Long-term trends and strategic challenges
Embracing change - demography, health and work
The region’s population grew by over 14 per cent between 1981 and 2005, which is more than double the rate for the UK as a whole and second only to the South West. The population is now at 5.5 million, but further growth to 6 million by 2021 is likely under current trends.ii According to predictions from Anglia Ruskin University’s Chelmer demography model, Cambridgeshire, Essex and Hertfordshire are projected to account for over two-thirds of this growth.iii
The region’s population is aging. The Government Actuaries Department predicts that, over the next 20 years, the share of the region’s population aged 15 to 49 will decrease from 46 per cent in 2004 to 42 per cent in 2021, while the share aged 65 and over is expected to increase from 17 per cent to 21 per cent. This has major implications for housing markets and public services, but also provides businesses with a growing market for new products and an experienced labour supply.
The region is increasingly open to migration from other parts of the UK and overseas - with people coming to live, work, visit or study. Successful regions and communities tend to be outward-looking and tolerant, with a proactive approach to attracting talented people and managing the effects of migration.
Just as the population is changing, so too are the factors that impact on people's well-being and productivity. The central importance of the health status of the population to productivity is increasingly recognised, as are the economic and social costs of poor health. Health contributes to economic outcomes through four main channels: higher productivity, higher labour supply, improved skills as a result of increased participation in education and training and increased savings for investment in physical and intellectual capital (as opposed to healthcare).
The CBI estimates that sickness absences represent an annual cost in the UK of £11.6 billion of lost productivity, whilst Layard has estimated that poor mental health alone costs £13 billion in lost output, before considering the wider £10 billion of costs to the Exchequer from related incapacity benefits. 180,000 people in the East of England are receiving sickness and disability-related out of work benefits. Central to efforts to raise productivity growth in the region must be to improve healthy years of life and tackle major determinants of health status, such as education, employment status and income inequalities.
Access to quality employment is seen as one of the principal determinants of an individual’s well-being. Adults spend a high proportion of their lives at work and depend on the workplace for income, friendships and social networks and fulfilment. Employers therefore have a major role to play in the health of the workforce through workplace organisation and job design.
The health system in the region also makes a major, direct contribution to the economy. The NHS in the East of England spends in excess of £7 billion per annum and is the region’s largest employer. This offers huge potential to stimulate innovation, source locally, improve skills and deliver climate change mitigation and resource-use ambitions.
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