Ministers yesterday promised to link elderly care payments to inflation from next spring, while setting up a nine-month review of the flagship policy by the man credited with designing it.

They also set out on a collision course with Whitehall, making a claim for £30m in annual welfare payments that have not been paid to older Scots for the past five years.

Lord Sutherland of Houndwood, former principal of Edinburgh University, has agreed to review the workings of free long-term care for the elderly. His assessment of the level and distribution of resources to the local authorities that implement the policy could recommend that the payments should be uprated by the five years of inflation since the levels were last set, at the time the policy was introduced.

He can also use the review to further his campaign for the Westminster government to adopt similar findings from his 1999 report into elderly care. With a committee that is yet to be appointed, he is expected to report by next March, with an interim report this September. Opposition MSPs questioned the need to set up an inquiry, when there have been three recent reports into free personal care.

The inflation-linking promise given yesterday is reckoned by the executive to mean an additional bill of £11m on top of more than £200m currently spent on helping people aged over 65 with nursing and personal requirements. More than 50,000 older people currently benefit from the policy. Around 42,000 of them receive financial support while living at home. Roughly 9000 are in care homes receiving £145 weekly towards the cost of personal care services, of whom just under 6000 also get a further £65 for nursing care.

Scottish Health Secretary Nicola Sturgeon countered those who said the policy was unaffordable and would collapse. "Under this Scottish government the policy will be secured for many years to come," she said. Praising previous ministers who set up the policy she said it puts Scotland "in the vanguard of social care development. We must build upon the strong foundations that exist, and raise the bar in terms of delivery".

Some of the new money required for higher payments and growing demand could come from a challenge to Westminster, to claim back around £30m of welfare payments.

That would be paid in Attendance Allowance by Whitehall's Department of Work and Pensions (DWP) but Scots are no longer eligible for it because of the executive's more generous provision.

Ms Sturgeon yesterday avoided the language of confrontation in trying to win a battle which Labour ministers lost when they made the same claim in 2001.

She said the refusal to shift the money into Scotland's block grant was "a longstanding imbalance between Scotland and the UK's finances".