The Liberal Democrats believe they have a blueprint for reassessing the welfare state. But nowhere does their latest health policy paper say how much it would all cost.

The new Liberal Democrat health policy paper, Moving Ahead, is a slender, nine-page affair, but health spokesman Simon Hughes says it sets out the framework for a no-holds-barred reassessment of the welfare state.

The ambitious aim is nothing less than 're-inventing Beveridge'. At its heart are the links between benefits and the myriad - often anomalous - regimes of paying for health and social care.

'We are going to consider every bit of the muddled jigsaw that makes up social security, health, and social care, put it together and make it work,' says Mr Hughes.

Although Moving Ahead makes no specific proposals on this - apart from a commitment to freeze prescription and abolish eye and dental charges - some options may emerge, possibly amid wrangling, at the Liberal Democrat conference next week and over the next few months.

According to Mr Hughes, these might include: funding social security, social care and health through social insurance; new ways of paying for health and social care after pensionable age; bringing consistency to GP and dentist payment regimes; and travel insurance to pay for vaccinations.

The paper proposes a merger of health and social services, with a single budget administered by a department of health and social services. Funding would be distributed by a regional authority (or regional government), which would consider strategic decisions such as hospital closures.

Health authorities would be merged into local authorities, re-injecting an element of local democracy into health services.

'Local councils would have for the first time ever a say, not in the strategic planning of the NHS, not in NHS policy but in how you deliver the policy,' says Mr Hughes.

Council health and social services committees - or perhaps, in the spirit of Labour's local government reforms, the health and social services member of the elected mayor's council 'cabinet' - should be supported by 'professional experts' in the field.

Primary care groups would be accountable to health and social services committees. PCG members would include doctors, nurses, professions allied to medicine, social services and lay people. Individual GPs would not be compelled to join PCGs.

General core funding would continue to come from general taxation. But Moving Ahead suggests that local health and social services committees should be able - with local agreement - to 'supplement the core NHS and social services through local council revenue'.

It also proposes that health and social services committees be allocated additional funding from the National Lottery for public health initiatives - from 'environmental improvements' to public places, to long-term support for healthy-living initiatives such as social clubs and leisure facilities. The key to local funding is the idea of 'core services'. The Liberal Democrats propose that government, and the Scottish parliament - and Welsh and Northern Irish assemblies - decide, after debate, what core services will be provided, and, by definition, which will not.

The proposed rationing model is based on the Dunning committee in the Netherlands, which used four criteria to prioritise:

whether the service or treatment concerned is necessary from the community's point of view;

whether it is effective;

whether it is efficient;

whether it could be left to personal responsibility.

'Having done that, it's open to the local health and social services committee to say that's all fine and grand but in our area we have, say, a large number of sickle-cell anaemia sufferers, therefore we are going to raise extra money from council tax to do these things that are not part of the national agenda,' says Mr Hughes.

He adds: 'There would be no inequality of access for core services and waiting lists.'

Core services would be defined in an annually updated NHS contract - debated and agreed in respective parliaments between NHS users and providers.

It would set out the rights and responsibilities of health professionals and the patient, and set out guaranteed services and quality standards. It would 'guarantee that no patient will be on a waiting list for more than six months before treatment'. This target would be achieved in three years.

Shorter maximum waiting times would be set for urgent treatment, with shorter waits for smear tests and an extension of the age range for breast screening. Public health would be taken outside government, with chief medical officers and the Health Education Authority given independence - interestingly Spencer Hagard, a former HEA chief executive who left after disagreements with ministers, is one of the paper's authors.

Nothing in the paper says how much the plans would cost. Mr Hughes says this is so the debate 'on the outputs' can be completed before 'we start on the inputs'.

He adds that the latter will come next year when 'having done the work on reinventing Beveridge, we will come up with a set of costings'.

The proposals, a first step towards a Scottish and Welsh elections manifesto next year, may change as the cost ramifications emerge.

As one party source puts it, 'there are tensions between those of us who are wedded to not cutting GDP below 40 per cent and those who feel lowering it is the key to political success'

Moving Ahead: towards a citizen's Britain. Liberal Democrats policy unit, 4 Cowley Street, London SW1P 3NB. 4.50.