Councils could be forced to fund their bed-blockers

Plans to allow hospitals to 'cross-charge' local authorities for the cost of bed-blocking are under discussion between Downing Street and the Department of Health, HSJ has learned.

The idea is based on a Scandinavian model, and would mean that when a patient is medically discharged but remains in hospital because of a lack of a social care package, the local authority would become financially responsible for their hospital stay.

The measure could work in conjunction with a good financial settlement for social services in the forthcoming comprehensive spending review to incentivise local authorities to tackle bed-blocking and meet the needs of elderly people. The move would require legislation - in the next session if it was to tie in with the spending review in the summer - but is under discussion at a senior level, with prime minister Tony Blair's health adviser Simon Stevens, DoH chief economic adviser Clive Smee and the department's delivery unit involved.

The proposal comes to light amid renewed debate over the funding of health and social care services, with both Mr Blair and health secretary Alan Milburn suggesting that taxes might be raised to increase health spending to average European levels.

King's Fund health systems programme director John Appleby, who has in the past challenged the government's calculation of the amount needed to match European average spend, played down suggestions that large tax rises were imminent. 'I can't see chancellor Gordon Brown coming forward with a hike in income tax or National Insurance because I do not think they need it.'

The government was well on the way to hitting 'their own interpretation of the EU average'- 8 per cent of GNP - Mr Appleby said. 'A 5 per cent real increase in the next few years will do it.You do not need to put up income tax to do that.'

If the Wanless report raised the target level of health spending higher than 8 per cent of GDP, tax rises could become an issue for the next general election, he said.

But Healthcare Financial Management Association chair John Flook said it was difficult to see how healthcare funding could be raised to the level enjoyed by the rest of Europe through general taxation without increasing taxes.'There are signs that executives are getting concerned about the cost of meeting policy commitments or targets for next year.'

NHS Confederation policy director Nigel Edwards said it was important for health and social care funding to be considered together.'It has become increasingly clear that unless you fix the social care system at the same time as the health system, the money just leaks out of the healthcare system into social care.'