CASH-strapped Hampshire and Southampton councils will be told to provide loans to pay for the care of elderly people.

Under reforms announced by the Government yesterday, the loans, which would accumulate interest, would be repaid after a person died.

Ministers said it would mean elderly people no longer had to sell their home while they were alive to pay care costs.

Hampshire’s executive member for adult social care Cllr Felicity Hindson welcomed the idea of the reforms saying the county actively invests in services to help older people stay independent for as long as possible.

But questions were raised as to how the reforms would be funded.

And last month experts warned the system in Hampshire was “at breaking point” after a Daily Echo investigation revealed some vulnerable elderly people were receiving just 15 minutes of care every day.

Both Southampton and Hampshire County Councilshave made cuts to their adult social care services in recent years under pressure from a squeeze on funding. Around 550 elderly people lost their entitlement to free care in the past two years in Southampton – a 49 per cent reduction.

The county council, meanwhile, is slashing £21 million from its adult social budget, with the fees charged by councilrun care homes increasing.

Health Secretary Andrew Lansley told MPs a universal threshold would be set up to end the “postcode” lottery of eligibility criteria in different areas.

Currently both Hampshire and Southampton councils offer help to those whose needs are assessed as “substantial”.

The minister also revealed £300 million would be switched from the NHS to fund social care over the next two years.

But there was no word on a cap on costs that experts say is needed – or where funding would come from.

Cllr Felicity Hindson, said: “I am pleased to see that our investment in Extra Care facilities and models of care is being backed by the White Paper with the promise of financial support, but would like to see a more significant financial commitment from Government so that we can offer even more older and disabled people the choice of independent living with support in a property which better meets their needs.”

“The paper imposes new duties on local authorities with very little new funding, so it is disappointing that there is no settlement on the future funding of adult social care.”