The system for funding beds in Oxfordshire's homes for the elderly is a "scandal and a disgrace", according to the owner of a private sector home.

John Butterfield, who owns 29-bed Sotwell Hill House, in Brightwell-cum-Sotwell, near Wallingford, says social services' funding policy is unfair and "against human rights".

He has criticised a policy which allows social services to pay £367.50 per week to place an elderly person at one of its own homes, but only £256 per week for a private sector home.

He says private sector homes cannot afford to offer beds at such low prices. And social services managers concede they are concerned about the funding system.

Mr Butterfield, whose average room for "band 1" residents - those not needing special nursing care - is £412 per week, said the system was unfair and illogical.

He said: "An elderly lady was unable to join her friend here at Sotwell Hill House because of the policy.

"She had less than £18,000 in savings, and was therefore eligible for state aid, but social services would have paid me only £256 per week to take her, which I cannot possibly accept.

"As a result, she won't be spending her last days with her friend, and has ended up in one of the council's homes. My cheapest room is £370 per week, so for a just few pounds more from social services she could have come to the home of her choice."

He added that he was supposed to evict people when they had used up their savings and could no longer afford to stay at his home, but said he had never done this.

Nick Welch, the assistant director of social services, said: "It's true that we pay a level which doesn't give the independent sector homes any real return, or certainly not what they would want or expect."

But he added Oxfordshire social services paid higher rates than other local authorities and that fees would be reviewed next year.