Senior sources with knowledge of the department told LGC the new government has asked for proposals to be drawn up alongside work on a social care white paper which will set out a long-term solution to the funding gap.

LGC understands proposals being worked up for possible inclusion in the white paper include looking again at a cap on care costs and providing free personal care. However, a voluntary insurance scheme, as previously proposed by health secretary Matt Hancock, is said to have been dropped.

One source said Mr Hancock had championed this approach under the previous Theresa May administration as he did not think he would get the support for anything other than a voluntary scheme to address the funding crisis in social care.

The Commons health and social care committee last year concluded the social care funding gap in 2019-20 was between £2.2bn and £2.5bn. However, the draft of the social care green paper, promised but never delivered by the May government, is said to have ducked the issue of funding sustainability and focused heavily on workforce, technology and the role of housing.

In June this year eleven of the 12 independent experts appointed by the May government to advise it on the social care green paper wrote to the Daily Telegraph expressing their “despair” at the failure of successive governments to tackle the issue.

The source said: “[DHSC officials] are really trying to make sure that across into Number 10 and into the Treasury there is an understanding of the suite of problems so it’s not just [preventing] older people from having to sell their homes,” they said.

“There’s quite a degree of optimism in the department that actually [the new government] mean it about tackling this and they’re actively working proposals up for ministers.”

However, both sources LGC spoke to noted the current political instability, with a general election widely expected before the end of the year, meant it was far from certain the white paper would see the light of day. However, it is thought proposals could form part of a general election manifesto.

The DHSC declined to respond to LGC’s questions about the government’s plans. However, since becoming prime minister two weeks ago Boris Johnson has repeatedly named social care as one of his government’s priorities. Announcing £1.8bn of funding for the NHS at the weekend he pledged to “face up to” the challenge of social care “once and for all”.

“We are also starting work now on new plans to tackle the injustice of social care. It is not right that some families should be forced to sell their homes to pay for the exorbitant costs of care,” Mr Johnson said.

Care costs were set to be capped at £72,000 under proposals set out in the Care Act 2014 but shelved by David Cameron’s 2015 government.  This would make it relatively straight forward to implement, however research has suggested this would only benefit the 12% of people who stay in a care home for six years or more.

A proposal for free personal care, as opposed to accommodation costs, was put forward earlier this year by the Institute for Public Policy Research which estimated it would cost an extra £19bn a year, equivalent to a 1% increase in total government expenditure. Meanwhile, in May a report the right wing think tank Policy Exchange, backed by leader of the Commons Jacob Rees-Mogg, called for “complex long-term social care” to be funded through taxation and means testing for other social care to be replaced by a co-payment system for those with incomes over £27,000.

David Pearson, former Nottinghamshire CC director of adult social care and one of the expert advisors on the green paper, told LGC the public need to have greater confidence in the quality of care.

“I think it’s urgent that the current funding shortfalls are addressed and that we move rapidly towards proposals that the public can discuss which deal with the longer term sustainability, including greater levels of pooling the risk so that peoples’ personal care costs are met. “

Julie Ogley, president of the Association of Directors of Adult Social Care, said: “I’m really pleased that the prime minster has highlighted the issue of social care and I’m looking forward to taking part in dialogue in terms of how proposals develop.”