A major overhaul of children's care in Oxfordshire is planned, to slash the spiralling cost of looking after vulnerable youngsters.

A wide-ranging review is seeking big reductions in the county's dependence on costly private homes and agencies charging an average of £3,000-a-week per child - seven times the cost of sending a child to Eton.

And with Oxfordshire social services having overspent its children's budget by £2m, a new drive will be launched to recruit 60 more foster carers.

As well as cutting back on children being sent outside the county, a shake-up of children's homes in Oxfordshire is proposed.

Two of the county council's three homes would go.

Holme Leigh, a home for girls in Summertown, Oxford, would close next year. Thornbury House, the boys home in Kidlington, would shut its doors in 2007, to be replaced by a new home on a still unspecified site.

The new strategy aims to substantially cut the length of time Oxfordshire children spend in care, a figure that has continued to rise in recent years. It is proposed that children under 12 should no longer be sent to residential homes at all, with greater effort made to involve relatives in providing care.

John Richards, Oxfordshire County Council's new interim head of children's services, was asked to review provision for children in care to reduce the overspend.

The county currently has to find a staggering £7.23m a year to support the 77 children who are sent to independent foster carers or residential homes.

But Mr Richards pledged that his proposals aimed to bring improvements in the way the county's most vulnerable children were looked after.

Last year the council's adult and children's social care departments received just one star in its annual assessment. The percentage of in-care children achieving the benchmark assessment figure of five GCSEs fell to 1.8 per cent, compared to a county average of 50.8 per cent.

Daniel Ruaux, acting deputy manager at Thornbury House, said: "It's a dramatic initiative and I believe a good step forward. I don't think it's about taking away, but rather reinvesting the resources and skills that we have.

"Savings made should go back into the child care we offer. I think young people in our care will benefit from this."