ull report commissioned by NESTA

rom Deloitte. It describes the challenge o an ageing society, assesses

the role that innovation is currently playing in meeting this challenge, and

identies where innovation needs to be harnessed more ully. It covers the

public, private and voluntary sectors, across ve areas: housing; the local

environment; health and social care; personal nance; and social inclusion.

The ull report is available on the NESTA website at www.nesta.org.uk

The original research was conducted by Deloitte. This summary was written

by Dr Michael Harris at NESTA. The views expressed in this publication are

those o NESTA only.

ACkNOwLedgemeNTS


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Individually and collectively, we are unprepared or an ageing society. We

are not saving in readiness or a longer retirement, taking appropriate

action against the illnesses o old age, or anticipating the social isolation

that oten accompanies the end o work. Without radical changes, many o

us are heading towards a uture in which we are poorer, sicker and lonelier.

We need new services, products and initiatives that help us to live

healthier, wealthier and happier longer lives across health and social

care, housing, transport, the local environment, and personal nance.

This is not about more public spending; it is about averting an

unprecedented drain on public nances (estimated at more than 300

billion by 2025). We need more ecient public services to cope with the

increasing demands o an ageing society, and a more attractive market

or a wider range o providers to develop new products or older people.

But the current market in innovation or an ageing society is weak.

There are insucient incentives or providers to develop innovations,

a lack o data about the potential market or new products, and

sometimes infexible bureaucratic boundaries and regulations.

Preparing or an ageing society is not just a matter or government.

Individuals, companies and charities will have to play their part. Butgovernment must play a leadership role, especially in kick-starting

the market. Only government can ensure that policies and regulations

stimulate innovation, that more support is available by creating a

100 million innovation und and that the public better understands

the challenges ahead.


4/1604

THe CHALLeNge OF

AN AgeINg SOCIeTY

Our society is ageing. As a result o increasing lie

expectancy, in 2008 the number o people above state

pension age exceeded those under 16 or the rst time.

By 2025, hal the UK adult population will be aged 50 or

over (27 million people). One in our babies born today isexpected to live to 100.

This proound demographic shit will increase the

numbers o people aected by poverty, ill-health,

unemployment and social isolation.

This growth in the number o older people is one o the

most signicant social challenges we ace. It is also one

o the most complex, cutting across nearly every area o

public policy.

For example, there are obvious links between the quality

and appropriateness o housing or older people, the

accessibility o local services, personal nances, and

health and wellbeing in older age. Further, an individuals

personal circumstances across these issues may

represent the culmination o decades o past decisions

and actions.

Figure 1: Population estimates and projections, UK, population in 2007, compared with 2032 (thousands)

Source: ONS.

60

45

15

30

0

105

90

75

FemalesMales

2007

2032

0100200300400500600 0 100 200 300 400 500 600

PREPARING FOR AGEING


5/1605

The costs o complacency

As a result o rising costs in areas such as social care,

long-term health conditions, pensions and benets, the

combined costs o an ageing society can be estimated

at more than 300 billion by 2025. To put this in context,

this is around three times what we currently spend on theNHS.

Without radical action, in an aged society we could ace

bankrupt and decrepit public services, empty private

pension unds, a crisis o legitimacy or public services

and the state, and widespread social division and

generational tension as a result o the higher dependencyratio o working taxpayers to pensioners.

Present

Future

Health and

social care

More than a quarter

o 50-64 year olds

have a long-termhealth condition or

disability. Hal o all

health spending is on

people over 65. 1.5

million older people

experience a shortall

in meeting their care

needs.

Health and

social care

The growth o an older

population will place

renewed strain on

the health and care

systems as demand

or services increases.By 2025 more than six

million older people

will suer rom long-

term illness, while

more than one million

people over 80 will

suer rom dementia.

Two-thirds o us will

need to be cared or

by 2026, a rise o more

than 40 per cent rom

today.

Housing

Older people spend

70-90 per cent o

their time at home.

But three millionhouseholds with at

least one person aged

over 60 in England are

categorised as non-

decent.

