The 200-Fold Increase in Old Age Housing Support Under Thatcher

Contrary to stereotype, funding for old age housing exploded under Prime Minister Margaret Thatcher

In the latest edition of his well-known textbook on UK domestic policy, LSE Professor Howard Glennerster tells the remarkable story of how national government support for housing the elderly exploded under Margaret Thatcher. In the decades after the war, local government authorities provided some social housing for the elderly who had nowhere else to turn. Technically, an elderly person also had the right to move into a privately-managed home with the bill paid by the national government. But this happened very rarely until the Thatcher government spelled the possibility out in explicit regulation, making the public generally aware of it for the first time.

Glennerster describes the stunningly rapid adaptation of the British:

People began to rid their elderly relatives of their assets and claim [the housing benefit]. Local authorities, under pressure to cut spending, began to see that if they closed homes or privatized them the old people could still be looked after in residential care and the central government would have to pay for them through the social security scheme. Private [old age] home owners began to realize that if they increased fees locally in line with other homes the social security scheme would have to pay up.

The result, under the putatively tight-fisted Thatcher government, was that Social Security spending on old age homes increased from £10 million to £2,072 million, a more than 200-fold increase over 12 years!

Glennerster, a Labour Party man down to his bones, concedes the reality that is usually trumpeted by conservatives:

There could be no better example of the way individuals will change their behaviour in fairly ruthless ways to avail themselves of public money.

Author: Keith Humphreys

Keith Humphreys is the Esther Ting Memorial Professor of Psychiatry at Stanford University and an Honorary Professor of Psychiatry at Kings College Lonon. His research, teaching and writing have focused on addictive disorders, self-help organizations (e.g., breast cancer support groups, Alcoholics Anonymous), evaluation research methods, and public policy related to health care, mental illness, veterans, drugs, crime and correctional systems. Professor Humphreys' over 300 scholarly articles, monographs and books have been cited over ten thousand times by scientific colleagues. He is a regular contributor to Washington Post and has also written for the New York Times, Wall Street Journal, Washington Monthly, San Francisco Chronicle, The Guardian (UK), The Telegraph (UK), Times Higher Education (UK), Crossbow (UK) and other media outlets.

5 thoughts on “The 200-Fold Increase in Old Age Housing Support Under Thatcher”

  1. “People began to rid their elderly relatives of their assets …” Was it really that predatory? Perhaps the elderly freely agreed to put their assets into trusts for their children, or simply transfer ownership of their houses – a good move anyway to avoid death duties, before the minimum was raised by Gordon Brown to £400,000, well above the value of a median house.

    1. I suspect it wasn’t predatory behavior by the young relatives, but rather was sloppy wording by the distinguished professor. Look how different it could sound with just a minor editing adjustment:

      People began to help their elderly relatives divest their assets and claim [the housing benefit].

      1. It could easily be both. Probably some of those elderly relatives were at diminished capacity, some at capacity but felt pressured to divest by their kids (happens now in the states sometimes), and some were active and willing participants.

  2. Doesn’t the same thing happen with medicare in the US, or really anything that is ‘means tested’, when an older person has the chance to obtain subsidized government care and pass on a living inheritance, vs. simply giving all their accumulated wealth to a hospital?

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