Millions of pensioners and younger disabled people will be given direct control over how money is spent to pay for care in their homes, rather than relying on social workers to dictate what help they need. LAURA DEVLIN reports on a radical overhaul of the welfare system that aims to give greater choice and dignity.

Being cared for at home - whether because of a disability or through the infirmity that comes with old age - is vital to help the cared-for maintain their independence and the structure and familiarity of day-to-day life.

But choice on what care is received, and from whom, has always been a decision that has rested with local authorities who have to test the individual's needs.

From next April, the elderly and people with disabilities will be handed cash to fund their own care, giving them the freedom of deciding how that money is spent.

Whether they decide to use the cash to fund a traditional care plan or weekly exercise classes and help with trips to the supermarket, the person who needs the care will have control on how best the "personal budget" can be used.

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, including in Norfolk, 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 also designed to create more competition among care agencies vying for a share of the £8bn market.

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

Chris Mowle, cabinet member for adult social services, welcomed the government's announcement which follows trials in Norfolk involving home-care support for people with mental-health problems.

Earlier this year the county council passed controversial plans to privatise the majority of Norfolk's home-care support over the next seven years.

"Our pilot project, involving individual budgets for people with mental-health problems, has proved very successful providing people with much more flexibility in the care they receive," said Mr Mowle.

"Even before this government announcement, we had decided that the time was right to consider how to build upon the success of this trial.

"In principle, we are right behind the extension of personal budgets to elderly and disabled people who need care, but who also want to retain independence and a greater measure of control in their lives."

Prime minister Gordon Brown said the measures would give "real control" to individuals, leading to far more personal and responsive care.

Health secretary Alan Johnson, who formally unveiled the plans, said everyone, irrespective of their illness or disability, had the right to self-determinations and maximum control over their own lives.

Overall, the "landmark" agreement has been praised as a step in the right direction to respond to the needs of the individual, and of the growing elderly population.

But it has been suggested that having that freedom could become confusing and burdensome for some, and that the appropriate support and guidance to help find the right care was as vital as the care itself.

Annette Carmody, a day-centre manager for Age Concern in north Norfolk, said she believed that about 80pc of the elderly people who use the service do not have family, or have problems with sight, hearing or mental health, and would require plenty of support to ensure they were making well-informed decisions.

Age Concern Norfolk has been campaigning for years for individuals to have greater control over their own care and, as part of the national charity, has been deeply involved in the journey to yesterday's agreement.

The charity is currently working with some of the county's voluntary-service providers, such as pensioners' lunch clubs, to ensure they are in a position to take on the changes.

Eamon McGrath, community development manager, said: "Clearly at Age Concern Norfolk we support a move that puts choice and control into the hands of the people who need it.

"The fact that the power is in the hands of the individual is great and importantly, it gives that person independence and choice and dignity.

"At the moment, people are just tested and told 'this is the service you need'.

"There isn't much choice about the service that comes into the home, and not much dignity. The individual can choose how they want to spend that money, and that can be outside the home, such as swimming to help them stay mobile, rather than having other forms of care," he said.

"It is such a major change and it really requires links to information and support to help people find the best packages and with the right people and at the right price, and we hope that is something that will be addressed by government and local authorities.

"We just hope it will take hold and will not be something that will fall apart in time because of a lack of support.

"If the support is there, I am sure people's lives will benefit as a result, said Mr McGrath."