THE failure of the Government to decide how the country's social-care system will be funded will have a "devastating impact" on elderly people struggling to cope alone, Age UK has warned.

The White Paper Caring For Our Future: Reforming care and support, published on Wednesday of last week, includes many of the recommendations made by charities during a consultation. National eligibility criteria will be introduced, to provide clarity about how an individual's needs and entitlement to care will be assessed. A draft Care and Support Bill, also published on Wednesday, makes it clear that an adult's eligible needs will be "met by the local authority, subject to their financial circumstances".

The White Paper also sets out plans to give carers the right to an assessment of their needs, with "clear entitlement to support to help them maintain their own health and well-being".

These proposals were welcomed by Dr Emma Stone, of the Joseph Rowntree Foundation, but she warned: "We'll have the best policies and laws in Europe on social care stuck on to an outdated, unsustainable, ineffective funding system."

A review commissioned by the Government a year ago, led by the economist Andrew Dilnot, warned that the current funding system for social care was in need of "urgent and lasting reform". Mr Dilnot suggested that the Government should cap the contribution that people made to the costs of their care at £35,000.

The Government said on Wednesday of last week that it supported "the principles" of this approach, but there remained "a number of important questions and trade-offs to be considered". The economic situation meant that "we are unable to commit to introducing the new system at this stage."

The charity director-general of Age UK, Michelle Mitchell, said that the delay on a funding decision would have a "devastating impact" on those currently in need of care. The charity estimates that there are almost 800,000 older people struggling to cope alone.

Louise Morse, of the Pilgrims' Friend Society, which provides care for elderly Christians, said on Monday that local authorities' eligibilty criteria for care were being "squeezed and squeezed". A focus on domiciliary rather than residential care was leading to "people just being put in pads and diapers, and being left there overnight in bed until the carer comes in the morning". How to fund the care of the ageing population was a "big ethical argument that is not being addressed".

More than eight out of ten people aged 65 will need some care and support in their later years.

"Housing crisis". The Bishop of Chester, Dr Peter Forster, has called on the Government to invest in building social housing to address the "housing crisis" facing the country.

In the House of Lords, on Thursday of last week, Dr Forster said that the lack of housing and the capital cost of new-build housing was leading to rising rents and a soaring housing-benefit bill. This situation is acknowledged in the Government's housing strategy, in which the Prime Minister said that "for decades in Britain we have under-built. . . the economic and social consequences of this failure have affected millions."

The Bishop questioned whether the answer was to promote a return to greater levels of home ownership, and said that the private sector and housing associations alone were "unlikely" to be able to respond to the need. "Is there not a strong economic case for investment by the Government alongside their other schemes and the private sector in general?" he asked.

The housing charity Shelter reports that the private rented sector has expanded from 1.7 million households in 1988 to 3.6 million in 2010/11, and will overtake the social rented sector within a few years. Spending on housing benefit has nearly doubled in the past decade to an estimated £21.6 billion.

Shelter estimates that approximately 240,000 new homes a year are required, a third of which should be social housing.