A CONSTRUCTION firm has secured the lions share of £61m in contracts to build affordable homes for North-East housing providers.

It comes after the County Durham based Esh Group worked in partnership with the public sector housing providers to secure a £10.4m Government grant from the Homes & Communities Agency towards the project.

It will see the Esh Group, based in Bowburn, Durham City and employing 1,000, build the majority of the 541 new homes over the next three years, securing jobs in its construction division.

The construction industry has been probably the hardest hit sector in the economic downturn and the Esh Group has not been immune.

Its chief executive Brian Manning said: "It is very important to secure contracts like these. We are finding things tough, along with everybody else, the market is very difficult at the moment.

"This contract is really good because it gives us three years of work to look forward to."

The announcement comes just days after another partnership involving the Esh group, homeless charity The Cyrenians and Durham County Council secured a £1.8m grant from the HCA for rebuilding work at a facility, which will provide accommodation for 45 homeless people..

Mr Manning said it was increasingly important for the private, public and voluntary sectors to work together to secure funding for projects which benefited them all.

He said: "I think the key is that the private, public and voluntary sectors have to be seen to be working very closely together and producing a strong case for Government to support them.

"The situation within the construction industry isn't very good but there is no point complaining, you have to work with the tools you have got.

"Working in partnership, with a strong business case, gives you a better chance.

"It is a nice pre-Christmas boost for the business."

The £10.4m grant awarded by the HCA under the Government's Affordable Homes Programme, which aims to increase the supply of new affordable homes in England, was the first of its type to be signed nationally and is one of only two private developer contracts to be ratified to date.

Of the 541 homes 377 will be built in the North-East and 164 in Cumbria.

Work will start on the first sites in January and is planned to be completed by December 2014.

Esh Group, via its specialist subsidiary Dunelm Acorn Homes, led the bid in partnership with Two Castles Housing Association, Livin (Sedgefield Borough Homes), Vela (Housing Hartlepool), Endeavour Housing and DAMHA (Durham Aged Miners Housing Association).

Anne Mulroy, Head of Area at the HCA said: "Supporting a successful local developer will ensure that the homes are delivered quickly for local residents and in a way that guarantees best value to the tax payer."