Grey Matters

THE UNINVERSITY OF HULL

Grey Matters A qualitative and quantitive analysis of the

impact of the ageing population

201103734

6/29/2014

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201103734 Lord Norton of Louth Word Count 6817

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Contents Introduction ............................................................................................................................................ 2

Aims and hypothesis ............................................................................................................................... 4

Methodology ........................................................................................................................................... 5

Relevance ................................................................................................................................................ 5

Analysis ................................................................................................................................................... 6

Economics ........................................................................................................................................... 6

Pensions Data .................................................................................................................................. 6

The Grey Pound .............................................................................................................................. 7

Conclusion ....................................................................................................................................... 8

Employment ........................................................................................................................................ 9

Pension age reform ......................................................................................................................... 9

Employment Generated by the Elderly ......................................................................................... 10

Conclusion ..................................................................................................................................... 14

Transport ........................................................................................................................................... 15

Health ................................................................................................................................................ 18

Conclusion ............................................................................................................................................. 20


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Introduction

Dr J Finlay Alexander once wrote that “on looking through some old death certificate books, I found

one of 1945 in which the ages seemed to be unusually high” (Alexander, 1950). Though this was

originally examined as far back as 1950, the issue, and potential impact of, and ageing population

are still relevant today.

As figures 1, 2 and 3 show, it is irrefutable that the population of the England and Wales (and by

extension we assume the entire United Kingdom) has not only increased over the past one hundred

years, but the demographics have changed significantly. However, it is interesting to note that the

population of those over a certain age has dramatically risen over the past century, with their

proportion of the population significantly increasing.

Figure 3: Population of England and Wales 2011 (BBC, 2012)

Figure 1: Population of England and

Wales 1911 (BBC, 2012)

Figure 2:Population of England and

Wales 1961 (BBC, 2012)


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Table 1 further examines this information, which demonstrates the extent of the effect more

commonly known as the ageing population.

1911 1961 2011

Total Population 36,100,000 46,100,000 56,100,000

Number of people over 65 years old 1,878,388 5,496,018 9,212,200

Number of people over 75 years old 518,021 1,975,568 4,359,500

Number of people over 85 years old 63,928 301,505 1,244,000

Those over 65 as a percentage of the

population

5.2% 11.9 % 16.4%


population

1.4 % 4.3% 7.8%


population

0.2% 0.7% 2.2%

Table 1: Showing increases in the number of people over the age of 65, over the last 100 years

As we can see, the gross number of residents of England and Wales over the age of sixty-five

increased over five times since 1911, whereas the population as a whole has not even doubled. It is

irrefutable that the population of the England and Wales is

ageing, but the question still remains; how much of a

problem is such an ageing population.

When the Coalition came into office, the House of

Commons Library publish a report entitled “Key Issues for

the New Parliament” (Mellows-Facer, 2010), and one of

the issues the authors identified was ageing population. As

is shown in Figure 4, the issue of the ageing population is

predicted to worsen over the next 20 years in terms of raw

numbers. This project aims to find out if such an ageing

population is a ‘problem’, or simply an ‘issue’.

Figure 4: Projection of the Ageing Population

(Cracknell, 2010)

Comment [A1]: Taken from BBC Census data


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The cost of the UK having these demographics is outlined in figure 5. As we can see, the amount of

money spent on the state pension (administered to all those over the age of sixty five) is not only

almost half of the welfare spending in Great Britain, but it is over ten per cent of total government

spending.

Figure 5 Government spending 2011/12 (Rogers, 2013)

Aims and hypothesis

The principal objective of this research is simple;

Are the face value economic burdens of having an ageing population, negated by the

benefits that such a demographic arrangement brings?

It would appear on the face of it, it real cash terms, that those of a certain age are a detriment to

society, rather than an asset. However, through assessing the more subtle ways in which the ageing

Comment [A2]: Rogers


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population, this research aims to discover whether pure cash terms are a reliable factor in

determining the impact of the ageing population. From that aim, the hypothesis would become;

Although gross expenditure within the welfare system would makes it appear that the ageing

population isn’t economically sustainable, upon further analysis of more factors, the ageing

population will appear to be widely beneficial.

