11 July 2005
Stephen Timms
Minister of State for Pensions Reform
Shaping the future: rethinking older people's services
Local Government House, Smith Square
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Thank you Chair for inviting me - I am delighted to be here.
You will know that the Government published our ageing strategy document – Opportunity Age – in March and we also published the Adult Social Care Green Paper – Independence, well-being and choice – at the same time. And I have seen the ADSS / LGA publication – All our tomorrows – which also makes cogent arguments for developing better services for older people.
Receiving all of them I was struck by the degree of consensus we all share about the ageing society and how we all need to adapt. Compared with older people in the past, older people are today more likely:
- to be healthy;
- to be working – over a million people over state pension age are today in work;
- to be better off – for the first time, pensioners are today no more likely to be poor than anyone else;
- and to be contributing as volunteers, hospital visitors, school governors, local councillors, carers and in many other ways.
So we need to develop approaches which, in the words of your report, “recognise the vital role that older people play in our society and improve the participation and engagement of older people in policy and service issues.”
That means developing policies and delivery strategies which reflect the range of issues that matter to older people, from care and health to leisure and learning.
We can only achieve our ambitions if we all – central and local government and the voluntary sector – work together in effective partnerships. And we need to listen attentively to what older people themselves are saying.
Pensions
DWP is responsible for much more than pensions, including for the Government’s broader ageing strategy which I want to refer to this afternoon. But let me start with pensions.
My task is to make sure that:
- the pensioners of today have a reasonable standard of living; and that
- the system will be fair and affordable for future generations too.
The Pensions Commission chaired by Adair Turner gathered together a seminar of experts at the Excel Centre in Docklands last month, and will publish its recommendations on future pensions policy towards the end of this year. We shall be working for as wide a consensus as possible about the way forward, because only if there is a consensus will people in work feel confident about how the system will look by the time they come to depend on it.
In 30 years time, the pensioner population will have increased by half, from 11 million to 16 million. Life expectancy for a man aged 65 has been rising by three months every year for the past 20 years, and the wonderful transformation which that signifies presents big challenges for our pensions system. We have to face them squarely, to secure adequate incomes for older people in the future without imposing an excessive burden in tax and national insurance on those in work.
And these are challenges, not just for us, but for the whole of the industrialised world. We are all in the same boat. We all have ageing populations, increasing lifespans and falling birth rates. The challenge for the future is how we can maintain decent incomes and reliable services for older people, and do it through a reasonable financial burden on people in work. That is the central issue to be addressed in a package of reform, and we are going to be working hard over the next few months to listen to different views, and then to develop a package of proposals which I hope will represent as broad a consensus as possible.
When we were elected in 1997, our first priority was to address pensioner poverty. Pensioner incomes as a whole rose significantly under the Conservative Government, but the problem was that a large group of pensioners was completely left behind.
Our first step was the Minimum Income Guarantee, set at £75 per week. It was crude, but it worked in getting extra money quickly to the people who needed it most. We always knew it wasn’t the whole solution. It did nothing to help people who had done the right thing in their working lives, and saved and built up a modest occupational pension which together with their basic state pension, took them just above the Minimum Income Guarantee level. Because of a few extra pounds a week, they missed out on extra help like Council Tax Benefit and Housing Benefit. I think there was a broad consensus that wasn’t right.
And so we created the Pension Credit. It means that no pensioner now need live on less than – not £69, for a single pensioner, as in 1997, but £109, or £167 for couples. I spoke to pensioners in the election campaign who remembered only too well having to scrape by on £69 per week through income support just eight years ago, and who are now receiving over half as much again, thanks to the Pension Credit. In East Ham, over 5,000 households are receiving Pension Credit, and I have seen that change the lives of many people who should not have been left on such tiny incomes in the first place. Now they have the chance of some decency in their retirement, and whatever changes we make in the future, we have to make sure we do not allow large scale pensioner poverty to make a comeback.
The key improvement from Pension Credit has been that modest pensions and savings are rewarded, not penalised as they were under the old income support system – and under every scheme since 1948. The Pension Credit provides a top up in recognition of the savings which people have made on top of the state pension. It means that single people with an income of around £150 a week are still in a position to benefit from Pension Credit, and couples with more than £220 per week. And the guarantee level will rise with earnings throughout the rest of this Parliament.
Working, saving and planning for retirement
All our tomorrows makes another important point in arguing that the barriers to older people working need to be addressed. I completely agree with that. To achieve our manifesto ambition of an 80 per cent employment rate, helping older people return to or stay in work will be essential.
And we are taking steps, including:
- removing age discrimination in employment and introducing vocational training through new legislation next year, supported by a new Commission for Equality and Human Rights; and
- providing incentives for people to work longer – for example, through our policy of deferring a state pension for five years to qualify for a lump sum of between £20,000 and £30,000.