Housing

By 2026 older people

will account or

almost hal (48 percent) o the increase

in the total number o

households, resulting

in 2.4 million more

older households

than there are today.

But the UKs housing

stock includes many

19th and 20th century

buildings that are

increasingly unsuitable

or older people.

The local

environment

Older people are

most likely to fnd it

difcult to access localservices: more than 20

per cent fnd access

to their local hospital

very difcult. More

than 1.1 million older

people eel trapped in

their own home.

The local

environment

The increase in

long-term illnesses,

alongside increasingly

tight personal

fnances, will limit the

reedom o movement

o many older people

but without radical

change our localities

will ail to provide the

services older people

need.

Personal fnance

Twelve million

people hal the

UK workorce are

putting nothing asideor old age. Only 47

per cent o men and

38 per cent o women

contribute to a private

pension scheme.

Personal fnance

When pensions wereintroduced in the 1900s

there were 22 people o

working age in Britain

or every retired

person; in 2024 there

will be ewer than

three. This worsening

dependency ratio

could have serious

consequences or

personal and public

fnances.

Social inclusion

Just under a third o

all pensioners live

on or close to the

poverty line. TheUK has the highest

rate o avoidable

pensioner deaths

due to winter cold in

western Europe. The

unemployment rate o

those aged between 50

and the state pension

age is much higher

than the rest o the

working population, at

more than 30 per cent.

Social inclusion

These actors,

unchecked, will

urther serve to

exclude many

older people rom

mainstream society.

There could also be

deep social divisions

and generational

tensions as a

result o the higher

dependency ratio o

working taxpayers to

pensioners.



6/1606

INNOVATION FOR

AN AgeINg SOCIeTY

Extra care developments

Extra care developments are sel-contained homes

designed or specifc needs that provide on-site support or

independent living. They oer the security o accessible

services without the stigma o residential care. Hartfelds

retirement village in Hartlepool is one example. It oers

a series o apartments and cottages or sale or rent which

are in close proximity to purpose-built leisure acilities

and health and wellbeing services. Its development is

a result o the combined expertise o a housing trust, a

local authority and a local primary care trust.

Finn Age

In Finland, ollowing an economic crisis in the early 1990s,

there was a concerted eort to improve opportunities

or older workers. The Finn Age programme monitors

the physical, mental and social demands created by an

individuals work and their personal resources to cope

with these demands and then provides advice and

support to prolong working lie. Occupational health

services are the main source o medical treatment or

the working population and their amilies.

Tunstall

Tunstall a global company providing telehealth

care is engaged in a partnership with Fold Housing

Association, Housing 21, DigiTV and the University

o Shefeld to develop a Virtual Extra Care Service

(VIRTEx) with local communities. The programme

aims to build a virtual community o carers and users

to improve community-based care. The project is

supported by unding rom the Technology Strategy

Boards Assisted Living Innovation Platorm.

Upstream

Upstream in Devon works with isolated older adults

in rural settings to re-engage them in society through

stimulating creative and social activities. It uses

mentors to identiy activities and remove barriers to

participation. This helps people to stay independent

or longer rather than become dependent on traditional

day services, so reducing the burden on the NHS and

social services. The scheme was developed through the

Partnerships or Older People Projects programme.

1 2

3 4

Examples o innovation

Innovation used to mean just brand new technology.

Now we understand it much more broadly. It can range

rom new products to new services, business models

or organisational structures anything that creates

commercial value or better meets peoples needs in adistinctively new way.

Innovation in public services whether supplied by

the public, private or third sector will be crucial to

meeting the challenge o an ageing society. Developing

and implementing radical new products, services and

initiatives or an ageing society is the only way we will beable to produce signicantly better results or people at

signicantly lower cost.



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Social inclusion

We need to increase the economic and social participation o older people, to the beneft o individuals and society. This means

supporting a longer, more gradual and more productive transition out o the labour market, through employment legislation,

incentives and workplace practices. It means a much stronger market in leisure and cultural goods and services or older people,

but also new orms o inormal and mutual support to help people prepare or a longer old age. Finally, it means ensuring a much

stronger voice or older people in local, regional and national decision-making.

07

Health and social care

Housing

The local environment

We need to deliver health and care services in a more aordable and equitable way. Services need to be transormed rom

remedial and reactive provision to preventative, earlier interventions. This means better responding to dierent individuals needs,

circumstances and choices. In the workplace, we need improved physical and emotional health management to reduce the number

o older workers leaving the workplace early because o illness and disability. In care services, we need to harness the ull potential

o inormal and community-based care, technology, and the equity in peoples homes.

We need much more lietime and adaptable housing suitable or an ageing population. The largest challenge is adapting the existing

housing stock through technology, innovative design and regeneration eorts. We also need to improve inormation and advice

services to support better individual housing choices, unlock capital in equitable and appealing ways, and drive the provision omore housing options or older people that oer a greater variation o clinical and social support and community engagement.

We need to create neighbourhoods that are saer and provide easier access to a range o services. This includes improving the

accessibility o public transport, particularly in adapting it or people with sensory impairments, and adapting cars to extend the length

o time that older people can drive saely. But in general we need to reduce the need or travel by ensuring a greater range o services

in local communities; such services need to be as responsive to local customer demand as the best supermarkets currently are.

Personal fnance

We need to ensure much better advice and support or personal fnancial decisions, and at a much earlier age so that people can

anticipate the costs o older age. This needs to include more help or people to understand complex systems such as long-term

care and benefts. Alongside this, products and services provided by fnancial institutions or older people also need to be

signifcantly improved.

The innovations we need

To meet the challenge o an ageing society, we will need to develop innovations that contribute to the ollowing objectives.

The overall innovation challenge in ageing is to help

people prepare more successully or older age, and to

support them more eectively in older age.

This is not just a matter or central government. A wide

range o organisations in the public, private and third

sectors will have to develop and deliver innovations to

meet this challenge. And individuals will have to accept a

greater responsibility or preparing or ageing.

But government can and must play a leadership role,

by: ensuring that policies and regulations stimulate

and support more innovation; providing unding or

innovations where necessary but also creating stronger

incentives or a range o innovators; encouraging the

adoption o successul innovations; and increasing the

public prole o the challenge o an ageing society.



8/1608

THe INNOVATION

SYSTem IN AgeINg

Demand

Positive strategies for active

ageing by UK central, Scottish

and Welsh governments

StrongKey: Medium Weak

Demand

Market for

Individual budgets, community care,

and patient choice present opportunities

for a more demand-led system

Inflexibility around retirement

policies and the pension age can

lead to isolation from economy

and society

Poor recognition of future

personal demands

National strategy for housing in an

ageing society sets out commitment

to lifetime homes

Emphasis on technology-led

innovation, but Link-Age Plus and

Partnerships for Older People are

developing new services

Strategy & objectivesCentral

Strategy & objectives

Current needs & wants Future needs & wants

Local Frameworks & regulations Funding

Frameworks & regulations

Policy

Users

FundingMarket data an

Techn

Equality

Coordination be

Incen



9/1609

Supply

novation

Specialist Advisers for Equity

Release established to provide

independent advice

Private and third sector providers have not

generally exploited the potential market for

innovation in ageing

Government intends to establish

a National Housing Advice and Information

Service to provide advice for older people

Local authorities are struggling with

their responsibility to develop new,

more integrated services

FundingPublic

sector

FundingPrivate

sectorLeadership & culture Practitioners

FundingThird

sectorLeadership & culture Practitioners

Leadership & culture

Delivery

Practitioners

formation

y

cess

en services

s

About this diagram

Organisations and companies will only develop and

deliver innovations i there is an attractive market or

innovation, in which strong demand is met by strong

supply. This doesnt just reer to whether companies can

make a good prot rom innovating; it applies to any

organisation rom the public, private or third sectors. This

diagram illustrates the strength o aspects o the supply

and demand or innovation in ageing. This creates an

overall picture o the innovation system in ageing.



10/1610

gAPS ANd weAkNeSSeS

IN THe INNOVATION

SYSTem IN AgeINg

Optimising each aspect o the

system is crucial to ensuring thatinnovation can be harnessed

to respond eectively to the

challenge, but there are some

signifcant weaknesses.