Methodology

With the amount of possible factors to analyse, it would be impossible to assess every net benefit

and cost that an ageing population had on the economy. Therefore, the research will be broken

down into four general categories: Transport; Health; Employment; and Economics, and a general

assessment of each will be used to determine whether or not the current trend in the ageing

population is a benefit or a burden. These five categories will be analysed through a variety of

secondary analysis based on primary data, provided by organisations relevant to each of the topics

mentioned, such as the Office of National Statistics, the House of Commons Library, and the

Confederation of Passenger Transport and so on. Previous literature on the ageing population shall

be utilised to compliment the research throughout.

Relevance

The research conducted in this project is relevant for two main reasons: austerity measures, and

disproving ignorance. Firstly, in an periods of austerity, such as the one the Government is claiming

we are in now, overall government spending has to be cut. Everyone has their differing opinions as

to where the axe should fall with these cuts, but it is often the case that the public feel they should

fall to those who are perceived to be underserving. This is exemplified in a YouGov poll, in which

74% of the population supported the Coalition capping benefits at £26,000 for those who do not

work (Kelner, 2013). However, it very seldom that people question pensioner benefits in the benefit

debate, despite these being a substantial state hand-out. This research aims to see if reductions in

such benefits need to be made, if the contribution that the older generation make to society is

considerably lacking.

The public often also have a misguided view on how welfare in this country is divided up amongst

those in receipt of it. In a recent survey conducted by YouGov on behalf of the Trade Union

Congress, it was found that despite only 3% of the welfare budget being given over to those

receiving unemployment benefit. Those that were surveyed believed that this figure was around the

41% mark, thirty eight percentage points higher than the actual figure (YouGov/TUC, 2012). This


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ignorance of the real numbers allows us to infer something about the impact of the ageing

population; the general public do not know just how great the proportion of the welfare budget is

taken over by pensions. Without this information being common knowledge, the face value

economic impact remains unnoticed, and may continue to do so until the spending is out of control.

Therefore, this research is relevant not only to quell the myths of where the welfare spending

actually goes, but to then debunk the myth that the elderly are receiving something for nothing.

Analysis

Economics

Taken at face value, having a larger percentage of people of older generations in your society,

particularly a society with good welfare provision, there is likely to be a significant increase in the

percentage of GDP spent on pensions. However, just as this spending is likely to be on the rise due to

more elderly people, there are now more people of elder generations putting into economy as well,

which has become known in the vernacular as “The Grey Pound”. The question is whether or not the

increase in the amount the ageing population take from the state in terms of pensions, is

counteracted by their contributions to the economy through their spending.

Pensions Data

As Mirrelles notes

“The common fear is that is that the sustenance and care of the elderly will become an

increasing and eventually heavy burden on the ‘productive’ members of society……the

apparent problem takes the form of projections of strongly rising contributions to the social

security” (Mirrlees, 1997)

To assess if this statement has any grounding in reality, one should examine pension data over a

period of time. To examine the amount we spend on pensions at a fixed point in time would not

offer a very clear interpretation of what the effect an ageing population actually has. Therefore, an

overtime analysis of such data is required. To keep an easy comparison between the census data

shown in figures 2, 3, and four, the following data has been sampled from the years 1910, 1960, and

2010.

In 1910, the UK Government at the time spent £341.4 on overall spending, £900,000 of which was

on pensions (Chantrill, 2014). This is approximately 0.2% of total Government spending. By 1960,

total government spending was £9.1 billion (Chantrill, 2014), over twenty six times higher than it was


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fifty years previously. In the same time period however, spending on pensions increased to £746

million (Chantrill, 2014), which is not only more than double total government spending fifty years

previously, but is an incredible eight hundred and twenty eight times as high as in 1910. This also

equates to approximately 8% of total Government spending. By 2010, the Government is spending

£672 billion (Chantrill, 2014)in total, a growth of seventy four times the amount seen in 1960. In the

same time period pension spending has increased 17% of overall spending, to £116 billion (Chantrill,

2014), a growth of one hundred and fifty six times that of 1960 levels. As this data demonstrates, the

rate at which Government spending on state pensions increases is substantially higher than the

amount at which overall Government spending increases. If this trend continues (the trend being an

average of a further 8% of GDP every fifty years), by the year 2050, almost a quarter of all

government spending could be on state pensions, which is obviously an unsustainable situation.

This data clearly shows that the elderly generations that are the product of an ageing population are

getting a considerable amount of taxpayers money spent on them. However, is it fair amount when

compared to, for want of an example, the younger generation? As the research previously showed,

that over 70 years of age in Britain, make up 11% of the population, and through the state pension,

they are receiving approximately 16% of overall spending. On the converse of this, those between

ages 4 and 18 (those of compulsory schooling age) make up 17% of the population (BBC, 2012), and

yet the funding they receive is disproportionately allocated. The Education budget, which can be

argued to be an equivalent to the pension’s budget for those of schooling age, is only £88 billion

(Chantrill, 2014), four percentage points lower on overall spending than that of pensions.

We can therefore come to the conclusion that not only do the elderly receive a substantially amount

of ever increasing social security, but they also receive more than their fair share when compared to

the other ‘non-productive’ members of society. This is further reinforced by a report produced by

the Reform Research Trust entitled “Old and Broke” (Cawston, et al., 2011). The report discovered

that while in the five years between 2011 and 2016, the number of over 65s will increase by

1.4million, whereas the number of working age people under the age of 50 will actually decrease.

Therefore, the economic implications of the ageing population, if the demographics remain at their

current trajectories, do not bode well for the economic outlook of the UK.

The Grey Pound

Usually, when assessing the economic impact of the ageing population, it is normally the case to

focus on welfare provision through pensions. Too much time is spent is focussed on what the

increasing elderly population take out of the economy, and not enough is focussed on what they


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contribute. If their contribution to society outweighs their state pension welfare receipts, then in

pure economic terms, the impact the ageing population has could be seen as a positive one.

In recent years, a term has entered into common usage when used to describe the consumer

spending power of those of a certain age. Although no set definition exists, the so called “Grey

Pound” is often used to describe the spending habits of those of the elderly generation, usually

those over 50, and it recent years its value has increased dramatically.

It was reported as early as 1997, that not only was the Grey Pound becoming a considerable

economic force, but that the over 50s were “one of the most affluent groups in society” (The

Independent , 1997). Considering this was taken from an article over sixteen years old, one could be

forgiven for dismissing its findings as irrelevant. On the contrary, the trend seems to not have

dissipated, but become exacerbated by the further increase of elderly people due to the effects of

an ageing population. According to Peter Gore, Professor of ageing and vitality at Newcastle

University, the over 50s hold approximately 80% of the nation’s wealth, and are responsible for over

40% of all consumer spending. To put in real terms, that figure equates to almost £260 billion of

consumer spending (Gore, 2012). Considering in 2011, those over the age of 50 only made up a

third of the population (BBC, 2012), and those over 65 only a sixth, the elderly are punching above

their weight when it comes to contributing to the economy. When it comes to a direct comparison

with the £116 billion spent on state pensions for the over 65s, Gore states that the net contribution

of that particular demographic is approximately £40 billion a year (Gore, 2012).

This phenomenon of the Grey Pound has been further reinforced by a recent report from the

Institute of Directors. They are informing their members that the over 50s, (which as we have seen,

are worth 80% of the country’s wealth) are only subject to about 10% to marketing focus, which

they rightly state is a “missed opportunity”. If the population continues to age in this way, and the

demographics continue to shift, marketing will eventually move to incorporate these new

consumers. This is only going to further increase the net contribution the elderly make to society,

which infers that an ageing population, if it is harnessed in the right way, can only be beneficial.

Conclusion

It is clear from the statistics, that in raw economic terms, the elderly are contributing substantially

more to the Treasury then they are taking out of it. In this regard, it cannot be argued otherwise that

the benefits of an ageing population outweigh the costs.


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Employment

When society thinks of the elderly, it would not be to assuming to think of them as non-working

individuals that rely on the state for their care. Obviously, if this is the case, it would be reflected in

the pension system, and the welfare system. However, given the recent state pension age changes,

and the amount of potential employment that is offered by the elderly themselves, it wouldn’t be

too presumptuous to think this was no longer the case.

Pension age reform

Up until recently state pension age was sixty years of age for women, and sixty five years of age for

men, and this reflected the demographics of when people were generally seen to be too old to work.

State Pension age was more or less synonymous with when people retired. However, a series of

announcements, brought forward by the current Coalition government, have sought to alter this.

The first of these announcements came in 2011, when compulsory retirement at 65 was abolished,

and phased out in the April of the following year (BBC, 2011). With this alteration, there was no

longer a need for companies to shed employees over a certain age, and therefore these people

could continue working. Without any restrictions on age, the ageing population could continue work

without fear of mandatory dismissal. With this legislation in place, and the ageing population trend

showing no signs of easing up, it will allow people to continue working. This means more tax and

national insurance contribution will be paid by the elderly for longer periods of time. As we have

seen from the previous analysis, the tax take is higher from the elderly then their relative costs, and

with legislation like this being introduced, the amount they cost in pensions will decrease, and the

amount the contribute will increase. All in all, this change represents a win-win scenario for the tax

payer.

Further to the announcement of abolishing compulsory retirement, came the announcement in

George Osborne’s 2011 Autumn Statement (The Chancellor of the Exchequer, 2011), where

increases in the state pension age were announced. Further announcements have also been made

over the course of this Government, in particular in the 2012 Queen’s Speech, which stated that

State Pension age will be extended to age sixty six for both sexes by 2020, and will be further

extended to sixty seven by the year 2028 (HM Queen Elizabeth, 2012). Along with further extensions

planned, to sixty eight in the mid-2030’s and sixty nine in the late-2040’s (and with certain sources

saying it could rise to be seventy years of age by the 2060’s (Hyde, 2011))one thing is clear; Britain’s


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elderly are going to have to work longer. The main reasoning behind this is simple; the Government

has recognised the population is ageing, and altered the public finances accordingly. The Chancellor

defended his decision to rise the State Pension age by saying that

“The reason we do this is because our country is getting older and we want to go on being

able to afford really pensions for people. There is not a bottomless pit of money.”

With these changes taking place, it is not only clear that more elderly people will be employed for

longer due to them not being able to receive State Pension, but also that the issue of the ageing

population has been addressed accordingly by the current Government. The elderly, who will now

have to work for more time before being in receipt of State Benefits, will seem less of a burden on

society.

Employment Generated by the Elderly

It is now apparent that more elderly people will be working longer and, therefore, directly

contributing to the economy through their tax take for a longer period of time. However, due to the

growth in what the Institute of Directors refers to as the ‘oldest old’ (Insitute of Directors, 2014) the

ageing population also contributes more indirectly to the economy too.

As an individual gets older, especially when they reach their eighties and nineties, they become

increasingly reliant on others for the most basic of needs. As we saw earlier, in the last one hundred

years, those over the age of seventy five have increased almost eight times, which meaning that this

increasingly reliant segment of the population has vastly gone up. To analyse what impacts this new

found reliance on others has, this research aims to analyse perhaps the biggest way in which this

new found phenomenon has an indirect effect on the economy; care homes. Care homes are

normally viewed as the paragon of elderly reliance, and due to the ever increasing older

demographic, they are being used more and more. To fully assess their impacts, a number of

measures have been taken.

Although there may be more, the website ‘carehome.co.uk’ lists just over 20,000 care homes in

England (Carehome.co.uk, 2014), and for the purpose of this research, figures obtained from this

website shall be used as though they represent all care homes. To ascertain the information, phone

calls were made to four care homes in each region of England (as according to the website, there are

fifty three regions of England, which lead to two hundred and twelve care homes in total). The figure


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of two hundred and twelve is very handy for research purposes, as when times by a hundred, it

creates a number (21,200) which is close to the total number of care homes listed on the

carehome.co.uk website. Therefore, any total figures and averages can be estimated using this

general rule. Although this data is only collected from England, as opposed to the four constituent

parts of the United Kingdom, using basic laws of averages we can make the assumption that what

applies to England, (which makes consists of 84% of the total population of the United Kingdom) can

also be applicable to the rest of the UK. By applying percentage rules to the figures given below, this

research will be able to determine data approximations for the entire United Kingdom, based on the

figures supplied by England.

