It is rather like climbing a Scottish mountain. Having reached one summit we realise that there is another even higher peak before us which we must also conquer.�

It is rather like climbing a Scottish mountain. Having reached one summit we realise that there is another even higher peak before us which we must also conquer."

In Lord Sutherland's analogy, free personal care for the elderly is the first hill, behind which looms the even greater challenge of how to deal with the growing impact of Scotland's rapidly ageing population.

He made the comparison yesterday as he announced the findings of his review of the first five years of Scotland's flagship policy.

The aim of the policy, to make personal and nursing care free for every older person who needs it, is based on a report from the Royal Commission on the Long Term Care of the Elderly in 1999, which Lord Sutherland chaired.

Implemented in 2002 by the previous Labour/Liberal Democrat executive, the policy went on to form a key part of the current SNP Government's election manifesto.

If the situation now is a false summit, the route up to it has also been far from easy to follow with confusion over what services should be paid for, and concern that the policy is costing millions more than originally expected.

Summing up his findings - summarised below - Lord Sutherland said that "despite some practical difficulties in its formative years" the policy had proved popular and "worked well in the largest part".

Reaction to the report was almost universally positive.

Health Secretary Nicola Sturgeon said: "The report clearly states that the UK Government should not have withdrawn the Attendance Allowance (AA) resources previously paid to residents in care homes, providing savings currently valued at over £30m a year - savings that should have been made available to benefit elderly people across Scotland."

Liberal Democrat health spokesman Ross Finnie said: "When it was introduced, Liberal Democrats said the UK Government was wrong to withhold the Attendance Allowance. Lord Sutherland has confirmed the UK Government is wrong - surely now is the time for ministers to pay up."

For the Tories, Mary Scanlon said: "The key issue is to ensure that free personal care is administered consistently. My colleagues have been instrumental in highlighting the problems with people being charged for food preparation in some areas and it is absolutely essential that we implement a clear, consistent programme for this."

While Margaret Curran said Labour had a "consistent position" AA should be paid, she also said: "The report raises vital issues for the future of free personal and nursing care for the elderly in Scotland. Labour fully accepts the conclusions of the report and its recommendations. We call on the SNP administration to fully fund the shortfall to ensure that the needs of older people are met."

The report was also welcomed by the Convention of Scottish Local Authorities, whose health spokesman Councillor Ronnie McColl said: "We accept any additional resource the government can find to address the deficit will be used to improve outcomes for vulnerable older people."

What's working and what's not
By and large, the policy is meeting its aim of ensuring access to high-quality, responsive long-term care in an appropriate setting, on a fair and equitable basis.

Some 50,000 older people in Scotland are benefiting from the policy, the vast majority of whom receive their payments and services promptly and easily.

But there is wide variation in how the policy is implemented, a failure to monitor cost and plan for the future, and funding problems.

Whether food preparation for elderly people receiving care in their own homes should be free is a major question, still unresolved.

The review group believes the original intention of the policy was for preparing meals to be free, where a need was assessed. But eight councils were still charging for meal preparation as the wording is open to interpretation.

The Scottish Government says it will consider changing legislation if a consistent definition can be agreed, which was welcomed.

Another issue is that of defining "ordinary residence" in cases where, for example, a pensioner needing to move into a care home asks to be placed outwith their home area to be near relatives, causing disputes between councils over who should pay. The review calls for more clarity and guidance.

Waiting lists are relatively small, but the ways they are used varied widely across Scotland. The review group believes that there should be a national target of six weeks from the time a person is assessed as needing free care to the time they receive such care.

Linked to waiting lists is the issue of eligibility, where again the review group found wide variation in the criteria used by councils. It calls for a standard assessment.

Sustainability
For free personal care to be secured for the long term, the inconsistencies outlined need to be ironed out to ensure it helps, and is seen to help, everyone equally, regardless of where they live.

The policy is affordable in the next five years, but after that the impact of the rise in the number of older people will hit hard.

As a policy it has to be considered as a key part of wider long-term care, and not an optional extra. Yet since it was introduced it is clear that it is difficult to predict future demands and costs.

During that time significant changes in the demographics of the population have included a steep increase in the number of people living into their 90s. Technologies have been developed to help people live independently in their own homes for longer, thus reducing the cost of care.

The most critical issue is the question of what the long-term costs will be and the subsequent affordability of the policy.

Community care should be provided increasingly through joint funding, between health authorities and councils, working in a more holistic way.

This approach, taking in the bigger picture, must incorporate appropriate housing for people receiving care at home, improving on the limited existed establishments of care homes and sheltered accommodation and creating new forms of "assisted" living.

Better models already created, known as extra care housing, would make a key contribution to maintaining the independence and dignity of older people.

There is a need for workforce planning to address growing needs for staff in future, to ensure quality of care does not suffer.

Funding
Councils received an extra £143m for the first full year of the policy, from 2003-04. At the same time, the UK Government withdrew Attendance Allowance payments for residents in Scottish care homes who became eligible for free personal care.

Almost from the start, councils said they did not have the money to meet the policy's full costs.

Despite various efforts by the then executive, the Convention of Scottish Local Authorities and parliamentary committees, no set conclusion was reached.

In February, an Audit Scotland report found that while sufficient funding had been provided in the early years of the policy, there was a widening gap, estimated at either £46m or £63m in 2005-06.

The review estimates an extra £40m annually for the next five years is needed from the Scottish Government to pay for free personal care. The UK Government should reinstate £30m-a-year Attendance Allowance payments, which could meet the lion's share of that shortfall.

Even if demographic projections are accurate, there remain uncertainties associated with the future cost. They include "healthy" life expectancy (how long people will remain healthy); how much the care burden should be shouldered by relatives and friends; and balance of care, with moves to home care generally costing less than homes and hospitalisation.

POINTS FOR REFORM

Short term
1 An extra £40m annually in funding from the Scottish Government for the next five years.

2 Annual increases in residential and nursing care fixed-rate allowances in line with inflation.

3 Standardised assessment and delivery of care with set target waiting times.

4 Clear national priorities and expected outcomes for older people.

5 Accurate monitoring and reporting of costs.

6 Improved local account- ability through a performance framework.

7 The reinstatement of £30m- a-year attendance allowance funding from the UK Government.

8 Renewed bid to improve public information and understanding of the policy.

9 Resolution of council boundary issues around "ordinary residence" legislation and guidance.

Within the next five years
10 Regular reviewing of demand for care and remodelling of services with costs reflected in future council budgets and planning.

11 A review of all public funding for long-term care of the elderly including UK Government benefit funding such as the attendance allowance and disability living allowance.

Longer term
12 Establishment of a long-term vision for dealing with demographic change, incorporating factors from care to pensions and housing to transport.