On the demand side:

Limited unding or broader innovation

There is limited and inconsistent support or the

development o innovative approaches in areas such

as housing, the local environment and social inclusion,

especially compared to spending on existing services and

initiatives.

The NHS dedicates 0.9 per cent o its budget to

innovation, in the orm o research, the NHS Institute or

Innovation and Improvement and the regional innovation

hubs. The Health Innovation Challenge Fund by the

Department o Health and the Wellcome Trust provides

100 million to develop technologies, devices and clinical

procedures, but this is indicative o the general emphasison technological rather than broader orms o innovation.

The Medical Research Councils lielong health and

wellbeing initiative unds interdisciplinary centres, and

15 million has been provided or Technologies or Health

to support collaborative R&D.

The Department or Work and Pensions the lead

department or ageing in UK central government has

no specic unds allocated to innovation, but 0.14 per

cent o its total 12.4 billion budget (excluding pension

payment transers) is spent on R&D. It has supported

some innovations, such as pilot programmes such asLink-Age Plus and Partnerships or Older People, to

develop broader and more eective services or older

people. Further, its Lean Programme is investigating how

eciency and improvement techniques (rst developed

in the automotive industry) can be used to streamline its

own processes.

The separation o health and social care budgets inhibits

support or more integrated approaches. In social

inclusion, integrated unding is similarly limited, although

money or local regeneration projects is increasingly

taking account o social inclusion objectives.

Further, individuals lack both the apparent willingness and

ability to pay or innovations. Many people lack sucient

nances in older age, because o a lack o private liquid



11/1611

assets such as pensions and savings, and shortalls in

state contributions. This is apparent in areas such as

housing, specically assistive technology and adaptations

to housing. The private sector can o course capture the

returns rom developing such innovations, but adoption

and diusion remain constrained by costs. Resource or

new build has also been hit by worsening property and

credit conditions, and in general the recession is likely to

aect the R&D budgets o companies.

In the local environment, ensuring a sucient provision

o services would demand massive investment.

Businesses have increasingly moved to out-o-town

superstores which require car ownership or integrated

transport services. Supermarkets have begun to adapt

to the changing demands o older people, and other

consumer goods markets such as large appliance outlets

are developing delivery, installation and removal services,

but in many cases these remain expensive.

Infexible planning, regulation and policy can constrain

innovations

In the local environment, infexibility in planningregulations can distort or inhibit innovation. This has led

to interventions such as dedicated (but unprotable)

transport services exclusively or older people, together

with reduced quality o service in domiciliary care

because o the cost o travelling across a large area.

Separate unding streams pinned to specic services

have also inhibited a more integrated response to

ensuring the environment meets the needs o older

people.

In health and social care, although clinical and social care

practitioners oten understand the changes required, theycan be constrained rom doing so by regulation as well

as a lack o support. In social inclusion, private provision

is constrained by infexible labour policies and a narrow

range o options or employment or older people.

In the market or innovation:

Lack o incentives or innovation

For example, in housing there are weak incentives or a

greater variety in housing options and or the design o

more attractive equity release products. In health andsocial care there are ew incentives or local authority

commissioners or private sector suppliers to explore

dierent ways o delivering services, although the

increasing role o the third sector is slowly improving this

picture.

In the local environment, private operators o public

transport lack incentives to ensure better services or

older people. Improving accessibility is expensive, and

meeting requirements that may be particularly important

to older people such as cleanliness, saety and sucient

personal space can add signicantly to operating costs.

This creates a vicious circle: ewer older people use

public transport and so it becomes less responsive to

their needs.

In personal nance, it is proving dicult to develop

nancial products that are both attractive to people

in middle age and suciently protable to private

providers. Similarly, the importance o advocacy services

to help people make intelligent nancial choices is clear,

but again stronger incentives are needed to attract

private providers to provide such services.

