David Cameron has called on councils using auctions to secure places in care homes for elderly residents to rethink the policy, saying they are inappropriate.

He warned authorities that they may be in breach of the new Care Act and said councils were treating vulnerable people “like a financial clearing house,” after KentOnline exclusively exposed the controversial policy.

Kent County Council has said that its system for allocating care home places does not involve an auction process in which care packages were based on the lowest prices.

Mark Lobban, the authority’s director of strategic commissioning, said it used a secure online site in which it posted details of individuals needing care.

Residential homes then made offers indicating what services they could provide and at what price but without knowing what others were proposing.

"Councils have to consider the physical and mental well-being of the patient and not just the cost of the place they should go into" - David Cameron

“They are not bidding against each other. Absolutely not. We do not make the choice because the individual does.The last thing it is is an auction.”

KCC set a guide price and if care organisations all came back with a price that was higher, then the authority would make up the shortfall.

Where there were different offers made, then it would be down to the person to decide whether they wished to pay the difference taking into account what they could afford.

Speaking on a visit to the county (Tuesday), Mr Cameron said those councils who did use auctions could be in breach of the new Care Act.

“This is not appropriate. We have passed the Care Act that says local councils have to consider the physical and mental well-being of the patient and not just the cost of the place they should go into and those things have to be considered by local authorities.”

He added: “Of course it is sensible to get older people who are in hospital and shouldn’t be but need to be cared for in the community out into that community.

"As that is done, the social care providers and local councils have to think about what is right for that individual person, not simply a financial clearing house.”

Asked if he wanted councils to suspend the scheme, he said: “They must make sure they are complying with the new law and the new rights. The procedures they have to follow are clear and they have to follow them.”

Opposition councilors have also criticised the system.

Roger Latchford, UKIP opposition leader, said: "What nobody expected was that Kent would shamelessly interpret the coming changes so as to exert dominance over the care market place in our county.

"Placing price as more important than fairness, or quality of care; even CQC judgements from inspections have been replaced by Kent's own distorted and dissembling system, with secretive marked judgements ignoring all previous track records care homes may have earned over many years".

Last week, it emerged disabled people and those with learning difficulties could be next in line to be auctioned off to residential homes.

KCC insists costs are only part of the process when it comes to allocating a place at a home.

Stories you might have missed

Mum's horror as man stabbed in front of children

Woman 'woke to find footballer on top of her'

Man arrested in connection with river death released

Partner of Kent student facing murder charge