It is Groundhog Day at the Department of Health as the finishing touches are made to a Green Paper on the future of long-term care for the elderly. Turn back the clock ten years and there was the Royal Commission for Long-Term Care. The Health and Social Care Act was passed in 2001, but four years later the Future of Social Care Green Paper was published and, in 2006, the recommendations of a review by Sir Derek Wanless were thrown into the mix.

It all adds up to a long list of promises that Something Must Be Done to overhaul the system of long-term care, a list that, understandably, is often met with a weary scepticism.

The timing for this month’s paper could not be worse. There is no money to invest in long-term care and, with a general election less than a year away, there is no prospect of any legislation being passed before polling day.

However, none of this appears to be dampening the enthusiasm of Phil Hope, the social care minister, who promises that this time it really is the big one. Mr Hope is sure of this for one very good reason: this time the Government has no choice but to overhaul the system.

“This is a really important opportunity for us to reshape the care system. We know the system is complex, that it is unfair, that you get different services in different parts of the country and that the funding is unfair — that someone who has worked hard all their life and bought a house has to sell it if they need to go into a care home,” he said.

“But we also have a demographic shift which will put far more pressure on the system. There are four people of working age for every retired person. In 20 years, there will be only two. We have got to find a way not only of designing a system which will give people choice and good quality of life, not just slippers and sympathy, but also look at how it will be funded.”

At the centre of the Green Paper will be a series of funding models and plans to introduce an insurance scheme. Members who pay into the scheme will have residential care paid for in the final years of their life if they suffer dementia or become too frail to stay at home.

That should mean an end to pensioners being forced to sell their homes or lower their savings to the £23,000 threshold to qualify for local authority funding. Mr Hope said: “It was clear people thought the greatest unfairness was for those who have played by the rules — put a bit aside, saved for a house — then be forced to sell their house to fund care when they want to pass most of that on to their children. I hope we can reach a consensus at the end of this where the bulk of their inheritance can be passed on to their children.”

The minister is reluctant to give firm details of how such a scheme would work. One option could be to deduct an agreed sum from the estate after death, a sort of inheritance tax. Another is a scheme that members pay into during their working life.

There will be other more “off the wall” proposals, such as a private insurance scheme similar to health insurance. Although Mr Hope added: “We will make clear that some options are less attractive.”

Unfortunately, this generation of pensioners will be disappointed that there is nothing for them in the Green Paper. Thousands will be left facing the prospect of selling their home if residential care is required. The postcode lottery for care at home will also continue, meaning free care for some elderly people and none for others, depending on where they live.

Indecision is no longer an option, though. Mr Hope said: “When the debate gets under way, local authorities will have to look at what they are providing and to whom. But the point of the Green Paper is to build a system that withstands the test of time, a system for the next 50 years.”

Explore Industry Sectors

• Need To Know

• Banking & Finance

• Construction & Property

• Consumer Goods

• Engineering

• Health

• Industrials

• Leisure

• Media

• Natural Resources

• Public Sector

• Retailing

• Support Services

• Technology

• Telecoms

• Transport

• Utilities

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive