The farthest reaching proposals in more than a decade for the funding of long-term care for the elderly and disabled have met with a cautious government response , amid fears in Whitehall over the £1.7bn cost of the scheme.
As the economist Andrew Dilnot received thanks in the Commons for his "immensely valuable contribution", government sources expressed concerns about implementing the plans in full.
"We genuinely like this report, which has clever and innovative ideas," one senior government source said. "But it does come with a price tag."
The government raised concerns about the Dilnot commission after the former director of the Institute for Fiscal Studies outlined plans to overhaul the system for funding care.
The commission set out a plan by which no one would have to pay more than 30% of their savings and assets towards meeting their needs. As well as the proposed cap, it suggested raising the limit on assets a person may hold while qualifying for state help from £23,250 to £100,000.
People would still be liable for the costs of accommodation and food in a care home, but this would be limited to £10,000 a year.
The package would add an initial £1.7bn a year to government spending, rising to £3.6bn by 2025. But Dilnot said this was equivalent to 0.25% of public spending and described it as "a price well worth paying" to take away people's fear of having to sell their homes and spend almost all their wealth on care.
Charities, welfare groups and care providers largely welcomed the commission's proposals, which were based on a suggested cap of £35,000 on the amount any individual should have to pay towards their lifetime care costs.
The health secretary, Andrew Lansley, warmly thanked Dilnot. But, in a Commons statement signed off by the Treasury, he doused expectations of complete and early acceptance of the proposals by referring repeatedly to them as merely "a basis for engagement" and announcing a further process of consultation. A white paper, previously promised by the end of the year, would now appear next spring and legislation would follow "at the earliest opportunity thereafter", he said.
Lansley said: "The commission recognise that implementing their reforms would have significant costs which the government will need to consider against other funding priorities and calls on constrained resources. In the current public spending environment, we have to consider carefully the additional costs to the taxpayer of the commission's proposals against other funding priorities."
The Dilnot commission said it wanted to see implementation of its plan "with pace". But Dilnot said he had not expected ministers to immediately accept it and he was relaxed about the idea of a white paper before next Easter with implementation "in the area of" 2014.
Government sources indicated that ministers considered the plans thoughtful but ambitious and costly. Three key proposals which impressed them were:
• The cap, which would, according to ministers, enable a proper private insurance market to work.
• A simplified means testing system.
• Better national standards.
The government source said: "This government does have an appetite for big reforms. But reform of long-term care must stick for decades. It is better to introduce this with consensus. This needs to include how we fund this."
Ed Miliband attempted to pre-empt the government by calling for cross-party talks to open with David Cameron and Nick Clegg before the summer recess. The Labour leader offered to drop his party's tentative proposal at last year's general election to introduce compulsory contributions to fund long-term care. This was dubbed a "death tax" by the Tories, prompting the collapse of all-party talks.
The three main parties are moving with immense care to ensure that neither is blamed if another round of cross-party talks fail after the publication of Dilnot's findings, the most ambitious report since the royal commission into long-term care chaired by Lord Sutherland in 1999. Government sources believe Labour support for the Dilnot plans would give them cover to help people rich in assets.
John Healey, the shadow health secretary, described the Dilnot report as "a starting point". He echoed language Cameron used in his "big, open and comprehensive offer" to the Liberal Democrats after the general election. Healey added: "The Labour leader has made a big offer to the prime minister to put politics aside and to work to see a better, fairer and lasting system of support for our older and disabled people in England."
Commission member Dame Jo Williams said she would be disappointed if the report was kicked into the long grass. "But disappointment is not an adequate word; 'disgusted' comes to mind,"
she added.
Although the commission was appointed by the coalition government as one of its first acts, the Treasury is known to be highly anxious about the cost implications of the recommendations – even though they would fall largely after the scheduled clearing of the fiscal deficit.
Charities and lobby groups were near-unanimous in calling on the government to act without delay. In a joint statement, 23 leading care organisations welcomed the commission plans as "a strong foundation" for reform and said: "It is now vital that government sets out a clear timetable for change and does so quickly."
Mark Goldring, chief executive of learning disability charity Mencap, said: "Now is the time for monumental change and it is vital that the government does not bury social care reform."
One note of dissent was struck by Stephen Burke, chief executive of charity United for All Ages, who said the proposals were regressive because richer families would benefit disproportionally from the cap. He warned: "This could be seen as a care poll tax for the so-called 'squeezed middle'."
The commission hopes that its recommendations, which apply in the first instance to England but which could also be picked by the Welsh government in a forthcoming social services bill, would spark the insurance sector to offer policies that people could take out to cover their capped liability.
However, the commission is calling also for all local councils to offer loans to homeowners against the value of their properties. The loans, on which interest would be charged to cover councils' costs, would be repayable on sale of the properties after death.