The following four questions were asked of all the care homes contacted:

1. How many residents are within your care?

2. How many staff does your organisation employ?

3. How long does the average resident remain within your care?

4. What is the weekly rate for one of your residents?

The first question shows just how prevalent the issue of an ageing population is. Although it is

impossible to know the exact age distribution of those who are resident in care homes, we can safely

assume that a majority of individuals will be over the age of seventy five. This question can

demonstrate, on certain assumptions, just how many people of a certain age group rely on care

homes. If this demographic of the population is set to continue increasing, we can safely assume

that the money generated by this sector, will continue to increase also.

The second question was asked as this allows us to ascertain how many people are directly

employed by organisations that can only expect to benefit from an increase in elderly demographics.

It is perhaps only due to the way demographics have become distributed in recent decades (where

population pyramids have become more ‘top heavy’) that even allowed care homes, and

subsequently there employees, to come into fruition in the first instance. The mathematics is simple:

the higher the proportion of the population is the ‘oldest old’, the more people will be needed to

take care of them.

The third question is simply to determine how many additional years those who reach a certain age

need caring for, and by extension, how many years of potential employment each elderly individual

can provide.

The fourth and final question provides the information which is essential to this section of the

research. From the information provided here, this research will be able to derive just how much, in


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net figures, just how much the care home population contribute. If this figure is sizeable, then this

research can show that the elderly, who are now not only contributing directly through working

longer, are also contributing indirectly through providing jobs for the ‘independent’ population.

A full table of all data that was collated for these questions can be found in Appendix 1; the figures

referred to for the remainder of this section shall all be based on those figures, but will

predominantly be averages, rather than the entire data set.

The total number of residents that were said to be staying in the contacted care homes is 8,707,

which when scaled up to reach the total number of care homes needed to assess the situation

nationwide, means there are approximately 870,700 elderly people using care homes across

England. When multiplied again, it infers there will be approximately 1,036,500 using care home

across the UK. If we assume that everyone who falls into this category is at least over the age of

seventy five, then we can infer that almost a quarter (24%) of the this particular demographic of the

population is in a care home. As the ageing population continues to expand, it becomes obvious

that not only will this number increase in gross figures, but it will also increase in its percentage.

The implication that almost a quarter of those over seventy five shows highlights one thing; the

dependent are becoming an increasingly larger amount of our population. If, as the case is normally

perceived, these dependents are becoming a burden on society, and increasingly so, this is obviously

a bad thing. However, as this research intends to prove over the next few paragraphs is that the

direct opposite is true.

From the care homes that were contacted, the data collection discovered that some 12,787

members of staff were employed. By the same multiplication factors as used above, this indicates

there would be approximately 1,278,700 staff employed across England, and therefore 1,522,200

are employed by the care system in the entirety of the United Kingdom. Although this seems like a

high figure, It may be possible that certain staff members are duplicated, as they are in the employ

of so called ‘Care Groups’, rather than individual retirement homes, so a revised figure of

approximately 800,000 can be assumed for the purpose of examining the impact of the ageing

population. If we consider that the latest figures show the number of people in work is just short of

30 million people (29.81 million (Department of Work and Pensions, 2013)), this implies that the

care home sector alone, is responsible for almost 2.5% of all employment in the United Kingdom.


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Again, as with before, if the likelihood that the ageing population is going to continue to increase

year on year, then two things will occur: The dependent population ratio1 of the UK, which currently

stands at 66, will increase over time; and the amount of jobs therefore created, by both the increase

in the elderly population and the relative decrease of the working population will substantially

increase. This, in its own right, can only be beneficial to society as a whole, if a much higher

proportion of those able to work remain in work.

Table 2: Job availability and salaries at various care homes

The jobs that are created by the effect of the ageing population in this situation are also not low paid

jobs, when averaged out across the different fields, and according to their proper weighting. Table 2

demonstrates how this information was ascertained.

