The government has still not answered crucial questions over its plans for long-term care of the elderly. With an ageing population, how will it fund a system set to cost a lot more? And will people still have to sell their homes to fund care? Mark Gould reports

It is up there with global warming and obesity on the world 'to do' list: how can society care for the growing number of people who cannot care for themselves? But, given that it is such a significant subject, chancellor Alastair Darling has kept surprisingly quiet about it.

Buried on page 100 of his pre-budget report and comprehensive spending review delivered last month, Mr Darling whispered plans for a totally new way to finance and provide adult long-term care.

'The government has three requirements for reform: it must promote independence, well-being and control for those in need; be consistent with the principles of progressive universalism; and it must be affordable,' the report said.

Free personal care for all is not on the cards, despite the pleas of Sir Derek Wanless, the King's Fund and the Joseph Rowntree Foundation among many. So the hated means test will continue - and families may still face the prospect of selling their homes to finance care.

Instead Mr Darling said any new system will work on the principle of sharing costs between the individual and the state to provide a universal minimum entitlement augmented by 'progressive' elements, which may translate as a co-payment scheme where the government matches personal contributions.

Under the current system about half of elderly care funding comes from people's own pockets. But the means test requires many elderly people to undergo the emotional wrench of selling the family home. This system, says Stephen Burke, chief executive of charity Counsel and Care, is 'widely perceived as unfair, inconsistent and lacking transparency'.

Mr Darling wants a new system that places the individual at the centre of care and support systems, 'giving them more personal choice and control and directing state resources to where they can have the greatest impact on well-being'.

There are still many tantalising questions: how serious is the government about creating a new system that everyone says will cost a lot more money? Will they fund it from higher taxes or find the money somewhere else? And how far has it developed a model that it might want to use?

Mr Burke insists the new funding model must include fairer sharing of care costs between individuals and the state, through extra government resources, as well as making better use of existing public funding and better use of individuals' own assets.

'Unless local authorities give higher priority to care for older people [over other services], it is likely that eligibility criteria will continue to tighten and fewer older people will get the care and support they need from councils. This will mean even more older people struggling to cope on their own or with the support of families and carers, or having to pay for growing care bills themselves.'

Next year the government will embark on a major consultation leading to a green paper identifying key issues and options for reform.

There is general agreement that the need for reform is urgent, given demographic trends. By 2051, the UK population is projected to rise by nearly 7 million to more than 67 million. Nearly 25 per cent of the population will be over 65, and 5 per cent of these over 85, including 40,000 centenarians, according to the Office for National Statistics.

The Alzheimer's Society this year estimated that dementia costs the UK£17bn annually, and that one in three people will end their lives with a form of dementia. Some 700,000 people in the UK are affected by dementia, more than half of whom have Alzheimer's disease. But in less than 20 years, it is estimated a million people will be living with dementia, and this will soar to 1.7 million people by 2051. Dementia affects one in five people over 80 and one in 20 people over 65.

Formalising ties

In the UK retirement hotspot of the English Riviera towns along the south coast, the demographic time bomb is already exploding.

Bournemouth and Poole primary care trust director of service provision Sarah Elliott welcomes the consultation and green paper. Her PCT was one of the first to pilot Partnerships for Older People Projects - a£60m scheme designed to cut hospital admissions by providing the right support to enable people with even complex conditions to live independently.

She says the green paper should formalise ties between health, social care and the voluntary and charity sectors to help them work together to keep people at home.

And she is an advocate of direct payments to families so they can control their own budgets and personalised care packages. While she feels the bulk of funding for essential care should come from a national minimum entitlement, she thinks extra services, such as respite care for families, could be paid for by the families themselves.

Future housing for the growing numbers of elderly singletons should also be designed to beat isolation and promote inclusion. 'One of the aims of our Partnerships for Older People Project was also to identify older people who were living at home but, perhaps due to the death of a spouse, in danger of becoming isolated and not accessing services that could help. We need to ensure a new system develops local intelligence systems that can be alerted when the milkman doesn't see someone or they don't collect their newspaper in the morning.'

She also feels the government should look at a more flexible financial model that means people do not have to sell their homes. 'It's a major decision to sell a house and in many cases people who have to undergo rehabilitation - perhaps after a stroke - can actually recover enough to go back home. There should be some financing model that allows this to happen.'

