The growing challenge of these crowded islands

  • The UK’s population is growing at an alarming rate
  • An ageing population, higher birth rates and increasing immigration will all make greater demands on local authority resources
  • Local authorities need to have a long-term plan in place to effectively manage their growing risk

The UK is getting busier. There will be a massive 73 million people living here by 2037, with the number of people aged 80 and over set to double, according to official figures from the Office for National Statistics.

With the 2011 census counting 63 million, this represents a 15% rise over 26 years.

There are many factors at play: healthier lifestyles and better medical services mean that the lives of Britons are getting longer year-on-year, and the population is ageing. As the broad bulge of ‘Baby Boomers’ born between 1946 and 1964 hits retirement, the number of people over 65 will rise by a huge 278,000 per year.

The birth rate is also rising again, and 57% of the ONS’s projected growth – or 9.6 million people – is driven by the fact there are more births than deaths.

The remaining 43% is expected to come from immigration.

Councils face growing challenge

“The biggest challenge facing councils going forward is austerity, coupled with a growing and ageing population,” says Sarah Pearson, Strategic Risk Practice Leader, Zurich Municipal.

And it’s not just the numbers that are going up, expectations are rising as well.

For example, the generation now retiring have got used to a certain standard of living, as well as more autonomy and a greater degree of choice than their own parents ever had.

“We all seem to want more service for the same amount of money – or even more for less – just as local authorities are shrinking,” says Sarah.

These concerns are reflected in news headlines projecting the need for ‘supersized’ classrooms to accommodate the growing number of children, and worries over a lack of school choice, meanwhile the blame for a shortage of affordable homes is frequently placed on immigrants.

Changing needs

Another complicating factor is that not all these ‘new people’ will be the same, or have the same needs, and services need to reflect this.

For example, some of the ‘Boomers’ will be well-prepared for retirement, with ample savings and capital. Others will be entirely dependent on the state. Some will be fit and healthy, perhaps keen to keep working well into their 70s, while others will be crippled by chronic health conditions.

Their service requirements will be different and varied, but all will have needs, and this means a massive increase in demand for the services older citizens depend on, just as local authorities are fighting to find a path through round after round of austerity.

Similarly, the rate of growth can be hard to plan for. While we know how fast people will age, immigration tends to come in waves that can be very hard to predict. One of the major challenges to public services from the influx of Eastern Europeans after 2004 was the pace at which they arrived, rather than the numbers, and they fact they chose to follow the jobs to rural areas that were not used to coping with an influx of foreigners.

“I think people traditionally believe that this will place demand on social care and housing, but in reality it is much bigger, touching on transport, leisure and more,” says Sarah.

Demands on resources

However, councils not only have less money to spend to meet the new demand for services, they are also losing what workforce capacity they have to deliver them.

“Councils have lost many people and will lose more because of austerity cuts, and these people are taking with them corporate memory and expertise,” says Sarah.

Attempting to risk manage your organisation through the years ahead will be challenging, as changing demographics will impact your exposure to financial risk, management risk and business and operational risk.

I think people traditionally believe that this will place demand on social care and housing, but in reality it is much bigger, touching on transport, leisure and more

Sarah Pearson, Strategic Risk Practice Leader, Zurich Municipal

“I think leaders will have to make some tough decisions, and some of the more discretionary areas of spending could face being cut,” says Sarah.

“They will have to reduce these services or even stop them altogether, and this can be quite difficult for elected members to actually do, especially if those services have existed for some time and the community expects to see them continue.

“Leaders will have to look across the whole council to find savings that can be re-invested in core services. I have heard local authority representatives say that from now on they will only do things that make money.”

Radical steps to deliver services

To tackle their financial and operational shortcomings, many councils are taking radical steps to transform the way they deliver services, including more outsourcing, more partnerships and the shift towards commissioning rather than directly providing services.

“Councils are looking at different, more complex delivery models, and in order to do this they first need to make sure that they have the necessary skills,” says Sarah. “Not every authority does.”

But before you embark on a new way of operating you need to properly risk manage your own abilities and ask: can you effectively manage contracts and relationships with third parties? Are you looking at the risks in your supply chain and thinking about service resilience?

If contracts break down, leaders could be looking at service delivery failure, legal issues around a failure to deliver on contracts as well as increased financial and workforce risk, and serious reputational damage.

“If a wheel comes off, it will be the council’s brand that is damaged, not the supplier,” says Sarah.

Similarly, while technology is often cited as a solution – and it can indeed be a powerful ally in enabling more streamlined, more personal service delivery – this is not always a straightforward equation.

For example, while Telemedicine (the use of telecommunication and IT to provide clinical health care at a distance) may enable an older person to monitor their own care more efficiently, it may further isolate a lonely person with all the knock-on problems that can cause.

“This is a challenge that requires a genuinely strategic solution, and leaders need to look at the problem in its entirety, rather than fight fires as and when problems occur,” says Sarah.

“They need to think about how all this changes their risk exposure, and what they can do to mitigate or transfer that risk.”