The Government’s review of social care has deferred its decision on the Dilnot proposals until cheaper options have been considered.

Instead of capping individual lifetime contributions at £35,000 in order to increase access to residential care, the coalition intends to consider a much higher cap and other potential solutions.

The decision has disappointed elderly care charities and patient groups, but will relieve NHS leaders who feared the Dilnot measures would be funded from the NHS budget.

A year ago, economist Andrew Dilnot (pictured) recommended that the Government invest heavily in residential care to reduce the costs of elderly care to the NHS.

The measures he proposed, which included capping individual spend at £35,000 and raising the means-tested threshold for contributions from £23,250 to £100,000, would cost £2.2bn per year.

Health Secretary Andrew Lansley said a cap was the “right basis” for change, but a decision would need to be made in the next spending review.

The Government will consider raising the cap to £75,000, charging an upfront fee for elderly people to ‘opt into’ the capping scheme, or funding it by cutting other benefits for the elderly such as free bus passes.

Measures introduced by the social care review, described by Lansley as “the most comprehensive overhaul of social care since 1948”, include: a ‘deferred loan’ scheme allowing the costs of residential care to be taken (with interest) from the individual’s estate after their death: and a national threshold for access to care, replacing the variable thresholds currently imposed by councils.

The Dilnot proposals are supported by the Alzheimer’s Society, whose Chief Executive Jeremy Hughes commented: “Millions of people had been promised radical reforms, but today they are being massively let down.”

The NHS Commissioning Board has appointed Dr Martin McShane, Commissioning Director for NHS Lincolnshire, as its long-term conditions lead.

The appointment of a director for domain 2 of the NHS Outcomes Framework follows that of Sir Michael Richards as cancer lead (domain 1).

Directors for the other three outcome domains will shortly be appointed.

With a background in vascular surgery and general practice, Dr McShane is an experienced PCT leader and a member of the DH’s Forward Thinking strategy unit.

Dr McShane said his clinical experience would help him to “listen and understand what will support professionals to deliver the best for patients,” and that he would “work closely with colleagues across the clinical domains to ensure clinical leadership is at the heart of the NHS Commissioning Board.”

The five directors for the outcome domains will all be drawn from PCT, SHA or DH redundancy pools, though the Board’s Deputy Medical Director role – its leading GP position – will be open to all qualified candidates.

The NHS has underspent its budget for 2011–12 by £1.7bn, but only £300m (18%) of that has been kept for next year’s budget.

The requirement to return £1.4bn to the Treasury breaks Sir David Nicholson’s promise in October 2010 that “every penny” saved by the NHS would be reinvested in patient care.

It also means that while the NHS budget increased slightly relative to 2010–11, there was a small drop in real-terms NHS spending.

The NHS could only use the ‘budget exchange’ mechanism, which allows a department to retain unspent budget, for a fifth of its cost savings.

Its underspend was the largest by any Whitehall department, though the NHS was the only department whose budget was not reduced.

The NHS savings target of £20bn by 2014 is not meant to include budget cuts: it represents the savings needed to keep budget increases very slight despite inflation and demographic changes.

In 2010–11 the NHS underspent £900m, of which only £400m was retained by the department.

The loss of budget savings is a consequence of the Government’s 2010 spending review, which abolished the ‘end of year flexibility’ arrangement that allowed a department to roll over unspent funding.

Health Minister Simon Burns commented that NHS savings in 2011–12 had been made by cutting back on “bureaucracy and IT”, while spending on “frontline services” had increased by £3.4bn.