1 The dependent population ratio is the ratio of the population defined as dependent (the population aged 0-19 and 65 and over) divided by the population 20-64, multiplied by 100 (OECD)

Managers

Deputy

Managers

Regional

Managers

Nurse Team

Leaders Nurses

Senior

Carers

Domestic

Assistants

Job 1 £21,680 £30,000 £60,000 £32,000 £26,220 £19,500 £12,500

Job 2 £30,000 £30,000 £75,000 £31,000 £27,300 £17,778 £11,600

Job 3 £33,000 £34,000 £70,000 £30,000 £32,175 £16,000 £15,000

Job 4 £39,000 £15,000 £80,000 £28,000 £24,000 £18,500 £14,700

Job 5 £35,000 £18,000 £65,000 £33,000 £31,200 £16,325 £17,500

Sub-Total £158,680 £127,000 £350,000 £154,000 £140,895 £88,103 £71,300

Average £31,736 £25,400 £70,000 £30,800 £28,179 £17,621 £14,260

Number of

Vacancies 283 95 9 51 611 86 73

Average*Vacancies £8,981,288 £2,413,000 £630,000 £1,570,800 £17,217,369 £1,515,372 £1,040,980

Overall Total

wages £33,368,809

Total Wages/Total

number of

Vacancies

£27,623


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Using job adverts found on carehome.co.uk, five jobs were chosen from each of the different

categories of job being offered. The reason five were chosen is to balance out the difference in

wages throughout the country, and as we can see form the table, wages vary substantially within

each of the individual roles. The average for each role was then found, and subsequently multiplied

by the number of vacancies the site had available at the time for each job role. This was to ensure

that the results weren’t unfairly skewed by the large salaries of regional managers for example, as

although their salaries are high, there are view of them compared to those tasked with the day to

day running of care homes. These figures where then combined together, and divided by the overall

total number of vacancies, produce the figure £27, 623. Given that the average UK wage is £26,500,

(BBC, 2012)the jobs that the care home sector provides are, on average, above that limit. So, not

only are there a vast number of jobs produced each year by the effect of the ageing population, but

they are jobs that pay above the national average.

Whilst on the subject of the monetary side of care homes, it is also worth noting how much the care

sector is worth as an overall sector within the British Economy. The fourth question that was asked

to all care homes contacted for the purposes of this research was ‘What is the weekly rate for one of

your residents?’ The data in Appendix 1 was sued for this, and when all figures obtained were

averaged out, it transpired that the average fee for a resident within a care home was £676 per

week. This works out to cost £35,152 per year per resident, and if we use the estimates provided

above, this would mean that the care of the elderly in residential care is an industry worth

approximately £36.5 billion each year. Clearly a very booming industry and one that is going to

continue to flourish as the population continues to age.

Conclusion

Although it may seem that the elderly are a burden on the employment market due to the

perception that they not only do not contribute themselves, but they also force a burden on others.

However, as this section of the research has shown, that is unequivocally not the case. New

legislation means that the elderly are able to work longer themselves, and this is a trend which is not

only irreversible, but very likely to continue increasingly. As the population continues to age, those

who were once considered to be the ‘dependent’ population will become part of the ‘independent’

population as time goes by. It has also become apparent that the label of ‘dependent population’

may have become slightly defunct. Although the ‘older old’ may be reliant or ‘dependent’ on those

younger than they are to provide care for them, but considering in doing this, they supply jobs for

almost one twentieth of the United Kingdom’s workforce, the dependency in mutual. Therefore, in

terms of employment, the ageing population is much more a benefactor then a burden.


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Transport This section of this research focusses on one particular area of transportation; the use of public

transport, primarily buses, by the elderly generation. As with the previous two topics that have been

analysed throughout this project, the topic of transportation when the elderly concerned is an

‘iceberg’ topic; on the face of it the perception is one thing, but there is a lot more to the topic that

meets the eye.

Due to both public and personal experience, this section of the research shall focus solely on the use

of buses by the elderly, for examining the impact the ageing population has on transportation, and

this is for a number of reasons. Firstly, it is commonly observed that of the three principle methods

of public transportation (buses, taxis and trains), that buses are most commonly used by the older

demographic of the population. This is confirmed in a recent report, ‘Missed Opportunities’,

conducting by the older people’s charity, AgeUK (Age UK, 2013).

