SURREY is to receive £2.5 million of government money designed to end widespread bed-blocking by 2004.

The allocation, designed to free up 1,000 beds nationwide by helping patients move out of hospital and into residential care, is the second largest in the country - a reflection of the extent of the problem here.

It is part of a two-year £300 million national scheme which will see Surrey County Council getting a similar amount next year.

The money, awarded to 50 local councils, will mean the county council entering longer-term agreements with residential care homes.

Nationally it will mean 2,000 older people being able to leave hospital earlier.

Although the council has welcomed the grant, it says the Surrey NHS needs higher annual grants from the government.

"This extra money is very welcome and will help to ease the waiting experienced by many older people in Surrey," said David Munro, executive member for adults and community are, and Farnham South councillor.

"However, I am concerned that it will not be enough to meet the needs of all those in this position.

"Demand for our services is outpacing the grant we receive from the government."

West Surrey Health Authority's chief executive Maggie Maclsaac said: "This is the best single piece of news I've had since joining west Surrey.

"We will be working closely with Surrey Social Services on how the best use can be made of these additional funds."

The £300 million national investment is linked to a radical reform of the way the NHS and social services work together, underpinned by a new agreement - Building Capacity and Partnership in Care, drawn up with private and voluntary care homes, health and housing organisations.

The scheme is designed to speed up patient discharges and thus admissions.

Bed-blocking has become an increasing problem in west Surrey.

Many privately run nursing homes have closed because they could not afford to carry out government-dictated improvements such as minimum room sizes.

Knock-on effects of bed-blocking include delayed admission to a bed, which in turn, creates crowded accident and emergency departments with patients awaiting admission laid on trolleys.

Health secretary Alan Milburn said: "Bed-blocking is a major problem for all NHS patients.

"Bed-blocking leaves people in beds who should be cared for elsewhere and keeps people from beds who need treatment straight away.

"We are determined to tackle this problem which has bedevilled the health service for decades."