Realising Britains Potential: Future Strategic Challenges for Britain

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Realising Britains PotentialFuture Strategic
Challenges for Britain

• Presentation to Future Analysts Network
• Annabel Turpie, Strategy Unit
• February 2008

This pack is a discussion paper. It is not a
statement of government policy
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The Strategy Unit was asked by the PM to assess
the challenges and opportunities facing Britain
in the future

• Purpose and scope
• The assessment in this report
• Is forward looking. It looks at the future
  challenges and opportunities facing Britain in
  both a global and domestic context
• Sets out the key questions and choices that flow
  from these challenges
• Is not a review or critique of the Governments
  programme. The aim is to establish an evidence
  base on which policy makers can build future
  strategy

• Methods
• The key methods used include
• Mapping key trends and drivers of change e.g.
  globalisation
• Identifying the publics concerns and
  expectations
• Scanning available projections and scenarios from
  within and outside government
• Detailed analysis of Britains current strengths
  and challenges

The report is not intended as a precise forecast
of what will happen
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Nine key challenges were identified

• Global Britain Preparing for continued success
  in the world
• Economic Prosperity Ensuring that British
  workers and businesses can prosper in a highly
  globalised and competitive world
• Life Chances Tackling the barriers to
  opportunity and reducing inequality to unlock all
  of Britains talents
• The Population Picture Supporting a growing,
  ageing and more diverse population
• Families and Communities Strengthening family
  life and fostering strong communities in Britain
• Safe Britain Ensuring a safe and secure Britain
  for all
• Personalised Public Services Driving further
  improvements in public services by better
  tailoring services to peoples diverse needs
• The Climate Challenge Making the transition to a
  low carbon Britain
• Democratic Renewal Modernising our democracy for
  the 21st century

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1. Global Britain Preparing for continued
success in the world
Key challenges / opportunities
Implications

• By 2020 China will be the 2nd and India the 6th
  largest economy in the world1
• The global population is expected to rise from
  6.5bn in 2005 to 7.7bn in 2020 and 9.1bn in 20502
• There will be increasing effects of climate
  change and increased pressure on global resources

• Competitive pressures on Britain will increase
  but new markets for British companies will also
  open. The development of world leading skills and
  talent will be critical
• Global population growth and climate change will
  create sustainable consumption and environmental
  challenges, placing further demands on
  governments to use the international system (e.g.
  such as binding global agreements) for strong
  environmental stewardship
• Globalisation (e.g. increasing interconnectedness
  and openness of economies and societies) may
  create new risks of economic instability and pose
  new challenges in counter-terrorism and conflict
  prevention / resolution
• Despite the spread of democratic values and
  consumerism (with a growing global middle class),
  there does not appear to be a widespread
  convergence of global values and norms.3 This
  will affect how Britain engages with other
  countries and the role played by international
  institutions

World trade is continuing to grow Export-GDP
share all countries1
Projected
(1) World Bank (2007) Global Economic Prospects
(GEP), (2) United Nations Secretariat World
Population Prospects The 2006 Revision and World
Urbanization Prospects The 2005 Revision (3)
Esmer and Pettersson (2007) Changing Values,
Persisting Cultures
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2. Economic Prosperity Ensuring that British
workers and businesses can prosper in a highly
globalised and competitive world
Key challenges / opportunities
Implications

• The UK economy is fundamentally strong (e.g. with
  open and flexible markets) but it will face a
  number of challenges over the next decade
• Challenges include the growing effects of
  globalisation, the need to shift to a low carbon
  economy and the increasing pace of technological
  innovation

• Increasing global competition will require a more
  highly skilled and creative workforce with a
  focus on high value added sectors. Creative
  industries and financial services between them
  now account for over 17 of the UK economy2
• Rapid changes in technology will require an
  improved ability to make the most of technology
  and create value from technological breakthroughs
  e.g. in environmental technologies
• To adapt and exploit new opportunities, a more
  favourable climate for enterprise - and changed
  attitudes to risk will be needed. Total
  entrepreneurial activity3 in the UK is still
  roughly half the rate of the US
• To continue to prosper Britain will need
  continued investment in physical infrastructure
  and an open, competitive, resilient and
  proportionally regulated business environment
  engaging all parts of the United Kingdom in
  contributing to prosperity

BRIC trade in high tech manufactures is rising
more rapidly than other trade (from a low base)
and is 6 times higher than it was in 19961
1996 100
High tech
BRIC Brazil, Russia, India, China (1) OECD
(2007), Staying competitive in the global economy
(2) Economist magazine (2007) quoting from DCMS
Creative Industries Economic Estimates 2007 (3)
Global Entrepreneurship Monitor (2007). As
measured by the proportion of the labour force
either (i) actively involved in starting a new
business or (ii) owner - manager of a business
that is less than 42 months old
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3. Life Chances Tackling the barriers to
opportunity and reducing inequality to unlock all
of Britains talents
Key challenges / opportunities
Implications

• Over the past 10 years people, have got richer,
  healthier and more secure and this is true even
  for the least advantaged
• However, there remain persistent gaps in chances
  to succeed for people with different social,
  economic, ethnic and other backgrounds
• Social mobility declined for children born
  between 1958 and 1970 but recent analysis
  suggests it has not worsened since then1

• All children need to have the best start to life.
  Countries with strong investment in early years
  learning and childcare rank highly on measures of
  educational excellence and equity
• Staying on track and developing talents through
  childhood is key to making a successful
  transition to work or university
• As businesses increasingly look for workers with
  intermediate and higher skills as well as softer
  skills (such as interpersonal and team working
  skills)3, those with low or no skills will need
  to be offered second chances to find work and
  progress
• Tailored action and personalised support will be
  needed to help the hardest to reach groups to
  succeed in work. e.g. only 26 of those with
  depression are employed compared to almost 50
  for all people with a disability4
• Parental engagement is one of the most important
  factors in driving childrens educational and
  other outcomes5. Providing such adults with
  improved opportunities is in turn critical to
  raising the aspirations of their children

of 19 yr olds studying for a degree by parental
class, 20072
(1) Blanden and Machin (2007) Recent changes in
intergenerational mobility in Britain (2) DCSF
(2007) Youth Cohort Study sweep 12 SFR39/2007
(3) CBI-Pertemps (2007) Employment Trends Survey
(4) Labour Force Survey (2006) (5) Feinstein
(1999) The relative economic importance of
academic, psychological and behavioural
attributes developed in childhood
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4. The Population Picture Supporting a growing,
ageing and more diverse population
Key challenges / opportunities
Implications

• The UK population is expected to increase to 67m
  by 20201. The number of those aged over 85 will
  increase by 50 by 20201
• Older people are more likely to have higher
  expectations of public services
• Housing demand will continue to grow, especially
  in the South East
• Net migration to the UK is projected to continue

• Increases in life expectancy will mean greater
  numbers of people with greater health and care
  needs e.g. demand for informal care from family,
  friends and community members is projected to
  rise by 40 by 2022 particularly affecting those
  without children who are in need of care (one in
  five of those over 80 by 2041)2
• The changing demands of the old age population
  will put pressure on the public and private
  sectors to adapt e.g. the quality and range of
  services available in nursing homes
• Affordability of housing will still be an issue
  for some, especially first time buyers. It is
  estimated3 that even with current planned
  increases in housing supply, the percentage of
  30-34 year old couples in England able to afford
  a terraced house would fall from just under half
  to around a third by 2026
• Migration will boost employment and offer other
  economic benefits but may pose challenges for
  some public services in parts of the country

The proportion of the population over 85 will
increase by over 50 to 1.9 million over the
next decade1
Population Index (2006100)
(1) ONS (2007) 2006 based projections (2)
Personal Social Services Research Unit (2007)
Analysis for Strategy Unit (3) National Housing
and Planning Advice Unit (2007) Developing a
target range for the supply of new homes across
England
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5. Families and Communities Strengthening family
life and fostering strong communities in Britain
Key challenges / opportunities
Implications

• People are generally optimistic about the future3
  and generally identify a happy family and a nice
  life as their priority for the future (rather
  than fame, celebrity and wealth)1
• However, societal changes such as divorce and
  cohabitation, mean increasing numbers of people
  will experience different types of family life
• As expectations of parents increase and people
  want more high quality family time, the need to
  balance work and family life will become even
  more critical
• Despite the rise of virtual communities and other
  changes in society, local communities will
  continue to be important in supporting family
  life and Government and local leaders will face
  increasing demands to ensure positive and vibrant
  places for people and families to live
• Changing levels of personal mobility and improved
  communication links could loosen historical
  geographical ties. People will have more choices
  about how and with whom they interact.
  Integrating new migrants and their children into
  British society and local communities will be
  crucial

