Elderly to be given care cash

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Millions of pensioners will be handed control over how and where money is spent, rather than relying on social workers to dictate what help they need to live in their own homes.

Younger disabled people frustrated by their lack of independence could also access the "personal budgets", under the plans due to be rolled out by the Government from next April.

Individuals will be means tested to assess their health and personal needs, and councils will then pay the cash into their bank accounts or those of nominated relatives.

After a series of pilot projects, ministers are believed to have become convinced that the "baby boomer" generation moving towards retirement will demand more control and a higher quality care than is currently available.

The changes are designed to create more competition among care agencies vying for a share of the £8 billion market.

Councils will be given £520 million over the next three years to fund the move and improve services.

Prime Minister Gordon Brown said the measures would give "real control" to individuals.

"These proposals for personal budgets will allow all those who would benefit from a personal budget to receive one, putting real control into the hands of those in care and their carers, leading to far more personal and responsive care," he added.

Health Secretary Alan Johnson added: "Our commitment that the majority of social care funding will be controlled by individuals, though personal budgets represents a radical transfer of power from the state to the public. Everyone, irrespective of their illness or disability has the right to self determinations and maximum control over their own lives."