EVERY older person facing care home fees must be offered a local council loan to avoid having to sell their own house, the Government will say today (Thursday, July 17).

Town halls will be ordered to draw up comprehensive “deferred payment” schemes and ensure local people moving into care are aware the option is available.

They will be allowed – for the first time – to cover running costs by charging interest on the repayments, which will be made from the resident’s estate, after they die.

And local authorities will also be required to arrange financial advice to help older people plan for their future, when the flagship Care Bill comes into force in 2015.

Hailing the package, care minister Norman Lamb said: “No one need face unlimited care costs or the prospect of selling their home in their lifetime.”

But there were immediate fears that cash-starved councils will struggle to fund the extra help required, despite an extra £335m promised by the Government.

At present, just 54 people have deferred payment deals with Durham County Council and other North-East town halls are thought to have relatively few arrangements.

Across England, only 8,500 people were in deferred schemes last year, but they were costing councils a total of £197m.

The department of health (DH) said existing schemes were “patchy”, with some councils rejecting people on grounds of age, or if they had sizeable assets.

Council leaders had asked for £500m extra, with ministers admitting a “few hundred thousand” extra people across England will now come forward.

Furthermore, in 2015, local authorities will be attempting to cope with a further ten per cent cut to their grants - losing £2.1bn across England.

Labour-run Durham has already warned it must find a further £100m of savings, of which £60m have not yet been identified.

And a study by the Local Government Association (LGA) found that every local council in the North-East was in danger of going bust, by 2020.

The Association of Directors of Adult Social Services has welcomed extra cash for social care, but warned: “That could be made more difficult while local government begins slowly to disintegrate.”

Mr Lamb said deferred payments would work like a “draw-down mortgage”, with care home fees added on each week, rather than in a lump sum.

A consultation will also explore how to ensure people received help to maintain, rent, or sell their home if that is what they chose to do.

The minister added: “No one wants to face an unknown future. This overhaul of the way care is paid for gives people the certainty and peace of mind we all deserve.”

The deferred payment schemes will be introduced one year ahead of a new £72,000 cap on lifetime care costs - more than twice the £35,000 figure recommended by an independent review.