• Families remain central to wellbeing and quality
  of life1
• Family structures are becoming increasingly
  dynamic and varied
• There are increased pressures on family time,
  e.g. when both parents work, and rising societal
  expectations of parenting
• Increasing population diversity and other changes
  raise challenges for local communities

The number of one-person households will increase
to 9.2m by 2021 outnumbering married couple
households for the first time2
Married
Households (000s)
One-person
Cohab-couple
Lone-parent
(1) LSE (2007) National Lottery Dream Study.
Over 57 of respondents showed a desire for
family and friends to be happy and successful and
wish for financial security (2) DCLG (2007)
2004-based household projections (3) BBC/ ICM
Omnibus poll (2007). 72 of respondents said that
they tended to feel most happy with family (next
highest response was friends at 17)
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6. Safe Britain Ensuring a safe and secure
Britain for all
Key challenges / opportunities
Implications

• Notwithstanding the 42 fall in crime and the
  much lower risk of being a victim of crime (from
  40 - 24) since 1995,1 public concern about
  crime remains high nationally
• There are particular challenges in relation to
  gun crime
• There is a growing evidence-base on what drives
  crime. The challenge is to reflect that in CJS
  policies

• Particular attention needs to be paid to certain
  offences such as some forms of violent crime
  (e.g. gun and knife crime) that have remained
  persistent
• Neighbourhood policing will continue to play a
  crucial role in public reassurance and engaging
  local communities in the fight against crime and
  anti-social behaviour
• Advances in technology have implications for the
  ability of the Government and private sectors to
  prevent and detect more crime. For example,
  during the first half of 2007, nearly 32m illegal
  attempts to acquire personal information
  electronically were detected worldwide, an
  increase of more than 150 over the previous 6
  months2
• Improved evidence on the drivers of crime (both
  at an individual and societal level) will need
  increasingly to inform the Governments approach
  to future crime challenges. A focus on
  prevention and early interventions as well as on
  punishment and rehabilitation is needed to
  deliver the step change in performance required

Volume crimes (such as vehicle theft and
burglary) have fallen particularly sharply
although this fall is levelling out1
Vehicle Theft
Crimes (m)
Burglary
Known as phishing scams (1) HO (2006/07)
Crime in England and Wales 2006/07 (2) Microsoft
(2007) Security Intelligence Report
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7. Personalised Public Services Driving further
improvements in public services by better
tailoring services to peoples diverse needs
Key challenges / opportunities
Implications

• Ensuring further improvement in public services
  requires provision tailored to the needs of
  individuals and areas, within fiscal constraints
• Preventing and addressing more complex needs
  requires innovation and greater collaboration
  between users and services
• Higher public expectations will need to be met
  through increased productivity and value for
  money and new forms of professionalism

• Delivering more personalised and professional
  services will require a number of systemic
  changes to public services over the next decade,
  including
• Fostering a new wave of innovative practice
  around personalising services (e.g. individual
  budgets) and encouraging a more diverse supply of
  providers, to meet the diverse needs and choices
  of users (e.g. social enterprises)
• Increasing responsiveness and local
  accountability at the local level to ensure
  services are community-specific and transparent
  (e.g. Neighbourhood Policing), and shifting
  resources and practice to preventing problems
  (e.g. Family-Nurse Partnerships)
• Supporting and encouraging people to collaborate
  with services to meet their own needs (e.g.
  managing long term health conditions)
• Increasing emphasis on professional skills,
  autonomy and accountability (e.g. teacher
  training) and continued improvements in value for
  money and productivity (e.g. public sector shared
  services)

Public opinion on the most important areas the
government should focus on in public services (
believing most important)1
Friendly, motivated, customer services staff
Providing a choice of services
Short waiting lists
Efficient and professional services

(1) Henley Centre, Headlight Vision Planning for
Consumer Change (2007)
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8. The Climate Challenge Making the transition
to a low carbon Britain

