The £2bn question:

Will Osborne agree to fund reform of elderly care?

Treasury could obstruct proposals to reform funding of social care

Health chiefs raised fears last night that the Chancellor, George Osborne, could veto proposals to overhaul long-term care of the elderly because of their £2bn-plus cost to the public purse. They warned that hospitals could face a crisis in the pressure of caring for an ageing population and that there would be more "terrible" instances of neglect and abuse of the vulnerable pensioners.

Moves to salvage a system which forces many older people to sell their homes in order to afford huge bills will be detailed today by the economist Andrew Dilnot. He will propose a cap of between £35,000 and £50,000 on the amount people have to pay towards their care in their last years – with the taxpayer picking up the balance. His proposals would leave the Treasury with an estimated bill of more than £2bn – cash that would have to come from taxation or cuts elsewhere in Whitehall. Either move would be extremely unpalatable as the Government presses ahead with austerity measures.

A Liberal Democrat source has predicted that Mr Osborne will strangle the proposals "at birth" – a fear reflected privately by senior figures in the health and charitable sector. Treasury sources insisted they would not kick the Dilnot plans into the long grass and were keen to go ahead with reform – but stressed that they would act only on the basis of consensus with other parties and groups representing the elderly.

Andrew Lansley, the Health Secretary, warned there were many practical problems to be resolved before the Government could present its final recommendations, although he said he would accept the proposal for a cap.

Mike Farrar, the NHS Confederation's chief executive, described today's publication of Mr Dilnot's plans as a "make-or-break moment" both for health and for social care. "The enormous pressures that are facing social care will spill over into the NHS unless there is action to shore up the whole system," he said. "We need a solution. Otherwise there will be a financial crisis, patients and carers across the country will suffer and the cost to the taxpayer will be greater."

He challenged political leaders to take difficult decisions now to ensure the public knew how much they needed to contribute towards their social care.

Andrew Chidgey, head of policy for the Alzheimer's Society, said the charity had seen reports suggesting Mr Osborne and Treasury ministers were baulking at the cost of the plans. He added: "If politicians fail to tackle this vital question of public interest it will be a betrayal of millions of people."

Treasury sources said last night there was no question of ducking the hard questions set out by Mr Dilnot and acknowledged the extra cost of care would have to be found through taxation or cuts to other services. One possible alternative is that it could be found in the next public spending review. They said Mr Dilnot's recommendations contained many positive features, notably the new protection for middle-class families above the assets threshold.

But they stressed a new stable system for social care had to be agreed on all sides and welcomed an offer yesterday from Ed Miliband, the Labour leader, to participate in all-party talks on the issue. They argued that consensus was essential to reassure insurance companies offering policies to cover care costs that an incoming Labour government would not rip up the new system.

The Dilnot recommendations are expected to suggest a sliding scale of between £35,000 and £50,000 on the limit pensioners pay towards their care. They would be urged to take out insurance to cover that expense. At the moment, bills can exceed £100,000 for prolonged periods in residential care.

At present, people with assets totalling more than £23,250 have to contribute towards their care; that limit is likely to be raised to around £100,000.

The report is understood to recommend that free care levels be calculated on the basis of rates paid by local authorities. That means families could have to pay the balance if an elderly person is living in a more expensive residential home and that care bills might only be picked up when the threshold of £35,000 to £50,000 of care is reached at council-set rates.

Mr Lansley said the Government would give the Dilnot blueprint a "very positive response" and treat it as the "basis for engagement".

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Barn owls are among species that could be affected
charity appeal
After another poor series in Sri Lanka, Alastair Cook claimed all players go through a lean period
cricketEoin Morgan reportedly to take over ODI captaincy as ECB finally wield the axe
Life and Style
food + drink
Arts and Entertainment
a clockwork orange, stanley kubrick
Have you tried new the Independent Digital Edition apps?
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Finance Director

£65000 - £80000 per annum: Recruitment Genius: Finance Director required to jo...

Recruitment Genius: Medico-Legal Assistant

£15000 - £25000 per annum: Recruitment Genius: This is a unique opportunity fo...

Ashdown Group: (PHP / Python) - Global Media firm

£50000 per annum + 26 days holiday,pension: Ashdown Group: A highly successful...

The Jenrick Group: Quality Inspector

£27000 per annum + pension + holidays: The Jenrick Group: A Quality Technician...

Day In a Page

Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas