NHS England chief executive Simon Stevens will today announce a major programme extending the use of combined health and social care personal budgets.

Mr Stevens, addressing the Local Government Association annual conference in Bournemouth, will describe the move as a “radical new option” for councils and clinical commissioning groups to adopt.

Areas will be invited to bid to pilot the initiative in 2015-16. In an interview with the Guardian Mr Stevens said 5 million people could have combined health and care personal budgets by 2018. He added this would involve “billions” of pounds of NHS and local government funding.

NHS England said in a statement that the programme “will for the first time blend comprehensive health and social care funding for individuals, and allow them to direct how it is used”.

It said “wider scale rollout of successful projects is envisaged from 2016-17”.

NHS England said: “Four groups of high-need individuals are likely to be included in the first wave from next April 2015, although councils, voluntary organisations, and NHS clinical commissioning groups may also propose others.”

The initial groups to be targeted will be people with long term conditions, including the frail elderly at risk of care home admission; children with complex needs; people with learning disabilities; and people with severe and enduring mental health problems.

Voluntary and third sector organisations will be commissioned to support personal care planning, advocacy and service “brokerage” for the individuals in the programme, NHS England added.

It said the approach “extends and combines” the existing use of personal budgets in NHS continuing care.

Mr Stevens will say: “Patients, service users and carers have the biggest interest in getting things right, but they can only do so if we give them real power to shape their own care. 

“If Beveridge was alive today he’d clock the fact that - given half a chance - people themselves can be the best ‘integrators’ of the health and social care they are offered.

“We need to stop treating people as a collection of health problems or treatments. We need to treat to them as individuals whose needs and preferences should be seen in the round and whose choices shape services, not the other way round.”

Further details will be published at the end of July with a formal invitation for expressions of interest. NHS England will provide technical support to develop projects and fund independent evaluation.