We are providing more help for older people to develop new skills; consulting on extending new rights for carers, so that people with caring responsibilities can combine working and caring; and looking at reforming Incapacity Benefit, to help people back into work.
And, of course, while people are in work, they need to be thinking about what kind of retirement income they want to aim for and so how much they should be saving. We are working on financial capability with the programme which the Financial Services Authority is leading. People need to be making informed choices. That is why we have a programme of work which includes delivering pension forecasts to over 15 million people by 2008, and developing a web-based retirement planner, giving information about individuals’ state pension and occupational pension entitlements, which we hope will be available from next year.
Beyond pensions
My Department is though responsible for much more than simply pensions. We are the lead department across the whole of Government for policy on older people, making sure that departments are joined up and that central government works effectively with local government to deliver the services we need to promote independence and well-being.
Like the LGA, I want to challenge misconceptions about older people. I want us to be a society which celebrates the contribution of older people, and organises itself to help older people live the active lives which they want. That has many implications in policy areas beyond pensions, and one I want to mention particularly is ensuring older people have choice and control in the way social care is delivered to them.
Social care
Living active lives; being treated with dignity and respect. These themes are just as important – maybe even more important – when people need care. And these days, people quite rightly have higher expectations about the quality of services they should be able to expect. I agree with you that we need to modernise the way in which care is delivered, and give older people more choice and control.
We said in the adult social care Green Paper that we want to give people the opportunity to make decisions about how they lead their own lives. We want to promote independence instead of dependence.
That is why we will pilot Individual Budgets so that individuals will be able to buy in the services they need, if they want to. They will be able to tailor packages to their own needs and preferences.
Individual Budgets will put a stop to the revolving door of care and care assistants because people will be able to choose who helps to care for them. And the new system will mean that social care workers will have the freedom to do what they do best: which is to care.
The Green Paper is the third part of our vision for health and social care in England, alongside Choosing Health, the public health White Paper and the NHS Improvement Plan. Our vision is one of inclusion, where an individual’s need for care does not reduce them to total dependency and makes sure that their carers and staff are empowered to help them shape their own lives.
It is an exciting piece of work and I am glad that LGA will be involved in development of the pilots.
The role of local government and joining up
The strategies set out by the LGA / DSS and the Government can only be delivered if central and local government work together effectively. We have seen some great examples of central and local Government working together – none more so than the partnership which secured the triumph of London’s Olympic bid last week. We need to learn from successes like that and apply them to other areas like this one where the well being of very large numbers of people is at stake.
We are already making progress. LGA collaborated with Government departments to publish the Link-Age document last year and has been closely involved in its implementation. I warmly endorse the Link-Age concept, and I want to see it developed and taken up more widely.
I have already visited two Joint Visiting teams which, as you know, bring staff from The Pension Service, local authorities and in some cases the voluntary sector into single teams with cross trained staff – in some cases involving also staff from a Primary Care Trust. This is a major step forward which greatly improves customers’ service. It means people are visited once and helped to claim all their entitlements in one go, and it is significantly more efficient, cutting out wasteful duplication.
But what impresses me most about Joint Teams is not so much their structure, but rather their culture. Both teams I visited were enthusiastic and determined to offer quality services. No more “well I’m Pensions Service so I only deal with pensions” or “I’m social services so pensions are not my business.” What I saw was genuine commitment and flexibility – it was very impressive and I would like to thank LGA for the important role you have played in developing the Joint Team concept and that you are playing now in rolling them out nationally.
A second key element of Link-Age is Alternative Offices whereby voluntary sector organisations can take claims to DWP benefits and verify supporting documents. Similar pilots are planned with local authorities.
DWP has made over 170 Link-Age contracts from our £13 million Partnership Fund with local authorities, and with a wide range of voluntary sector organisations. Link-Age has made an impressive start, but it is only a start – we can join up still further, and we are keen to do so. For example, we are developing ways of bringing the private sector in the shape of the utility companies into the partnership to help us tackle fuel poverty among older people. And next year, we will begin a number of pilots to test what we are calling Link-Age Plus – a fully integrated service, building on the Sure Start model. Again, I know that the LGA will be involved in developing these pilots.
Conclusion
A lot of progress has already been made: Pension Credit – helping remove pensioners out of poverty, better and more joined up services, new mechanisms for listening to older people. But we know there is a lot more to do.
I was a local authority leader for four years, so I know what local government can achieve. And what I’m looking forward to is us in Government working with committed people in the LGA, AADSS, local authorities and the community sector to make the most of the opportunities we now have to improve and enrich the lives of all our older people.
Thank you.