Key challenges / opportunities
Implications

• The potential costs of climate change are huge
  up to 20 of global GDP p.a.1
• Britain will need to play its part in mitigating
  climate change, but also exploit opportunities
  e.g. the global carbon market is already valued
  at 30 bn2
• An increased risk of flooding and severe heat
  waves in the UK is now inevitable in the next
  20-30 years

• Government will need actively to continue to seek
  collective international action e.g. through a
  global agreement on climate change mitigation
• Protection of existing vital infrastructure (e.g.
  energy and transport infrastructure) and
  adaptation of spatial plans will be critical to
  guard against increased risk of flooding and
  storm damage
• Developing carbon markets and supporting the
  development of low carbon technology will be
  essential to meeting the climate challenge in the
  long term. Preventing climate change need not be
  costly Stern estimates that the financial cost
  of taking action to mitigate the risks could be
  as little as 1 of global GDP p.a.1
• Attitudes and behaviours will have to change,
  both from business and from people generally.
  People will have to take action in their daily
  lives to prevent emissions, e.g. walking and
  cycling more

Global temperatures are expected to increase by
at least 3oC by 2100 if decisive action is not
taken3
(1) HMT (2006) Stern Review on the economics of
climate change (2) World Bank (2007) State of
Carbon Markets (3) IPCC (2007)
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9. Democratic Renewal Modernising our democracy
for the 21st century

Implications
Key challenges / opportunities

• Traditional civic institutions will need
  increasingly to be more responsive and relevant
  to all people and address the current social skew
  in political participation
• With four in five Britons believing that the
  Governments prime objective should be the
  greatest happiness rather than the greatest
  wealth3, future politics will need both to deal
  with bread and butter political issues and to
  address issues likely to affect citizens
  wellbeing and environmental concerns
• A greater sense of active citizenship should be
  encouraged and new technology harnessed to
  facilitate greater civic participation and
  political involvement 12 of people in the UK
  participate in voluntary organisations, half the
  rate of participation in Canada4
• Constitutional renewal and the reform of
  government institutions will need to provide
  increased opportunities and influence for people
  to be involved in decision-making (nationally and
  locally) and strengthen the accountability of
  government

• Interest in public affairs is steady, but voter
  turnout has declined with the young and most
  disadvantaged about half as likely to vote1
  political party membership has declined
  substantially
• Civic participation appears relatively stable
  with new forms of participation emerging, e.g.
  blogs
• People increasingly feel they are not able to
  influence political decisions

Levels of very and somewhat interested in
politics by income decile (2005)2
Interest lowest among lower income groups
1999
Civic participation refers to activities such as
engaging in local level activity (e.g. contacting
a local councillor) and civic activism refer to
activities such as being a school governor (1)
Electoral Commission and Hansard Society (2006)
An audit of political engagement 4 (2) World
Value Survey (2007) (3) GfK NOP opinion poll for
the BBC - published 2006 http//news.bbc.co.uk/1/
hi/programmes/happiness_formula/4771908.stm (4)
British Social Attitudes (2008)
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There are a number of key themes which cut across
the nine challenges

• The pervasive effects of globalisation and the
  increasing interconnectedness of economies and
  societies with new risks as well as huge
  opportunities flowing from these changes
• The scale of population change both in Britain
  and globally not merely growth in size but
  increasing diversity with a host of
  consequences for the economy, society, the
  environment, public services and how people live
  their lives
• The powerful influence of technological change
  and innovation across all the challenges
• The importance of open, flexible and adaptable
  markets, on the one hand, and investment in
  skills, talent and opportunity, on the other, in
  managing new risks and exploiting new
  opportunities
• The profound transformational changes likely to
  follow from moving to a low carbon, low waste
  economy
• The key role played by individual and public
  attitudes, values, expectations and behaviours
• The crucial importance of reform to institutions
  of government, nationally and internationally,
  and to public services in order to respond to
  these challenges and to meet the needs and
  expectations of citizens

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Next steps

• A contribution to the ongoing debate on strategic
  challenges
• Much work is going on across Government already
• Challenges and issues that may need to be
  addressed (both policy and where further analysis
  is required)

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Finally, some reflections from me (as a policy
analyst not futures expert!)

• Openness of analysts inside and outside
  Government
• Dealing with uncertainties and alternative views
  of the future
• Areas where Government is more comfortable with
  futures analysis
• Values and attitudes