Headlines: September 8th, 2004

Spending on long-term care for older people is set for a four-fold increase by the middle of the century as the number of people living into their late 80s and beyond goes up and real care costs rise, according to new projections.

The predictions are based on the latest official population projections and have been prepared for the Joseph Rowntree Foundation by the London School of Economics and the University of Leicester. They suggest that spending on care will need to rise by 315 per cent in real terms between 2000 and 2051 to meet demographic pressures and rising costs. The figures assume that dependency rates, patterns of care and funding arrangements remain unchanged.

The researchers project that spending on long-term care would rise from around 12.9 billion pounds in 2000 to around 53.9 billion by 2051. Allowing for an expanding economy that would mean the proportion of national income spent on care would rise from around 1.4 per cent in 2000 to around 1.8 per cent in 2051. They emphasise, however, that alternative assumptions yield a range of uncertainty around this central projection.

The findings also show that keeping pace with demographic change will require the number of places taken in residential care and nursing homes as well as hospitals to rise from about 450,000 to 1,130,000. The time spent by home care services on older people in their own homes would go from around two million to almost five 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. Political decisions on public spending will also have an impact. The researchers estimate that if free personal and nursing care had been introduced across the whole country in 2000 spending on long-term care would immediately have risen by more than a million pounds a year. They say too that if the number of dependent older people does not rise as rapidly as their central projection assumes then, even with free personal care, the proportion of national income spent by the state on care might not be much higher in 2051 than it is today. The report also shows that the introduction of free personal care would be of greatest benefit to care home residents with higher incomes.