Poor or non-existing networks to transer new

approaches between localities and sectors

Knowledge exchange between organisations is poor. For

example, in housing there is no central orum or sharing

regional best practice in lietime housing. In health and

social care, services are delivered on a regional basis with

little interchange between dierent regimes. In social

inclusion, innovations such as extending employment or

improving work options or people at or near retirement

age tend to be limited to individual organisations. There

are ew shared approaches to increasing participation,

economic activity and community engagement amongst

older people.

Market data on what products and services older peoplewant are patchy

In health and social care, data about customer

requirements and the inormation available to customers

remains poor and uneven. Similarly in terms o social

inclusion, in contrast to younger consumers who are more

subject to customer proling. Many consumer-acing

companies have little to oer older people specically, and

a growing presumption that all consumers are comortable

with technology has the eect o alienating older people

rom mainstream markets still urther. Education and

inormation channels to relay advice to consumers are

increasingly delivered through electronic networks, towhich many older people do not have access.

On the supply side:

Local authorities are struggling with their responsibility

to develop new services

Local authorities are a ocus or the development o

more coherent and imaginative services because o their

range o responsibilities across social care, transport

and planning, leisure services, community saety

and participation. The Local Government Act 2000included wide-ranging powers or authorities to work

in partnership with other organisations to promote the

economic, social and environmental wellbeing o their

areas. They also need to meet the requirements o the

Comprehensive Perormance Assessment (also known as

Comprehensive Area Assessments) introduced in 2002,

including in their services or older people.

However, most council services still ocus on the minority

who require social care (excluding the invisible majority

who may end up vulnerable and isolated). While some

Beacon councils have demonstrated more integrated

approaches to older peoples needs, there is a lack o

innovative models or broader ageing well local strategies

that encompass not just those most in need o care but

the wider community across a uller range o services.



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STReNgTHeNINg

THe INNOVATION

SYSTem IN AgeINg

Government needs to drive a better understanding o

the business o ageing: how it cuts across a series o

markets, requires collaborative working and strategic,

integrated thinking. A key part o the challenge lies in

the way the organisational structure o government isarranged around services that are largely delivered in

isolation. The interdependencies between areas rom

health and social care to the local environment require

more integrated responses.

This could be achieved in part by creating a single hub

or ageing issues in central government that has the

spending power, infuence in Whitehall and excellent links

with private and third sector partners. Incentives should

be introduced to ensure that objectives and unding

across these systems are aligned.

Funding or innovation needs to be ring-enced and

arranged around common challenges o ageing rather

then aligned to departmental budgets. Integrated and

targeted unding will help to maximise nancial and

intellectual resources to innovate. UK central government

should create a 100 million innovation und or

innovation in ageing; the devolved governments should

create similar unds as appropriate.

Ring-enced unding or innovation across government

departments could be complemented with a cross-

cutting strategy to drive through behavioural changes

amongst individuals to prepare nancially or old age atan earlier stage.

We need a much stronger and

more diverse market in new

approaches products, services,organisations and initiatives i

we are to provide or an ageing

population. To build such a

market, a number o changes

are needed.



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People o all ages need to be encouraged to prepare or

a longer period o old age. Innovations to support this

could include wider use o pre-retirement health checks,

private retirement advisers or through networks with

which older people tend to have more regular contactsuch as pharmacies.

As a part o World Class Commissioning, primary care

trusts should be redening their role strategically as a

provider and a commissioner, and the NHS and social

care systems should be urther integrated to provide a

more inclusive service or older people.

Regulations and processes need to be adapted to

respond to the change in the provision o public

services where prescriptive supply is being replaced

with demand-led choice and personalisation. Support

or innovation also needs to be aligned to the changing

relationship o public service delivery, that is, innovations

will need to be seen to resolve some o the issues and

challenges aced by public services in responding to this

agenda. Equally, personalised budgets are one potentially

powerul mechanism to engage service users to drive

innovation.

Improve transmission mechanisms to enable sharing

o successul innovations and best practice between

organisations, dierent markets and across regions.

Across markets, successul innovations are not being

scaled-up or adopted systemically because thetransmission mechanisms are inadequate. This is mainly

the result o a lack o channels and dialogue between

public, private and third sector organisations.

