Councils will struggle to cope with the financial challenge posed by England’s ageing population and may miss opportunities to innovate and save, says a new report from the Audit Commission.

Under Pressure says most councils do not know enough about the costs of their ageing population. They may also miss the savings that could flow from preventive services and better work with other organisations ‘Most older people live at home, not in care homes. And the longer they do, the happier they are and the less they cost the taxpayer. Innovative, personalised services mean older people stay independent longer, saving public money.

The Commission warns that councils are facing huge financial pressures in the years ahead, but redesigning services and exploiting technology can make them better, more efficient and more personal. Some councils are showing the way, tackling the causes of ill-health and social isolation, reducing the need for expensive social care and helping people live well in later life.

The report says councils need the right information to help make the right decisions. The needs of older people must be a central part of their plans for all local services, and they should involve the people themselves in developing services.

The report quotes examples of providing quality services at lower cost. They include equipping a farmhouse to help a daughter and son-in-law look after a relative with dementia. The cost was less than one month’s residential care. Flexicare housing allows people with fewer care needs to move into specialist housing, helping health and wellbeing. It saves about half of the annual average cost of £24,786, of someone living in residential care.

An ageing population also provides opportunities. Older people are often more involved with their local communities and more willing and able to volunteer. Sixty-five per cent of volunteers are aged 50 or over. Eighty-five per cent of older people do not use care services, but they do use general council services.

Responding to the report, Stephen Burke, chief executive of Counsel and Care, said: “The Audit Commission’s report highlights good practice by councils in responding to their ageing communities. But the variation between councils is unacceptable. Why should some care services cost three times more in some areas? And why can’t all older people get practical support in and about their home? “