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Adult social care has risen rapidly up the national political agenda.

We are promised a Green Paper, and the Government has commissioned an urgent review of access to care. Central and local government have agreed a concordat which establishes the basic principles of a transformed social care system.

There are, however, major contradictions here. The Government is, rightly, concerned about the increased rationing of services, but did not use the spending review to fundamentally shift resources into social care.

Early intervention is promoted, but, because of chronic under-funding, lower level needs are being unmet. Services are improving, but are restricted to fewer people. Reform has been piecemeal.

A timely parliamentary inquiry has just been launched by the All-Party Parliamentary Local Government Group, supported by the Local Government Information Unit. The inquiry will consider longer-term funding and what the relative responsibilities should be between the individual, the family and the state.

Crucially, it is also considering how the place of older people in society can be improved over the next decade and within the context of rapid demographic change, rising expectations, and an uncertain financial climate.

The inquiry panel, chaired by MP Clive Betts, a former council leader, will examine the issues from the perspective of local government.

Fundamental reform will mean reshaping service delivery and access to increase efficiency in the system, to maximise the use of public funding as a whole, and to ensure genuine engagement by communities and older people themselves.

It will mean making sure there is clarity and consensus over what is funded and by whom. It will need to be explicit about what is cost effective, and what people's entitlements are. It will require an examination of the boundaries between health and social care responsibilities and accountabilities. And there will need to be serious debate between local and central government and key stakeholders about whether there should be a national minimum standard for care.

The issues involved are complex and contentious. Personal budgets and self-directed support are entirely consistent with the Government's public service reform agenda, and are universally welcomed by service-users. But, can personalisation be developed in a system where care is increasingly rationed?

The current system does not fit happily with a new system based around self-assessment and choice. Personalisation will not remove the need for making hard choices about budgets and eligibility. It will be a huge challenge to translate successful pilots into universal coverage.

In asking what the core objectives and key components of providing personalised services for older people are, the inquiry will have to consider what happens to choice for those people who want to use a collective service that is no longer viable, such as a day centre.

If the majority of people from a day centre want trips and services tailored to their needs, then there may not be a viable day centre service left for those who want it. Furthermore, the inquiry will question how new ways of working and providing support can be reconciled with improving the skills of and rewards for staff.

Working across service and agency boundaries is a mantra of reform, but there are still technical, administrative, political and cultural barriers to progress. There has been a notable lack of joined-up thinking across government departments on issues such as social exclusion among older people and ill health. It looks as though the Government is beginning to get the message at last. The recent housing strategy for an ageing population had commitments across services and departments. The inquiry will investigate where we are now and what key elements need to be in place for effective progress to be made.

There is no argument about the need to put resources into prevention – the issue is why this is not significantly happening. The Government's assumption that moving from acute services to prevention at no extra cost is surely debatable?

Local government needs to be making a more robust case for change, but the longer-term efficiency benefits of investment in preventative services have to be evaluated and measured – we need a new model which looks beyond the obvious care services. The future role of local authorities in a reformed system is bound to be a key area for many of the inquiry witnesses, highlighting how authorities can take the lead in co-ordinating services across the public sector and in enabling people to stay independent.

The inquiry is a major opportunity to demonstrate how critical local government is to transforming social care. Councils have a clear co-ordinating role, as well as providing direct advice and information for the whole population, including older people who do not receive funding.

An increasingly-personalised system will fail thousands of people unless there is effective advocacy, brokerage and advice. The vast contribution made to communities by older people and carers will need to be  recognised, measured and rewarded – and it is councils which can make this happen.

Local authorities face serious challenges in responding positively to an ageing population. Many have been impressive in developing whole population policies that encourage independence and participation. There has been innovative reshaping of services.

Social care departments are working closely with other council services. And there is slow but growing partnerships between PCTs and councils. It is clear, though, that it is the system itself which is dysfunctional and needs radical change if it is to become efficient, consistent and focused around the individual.

There are huge expectations of the Green Paper, Reconciling the tensions that exist, however, is going to be a very hard task. Local government needs to be in the front of the forthcoming debate.

Janet Sillett is a policy analyst at the LGiU's centre for service transformation. The inquiry was launched on 3 March and invites written submissions by 29 April 2008, to appg@lgiu.org.uk. For further information, contact: Amelia Cookson, amelia.cookson@ lgiu.org.uk. Tel 020 7554 2838