One could not be blamed for assuming, that given the propensity in which the elderly use buses and

appear to not have to pay for their travel, that charging the elderly would either lower fares for the

rest of travellers using the services, or vastly improve the overall service of the bus companies for

the rest of us due to an increase in budget. However, given how the ‘older person’s bus pass’ is

funded by central government, is this assumption based in any evidence, or merely in prejudice.

To establish the facts on whether or not the ageing population has a positive or negative effective on

public transport, a few brief questions were sent to various national and regional bus companies.

Unfortunately, the responses were limited, but of the two responses received, both proved useful

for cross-comparison purposes. The first response was from the Confederation of Passenger

Transport (CPT) which represents the entire industry nationwide, and the second was from the Chief

Executive of East Yorkshire Motor Services Ltd (EYMS), which represents a regional branch of the

industry. The combination of the answers given by these two branches should help determine the

impact, be it positive or negative, the impact an ageing population has had at both a national and

local level. What was also useful for research purpose was that the regional operator had seen the

answers given by the CPT, so could add further comment from a more localised level

Both respondents supplied answers to the following five questions

1. How many people using your services, are in receipt of a subsidised bus pass due to their age

2. How much in remuneration does your company received from central government to

compensate for this


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3. How much in remuneration does your company receive form any local government schemes

that are in place?

4. Could your company continue to operate the service it does now, if such funding was

withdrawn?

5. If such funding were withdrawn, would your company likely have to charge an additional fee

for the elderly to travel on such services?

The answer to these questions and the implied implications of those answers are as follows. For the

purpose of this research, the answers of both the CPT and EYMS have been merged together.

The number of bus passes issued in England on ground of age in 2010/11 was 8,754,000. This figure

increased to 8,846,000 in 2011/12, and then to 8,848,000 in 2012/13. In the East Riding of Yorkshire

equates 76,000 of these. The national figures simply confirm that the epidemic of population is

occurring. What is interesting, however, is the anecdote that accompanied the regional figures that

stated that pass holders within this region accounted for 40% of the total number of journeys taken

last year. According to the ONS, the total population of the East Riding of Yorkshire (the area served

by EYMS) is 590,800, which means that 40% of the journeys taken on EYMS were completed by just

12% of the population. If the economics do not demonstrate more favourable information, this

statistic is very stark in its admission that the ageing population have a poor impact for those wishing

to use public transportation.

As far as direct remuneration from central government is concerned, the answer supplied by both

the local and national operators was the same: Nothing. The funding comes from Travel

Concessionary Authorities (TCA), which are set up with individual local authorities, who then receive

funding from the Department for Communities and Local Government, but as block grant. The CPT

did note that some would say that this funding is inadequate, and figure 6 allows us to better

understand why this would be said.


17

Figure 6: Spending cuts by Government department since 2010/11 (Reuben, 2013)

So, if no direct funding is coming from the DCLG, and the indirect funding the department is giving

the TCA’s is being slashed, it becomes apparent that the continued use of subsidised travel by the

elderly is an unsustainable situation to be in.

Local authorities do have schemes in place to offer some level of remuneration, but there are also

issues here. EYMS received £7.8 million in local authority subsidy in the financial year 2008/2009,

but this has since reduced by almost a £1 million to £6.9 million in the financial year 2013/14. Again,

all this exemplifies is that the ageing population is continuing to increase, and yet the finance to

allow the situation regarding transportation to continue as it is, is decreasing. The local situation also

presents a situation which is unstainable.

The CPT’s answer to the fourth question continued to exemplify the emerging trend; that when

public transportation is concern, the ageing population is a burden, not a benefit. The CPT state that

due to it being a statutory requirement for bus operates to give free rides to certain customers (the

elderly and disabled), the funding from the TCA’s is used to make up the short fall of if these

customers. Therefore, the CPT predict that if this funding was slowed down or stopped altogether,


18

timetables would likely be reduced, and the possibility that smaller buses would have to be used to

accommodate for the potential loss of custom. EYMS also agree that loss of custom would be

sustained if this money was withdrawn, stating that even if certain pensioners would rather pay then

lose their vital bus services, some would outright refuse to pay, which would result in the reductions

described by the CPT.

