Scotland’s population is ageing but what will be the impact of this on their budget and, most importantly, the planning and delivery of vital public services? To answer these questions, the Finance Committee has launched an inquiry and is asking organisations and individuals for their views.
Committee Convener Kenneth Gibson MSP said:
“Projections suggest that Scotland’s population will age more rapidly compared with the rest of the UK. By 2035, our working age population is set to increase by 7%, those of pensionable age will increase by 26%, while those 75 and over will increase by 82%.
“With on-going restraint in public sector budgets, coupled with these population shifts, what will the impact be on public finances and, importantly, are we planning for the future - both short and long term?
“The inquiry will focus on the planning for, and impacts on the public finance primarily relating to the provision of health and social care, housing and pensions and the labour force.”
The Finance Committee is initially seeking written views on these issues, including:
- Health and social care. To what extent are the pressures on health and social care a consequence of an ageing population as opposed to other health challenges such as obesity?
- Housing. What is likely to be the main pressures on both the public and private housing stock arising from demographic change and what action should government and other public bodies be taking now to address this?
- Labour force. What should be the balance within public policy of support for older people who wish to remain in employment versus creating opportunities for youth employment?
- Pensions. What is the likely impact on the public finances within Scotland of demographic change on public sector pension schemes and what action is required by the Scottish Government and other public bodies to address this?
The inquiry remit and call for evidence is available on our website.
In January, the Committee held a series of round table discussions on fiscal sustainability. The importance of this issue has been highlighted in other evidence considered by the Committee. For example, the Office for Budget Responsibility in its fiscal sustainability report (2011) stated—
‘demographic change is a key source of long-term pressure on the public finances’.
Similarly, a report by the International Monetary Fund (2009) on the financial crisis stated—
‘In spite of the large fiscal cost of the crisis, the major threat to long-term fiscal solvency is still represented, at least in advanced countries, by unfavourable demographic trends.’
Finance Committee Adviser, Professor David Bell, published a report on ‘Fiscal Sustainability’, outlining issues of demographic change on the Scottish budget.
The Committee will begin oral evidence sessions in September with a view to reporting in January 2013.