The cost of providing the Scottish Government's popular free personal care policy has risen by 15% in a year.

Official figures published yesterday show the cost of delivering the policy rose from £280m to £321m in 2006-07.

The rise was partly explained by people choosing to have care in their homes instead of going into residential care, while some councils also finally ended their practice of charging for meal preparation last year.

The sharpest increase was in free personal care payments for those staying in their own homes. Last year, the cost of such care rose from £185m to £224m, an increase of 21%. By contrast, the cost of providing care in residential homes rose in line with inflation.

The rising costs also show rising uptake. In 2003-04, 57% of Scottish councils' home care clients received the £145 weekly payments and by 2006-07, that proportion had risen to 72%.

The increase in the total bill supports concern, much of it voiced at Westminster, that Scotland's cross-party commitment to providing free personal care is an open-ended and unsustainable commitment while the number of older people is growing fast.

However, it is a price many say is worth paying. Lindsay Scott, spokesman for Help The Aged Scotland, said: "I don't think there can be any concern about how we afford it. We have to afford it.

"It has to be a priority because we have an ageing population. It's a no-brainer. It costs a minimal amount of the budget, even if costs triple or quadruple that won't be a huge inconvenience. It's not going to cripple us financially."

The demographic challenge was underlined yesterday by new figures showing the UK population is projected to pass Germany's and to become the biggest in Europe by 2060. This would see it rise by 25% to 76.6 million people, while the Irish population faces a 53% increase. Across Europe, there will be two working age people for every pensioner, and the European Commission warned of the need across the continent to make pensions and healthcare spending sustainable.

The first major review of the free personal care policy earlier this year, by its architect Lord Sutherland, predicted the total bill was likely to top £813m a year by 2031. Scottish ministers announced they would find an extra £40m a year to stabilise the policy, but the Scottish Government believes any shortfall could be made up by Westminster restoring £30m in attendance allowance benefit.

A Scottish Government spokeswoman said: "We are working in partnership with Cosla to take forward the recommendations in Lord Sutherland's report and our wider shared commitment to improve the delivery of care services for older people."

The most recent figures show that about 42,400 people received free personal care at home in 2007-08, up 28% on the figure four years ago.

In care homes, the number of self-funding residents who receive free personal care has gone up from 8340 in 2003/04 to 9600 in 2007/08 - a 15% rise. Of these, 6160 also receive free nursing care, with payments of £65 per week.

In all, councils spent more than £1bn on older people's services in 2006/07, compared with £853m in 2003/04 - an increase of 20%.

In 2003-04, around a quarter of the overall spending was on free personal and nursing care, but this rose to 31% in 2006-07.