King's Fund chief executive Niall Dickson says the government must be true to the text of its pre-budget statement and 'replace' the old system. Doing this will require significant extra funding, he says.

Like Wanless, he suggests a national 'entitlement' triggered by a needs assessment that can be topped up by extra payments. He feels that the government decision that the green paper will apply not just to the elderly but to all people requiring long-term care adds extra complexity. How, he asks, will any entitlement dovetail with disability living allowance and other benefits?

Some form of shared equity scheme - 'like a mortgage in reverse, where you own less of the house the longer you are receiving care', could be constructed so that money from property could be released to pay for care without the trauma of selling a family home, says Mr Dickson.

'The anxiety factor is a real one and a system can be devised where people do not have to go through that "I have got to lose everything" feeling,' he says.

Any final legislation will also draw on other areas of policy including the upcoming end-of-life care strategy and the 2005 green paper Independence, Well-being and Choice, which set out a vision for adult social care over the next 10-15 years. The emphasis is on personalised services and greater choice by giving service users their own budgets under the concept of 'self-directed services'.

The concept is seen as big improvement on the system of direct payments introduced in the 1990s. Uptake was, and is, poor as many people with mental health problems are reluctant to become in effect small businesses employing various care and support staff.

Jane Johnstone works for Manchester city council where she manages care for adults with mental health problems. She has been seconded to Manchester Mental Health and Social Care trust as a general manager responsible for implementing the proposals in Independence, Well-being and Choice, which start from the basis that any new scheme will be cost-neutral.

She feels that many of the good things going on in her patch could be applied to any long-term care situation. Self-directed care is being offered to people with physical or learning disability or the elderly.

Virtual payments

'Each service user is assessed which includes an element of self assessment and carer assessment. They are then offered an individual budget which can be a real sum or a virtual budget.' The latter, she says, is 'very popular given the poor take-up of direct payments'. 'People did not want the stress and anxiety of dealing with employee legislation, PAYE and whatever and you don't want to set people up to fail.'

Where a service user opts for a virtual budget it will be managed by a third party known as a broker. This could be anyone the service user chooses - a social worker, care manager, friend or relative, or a local charity such as Age Concern.

'The whole idea is to meet the service users' needs in the most resourceful and creative way possible, maximising choice because at the moment choice (for those not on the scheme) is restricted to the services provided directly by health and social care,' Ms Johnstone says.

She adds budgets can be used to fund supported living or keep people at home for as long as possible - maximising their independence.

People who have been in hospital or long-term rehabilitation after, for example, a stroke are also offered 're-ablement services' - a short course that helps people re-learn living skills lost while in hospital so that they can live as independently as possible.

NHS Confederation deputy policy director Jo Webber says it is crucial that any reformed system allows people to get the right support - perhaps in the form of a Manchester-style broker - to help navigate the complex care system.

'It may be that the core entitlement is simply information and support - we live in a world where the current Whitehall buzz phrase is "progressive universalism" - help for all and extra help for those with no visible means of support, no house or savings to draw on.'

And she feels reforms that give people targeted advice about services, and the option of extra services they pay for themselves, are crucial given the financial squeeze in local authorities. This means that, by 2009, all councils will only be able to give free care if assessed needs fall into the top two bands - 'critical' and 'substantial'.

'We are approaching the stage when we will have a million people with dementia, a lot of old carers whose health may not be great. We need to get entitlement and eligibility right and we need to have the debate about why we have saved up and bought houses - is it to hand [them] on to our families or to finance care when we are old?'

South coast surge

Bournemouth and Poole primary care trust is responsible for the care of far more over-80s than the national average, being in the heart of the English Riviera.

Poole in particular has experienced an increase of 36.1 per cent in those aged over 85 since 1991, while Bournemouth has seen an increase of 2.5 per cent in this population. Some 66,726 people (18.8 per cent) of the PCT population are aged 65-plus, 36,210 (10.2 per cent) are 75-plus, and 11,363 (3.2 per cent) are 85-plus.

Now the NHS and local authorities are working to ensure more elderly people can live independently through its Partnerships for Older People Projects.