Same old story?
15th Jul 2011
"There’s nothing the media likes more than a story about itself, especially one with implications that shake the political and media establishment to its core. But away from the waves of revelation, scandal and revulsion over News International’s alleged wrongdoings, a vitally important story received almost no coverage at all.
It’s no surprise. The Fiscal Sustainability report from the Office of Budget Responsibility would have struggled to generate much media ‘cut through’ even in a slow week, but the document makes for sobering reading. In setting out the fiscal cost of an ageing population, the OBR have highlighted that age-related public spending is predicted to hit 27% of GDP by 2060, potentially driving public-sector net debt to over 100%. Health spending alone is expected to rise to 10% of GDP, outstripping all other areas of government spending.
The fiscal reality of an ageing population may seem too big to comprehend. Aside from the health spending implications, there are also public sector pensions, state pension contributions, changes to default retirement ages, and social care costs to consider. Government could almost be excused for putting such topics in the ‘second term issues’ box, but the window of opportunity for making brave (yet unpopular) decisions may be rapidly closing. With last week’s report into long term care funding from the Dilnott Commission being ‘kicked into the medium length grass’ according to an unnamed Downing Street source, has the government lost its appetite for unpalatable policy reforms?"