This is how £10bn social care overhaul could be funded, ahead of Prime Minister's announcement

The Prime Minister is due to set out plans to raise around £10 billion, which will be spent on the NHS as it recovers from the Covid-19 pandemic as well as to help people avoid crippling adult social care costs.

The funding is thought to be equivalent to a tax hike of around 1.25 per cent but Mr Johnson faces a potential Tory backlash if he increases National Insurance contributions to pay for the reforms.

The Prime Minister has already briefed his cabinet about the plans, with many around the table reportedly concerned about breaking a general election promise not to raise National Insurance.

Downing Street hopes to present the package as an attempt to help the NHS clear backlogs, as well as resolve long-standing issues around care costs.

No 10 said a lack of integration between the two often sees people ‘stuck in the wrong care setting, and families worry about meeting the costs of care if they leave NHS provision’.

And Downing Street described as ‘unfair and often catastrophic’ the situation where someone who has dementia may have to pay for their care in full, while someone cared for by the NHS would receive care for free.

It said one in seven people now pays more than £100,000 for their care, and said the system can lead to ‘spiralling costs and the complete liquidation of someone’s assets’.

Under current arrangements, anyone with assets over £23,350 pays for their care in full, but No 10 said the costs were “catastrophic and often unpredictable”.

Ahead of his Commons statement, Mr Johnson said: “We must act now to ensure the health and care system has the long-term funding it needs to continue fighting Covid and start tackling the backlogs, and end the injustice of catastrophic costs for social care.

“My Government will not duck the tough decisions needed to get NHS patients the treatment they need and to fix our broken social care system.”

Reports have suggested that lifetime contributions on care will be capped at about £80,000, and National Insurance will be increased by 1.25 per cent to raise between £10 billion and £11 billion per year.

Ahead of the announcement, No 10 remained tight-lipped on the detail, but it has been reported that the proposals will be called a health and social care levy.

Shadow health secretary Jonathan Ashworth said: “A long-term plan on social care and a rescue plan to address the crisis the NHS has been in for years are both long overdue.

“The Prime Minister must set out how he will bring down waiting lists quickly, support the NHS workforce, fix crumbling hospitals and deliver modern equipment to speed up diagnosis of deadly diseases and crucially, ensure more people can access the social care they need.”

Liberal Democrat leader Sir Ed Davey said: “Boris Johnson gave voters a cast iron guarantee that he would not raise National Insurance – and now he’s breaking voters’ trust again.

“Even worse, the Government’s plans won’t fix the social care crisis. Our loved ones will still not get the quality care they need.”