Government needs to improve its understanding o what

drives behavioural change amongst older people. High-

quality customer data will be increasingly important to

enable eective innovations. But the best way to produce

innovation is to engage older people in designing anddelivering new products and services. Further, innovative

approaches to make inormation more accessible will

be increasingly important to support older people.

In a stronger market or innovation, as the number o

products and services increases and choice becomes

more complex, older people will need access to high-

quality inormation and advice through channels they can

trust.

The transition out o the labour market or older people

should become more fexible. Norms around retirement

need to change. Older people need to be incentivised

to stay at work longer, and a robust business case or

retaining older workers needs to be built with employers.

Finally, ageing as an issue needs a greater prole, and

older people need to be better represented at a political

level and in communities. Again, government has to take

a leadership role here. The issue o ageing has relatively

little media and political attention compared to health or

education, and as a result it is not treated as a particularly

urgent issue by public institutions, the private market

or society generally. Increased awareness could engage

more organisations including successul innovators rom

other sectors to consider the challenges and develop agreater breadth o innovations.

13PREPARING FOR AGEING


14/1614 PREPARING FOR AGEING

OPPORTUNITIeS OF AN

AgeINg SOCIeTY

Despite the signicant demands o an ageing society, it also represents a massive opportunity

to strengthen our economy and our society. The UK is not the only country acing this challenge.

How we respond should be seen as one o the major competitive as well as cultural challenges o

the 21st century.

It is also worth remembering our existing assets as we ace this challenge. In particular, older

people hold a number o trump cards:

In just over 15 years, older people will represent the majority o the population.

They already vote in greater numbers than young people (75 per cent o those aged 65 and

over voted at the last general election, compared to 37 per cent o people aged 18 to 24).

Sixty-nine per cent o 65-74 year olds and 66 per cent o over-75 year olds own their own

homes outright.

Older people own 80 per cent o the private wealth o the UK, with over-65 year olds

controlling 460 billion in unmortgaged equity alone enough money to und the NHS or

ten years.

Over the last two decades, consumption by Europes over-50 year olds has risen three timesas ast as that o the rest o the population. For example, over-50 year olds buy 80 per cent

o all high-end cars.

Recognising the potential o new products and services in what is undoubtedly a growing

market, we could:

Develop a stronger, more positive vision o an ageing society.

Provide new, more ecient services or older people, particularly ocused on the prevention

and delay o issues associated with ageing.

Better prepare younger generations or the demands and diculties o growing older.

Ensure a much greater visibility or older people in politics, society and culture, and a

renewed respect between generations.

Create a virtuous circle, with greater independence and health at older ages, containing the

demands made on public services so that more resources can be invested into preventative

and preparatory provision.


15/1615PREPARING FOR AGEING

Age UNLImITed

The challenge o an ageing society will be one o the initial themes or

NESTAs public services innovation Lab. This is our Age Unlimited programme.

The Lab will identiy, test and demonstrate important new services we need

or an ageing society. In particular, the Lab will ocus on services that help to

extend work and social participation or people aged 50 to 75.

Our work will have three main strands.

First, how individuals in their ties can be helped to age well and exercise

choice beore these become too constrained. We call this age-readiness.

We will tap into user-centred innovation in order to increase the chances

o understanding culture and behaviours well enough to change them. Our

hypothesis is that participation will be key to nding new ways to engage

this group.

Second, how employees can strike up very dierent kinds o negotiation

with their employers. What models can help them plan candidly to balance

more requent and persistent health problems, changing motivations, and

productive and valued work?

This strand o practical trials aims to crack open these processes o age

management there is a growing international body o experience to t

them or widespread uptake in the UK. It will also help us build models o

user-centred innovation.

Third, creating more stimulating alternatives to traditional paidemployment, such as social entrepreneurship or community sel-help.

This strand will utilise and develop incubation processes, advice, support

and seed unding to systematically develop promising new ideas and bring

the best to market.

The Lab will work with a wide range o decision-makers and organisations to

spread proven methods o innovation.


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NESTA

1 Plough Place London EC4A 1DE

[email protected]

www.nesta.org.uk

Published: April 2009

preparing for ageing

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