Bill for free health care set to soar

Published on 28/04/2008 22:25

THE cost of Scotland's flagship free elderly care policy will soar more than threefold to £813 million a year by 2031, a new report has revealed.

A dramatic growth in the number of pensioners over the next three decades will send costs, put at 256 million in 2006, spiralling, Lord Sutherland's report shows. And the author warns that Scotland must wake up to the huge impact the country's rapidly changing age profile will have on public finances and services.

Free personal and nursing care was introduced to a fanfare in 2002. It has been hailed as one of the biggest achievements of Scotland's devolved government, and is the envy of many south of the Border. But the independent review, commissioned by the Scottish Government last summer, reveals the price that such a popular policy will have in years to come.

The report says the bill will far exceed initial predictions – costing hundreds of millions of pounds more – due to the number of elderly people rising more rapidly than was expected.

Lord Sutherland insists the policy, which has attracted widespread political and public support, will be "affordable" in years to come.

The number of over-65s is expected to rise from 837,000 in 2006 to 1.36 million by 2031.

Lord Sutherland says such a dramatic increase means it is imperative that government leaders establishes a "long-term vision" for confronting the challenges of an ageing population, amid fears that Scotland is walking blindly towards a demographic time-bomb.

His report, published yesterday, states: "In the longer term, the consequences of the demographics will reach far beyond this policy and require much greater transformation of long-term planning and policy making. They will have a huge potential impact on many areas of public policy and expenditure, such as healthcare, pensions, housing, transport, social security and benefits."

He revealed the policy was already suffering from a funding shortfall of 40 million a year, caused, in part, by greater than expected demand for free personal care since the policy was introduced five years ago.

Warning of the impact of Scotland's ageing population, Lord Sutherland yesterday said: "It may seem 40 million is quite a large sum of money. But ... the amount of money for public sector pensions was estimated in 2005 at 18.7 billion.

"The pensions spend in the most recent year was 21.4 billion.

"(That means] the increase in pensions alone in less than three years was 2.7 billion.

"That's demographic change for you."

He added: "The sums of money that will be spent in different ways in our society because of demographic change are enormous."

They "overshadow" the money being spent on free personal care for the elderly.

The Scottish Government, with its experience of free personal care, was well placed to adopt this "long-term" approach "in the same way they're being forced to look at climate change", Lord Sutherland added.

"In Japan they're doing this, Japan has the most significant demographic issues to deal with, and in other European countries they will be forced to begin to. We've started in the UK and the government are aware of some of these issues, but mostly in the care area."

But pensions, retirement age, housing, transport, work-life patterns over 40 years and health care were all at the heart of the problem, he added.

Henry McLeish, the former Labour first minister, who was responsible for introducing free personal care for the elderly, told The Scotsman that "tough choices" would have to be made if his flagship policy was to survive in years to come.

"We should recognise that the demographics mean approximately 900,000 people over 65 will rise to nearly 1.4 million in 20 years' time. That means more than one in four of the population will be of retirement age.

"We need to recognise this debate on free personal care is only one part of a much bigger debate we seriously now have to address."

Lord Sutherland's review was commissioned last summer by Nicola Sturgeon, the health secretary and deputy First Minister.

Lord Sutherland, a former Edinburgh University principal, who chaired a Royal Commission into elderly care that preceded the introduction of the policy, was tasked with examining its delivery and implementation five years after it was brought in.

Following the most comprehensive ever review of the policy, Lord Sutherland declared free personal care to be "working well" for thousands of frail and vulnerable older people.

But his report highlighted "serious concern" over differences in the way the policy was being implemented across the country, with some people suffering unacceptable delays for publicly funded nursing care while others were accessing it immediately.

Lord Sutherland said the Scottish Government needed to find extra money now to "stabilise" the policy and ensure everyone got the same quality of care.

Ronnie McColl, health and wellbeing spokesman for the Convention of Scottish Local Authorities, welcomed the review.

"While the report is correct to point to some of the challenges facing the policy – for instance, the long-term impact of demographic change – we are committed to working in partnership with the government to address these," he said.

Ms Sturgeon said the review confirmed that the policy was delivering benefits for thousands of older people.

AT A GLANCE

LORD Sutherland's review found the total bill for free personal care will rise from 256million in 2006 to 813million in 2031.

A combination of soaring demand as a result of Scotland's ageing population, and increased labour costs, lie behind the massive projected rise.

When the legislation was passed in 2002, the anticipated costs were expected to be far lower – 137million last year rising to 227million in 2022.

Based on the report's fresh projections, free personal care will, by 2031, cost about 1.50 in every 100 of Scottish Government spending.

Currently, about 90p of every 100 of public spending in Scotland goes on free personal care.

His report revealed that the percentage of national wealth devoted to caring for elderly people is likely to increase from 2.6 per cent to 4.5 per cent over 25 years.

The report also reveals how much each of Scotland's 32 councils are spending on free personal care in Scotland. Edinburgh comes top of the table, with nearly 32million spent on free personal care in 2005/06.

Next is Glasgow, which spends more than 25 million.

The number of pensioners will grow from 837,000 in 2006 to 1.36million by 2031.

DIFFICULT TO DEFINE

THERE is widespread confusion over what "free personal and nursing care" actually means.

A Royal Commission which examined the issue in 1999 stated that "personal care" includes care related to washing, eating and drinking, and managing bowel and urinary functions, problems with immobility and prescribed treatment, and ensuring personal safety.

The picture is blurred further by a lack of clarity over what "nursing care" means.

Lord Sutherland's report highlights inconsistencies in the way local authorities approach the issue of "personal care".

For example, eight of Scotland's 32 councils charge elderly people for food preparation.

Lord Sutherland revealed that every local authority had now agreed to meet this cost, which includes the delivery of meals to old people's homes.

Edinburgh City Council has decided to go even further by agreeing to refund those elderly people who have previously been charged for this service.

One of the 12 recommendations in Lord Sutherland's report is a move to end this confusion.

His report states that the government should "renew efforts to improve public information and understanding of the policy".