Finally, the CPT admitted that if the funding stream was withdrawn (which, as a result of the ever

shifting demographics towards the elderly, may become a possibility) then elderly people would be

charged in line with everyone else. As noted above, the problem with removing the funding that the

bus operators receive from the TCA’s is that even less money will come to bus operators from the

elderly people who will no longer travel on buses once they have to pay for them.

Also in their answer to the fifth question posed, the CPT (who represent all bus operators

nationwide) have placed on the record that the current set up, where the TCA’s reimburse them for

their supposedly incurred costs from transporting the elderly for free, is not adequate. They have

stated then when costs increase (and presumably also when the number of none paying travellers

increase) the only way under the current arrangements for them to continue to run for profit, is to

charge more to those currently paying fees. Issues of this nature have even got to the stage where

certain routes have been taken off the regular timetables due to the lack of people on the service

who are paying.

From all of the answers that have been supplied by the operators, both nationally and locally, it is

clear that not only is the current system unstainable, but an ageing population will only exacerbate

the problem. If bus operators feel that the system funds them inadequately now, and the only way

to offset those inadequacies is by charging fee paying customers more, then the system is clearly

unsustainable. This is one area of public policy where the ageing population has caused a negative

impact, and will only continue to get worse as the phenomenon continues.

Health

The final general policy area chosen to be examined for the purposes of this research was health. It

is a well-known fact that we age our bodies become more susceptible to diseases, and unable to

withstand what they once could. As a result, it has been noted that the NHS will be one of our public

services which suffers heavily from having to cope with the strains of an ageing population. Seeing as

the overall topic of health has been touched upon in the section of this research concerning

employment, this section will be shorter than others.


19

Much in the same way then when boarding a crowded bus, one notes a lot of elderly people, the

same is true when one enters a GP’s surgery. As it is with public transportation, the public

perception is easily backed up with available statistics. The ONS have stated that as far as GP’s

surgeries are concerned, the over seventy fives, who make up 8% of the population, take almost

three times as much of the primary care work load than those aged between thirty and forty (ONS,

2012). So despite making up almost double the percentage of the population (15%), the younger of

these two demographics are losing out on potential health care provision. This is obviously a way in

which the ageing population

The House of Lords Select Committee on Public Service and Demographic Change recently produced

a report entitled ‘Ready for Ageing (Select Committee on Public Service and Demographic Change,

2013)’, and one of the key factors which they assessed was health. Following extensive research and

hearings, the committee’s Chairman, Lord Filkin, concluded that;

“The Committee has concluded that the current healthcare system is not delivering good enough healthcare for older people and is inefficient; there is an urgent need to change the current system to provide better healthcare more efficiently. The NHS is facing a major increase in demand and cost consequent on ageing and will have to transform to deal with this. Because of this rising demand, without radical changes in the way that health and social care serve the population, needs will remain unmet and cost pressures will rise inexorably” (Filkin, 2013)

We can see from this admission alone, that the current healthcare system we have is not only failing

the ageing population, but failing future generations by also taking up too much of resources.


20

Conclusion To conclude this research, it would be fitting to reflect on both the aims and the hypothesis that

were set out in the beginning. It has become clear, that when the four factors examined throughout

this piece of research are combined it becomes clear that the benefits of the ageing population are

only slightly outweighing the burdens, and it comes down to which side acts firsts as to whether or

not this trend will continue.

If business begins to act first, then the power of the Grey Pound will become stronger than ever. If

more people become involved in the care sector, then this too will provide further employment for

the increasingly dwindling ‘independent population’. Both of these plausible outcomes will

demonstrate that the benefits of an ageing population can be harnessed, and used to stimulate the

economy, rather than stagnate it.

However, if the above scenarios become wasted opportunities, and the situation that is current

occurring in our underfunded transport system, and our overburdened NHS continue to see no

reform, then the phenomenon of the ageing population has the potential to bring society to its

knees.


21

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