A COMPANY in charge of running council housing stock has come under fire from a Government watchdog.

The Audit Commission said the housing management and maintenance service provided by Tristar Homes, on behalf of Stockton Borough Council, was rated fair and showed little prospects of improving.

In an independent report released yesterday, the commission gave the arms-length service just one star out of a possible three.

Tristar was set up three years ago to manage the council's 12,000 properties. In the last two years, it has spent almost £60m of Government money on physical improvements to the housing stock.

The latest inspection considered how services have developed during this intervening period.

Julie Slatter, the Audit Commission's lead housing inspector for the North-East, said: "Tristar's lack of progress over the past two years is disappointing, and there are lessons to be learned from its approach by other ALMOs (arms-length management organisation) in later rounds.

"The organisation has focused on delivering decent homes at the expense of other services and it has failed to keep up with rising standards in the sector."

The Audit Commission report said Tristar had failed to show value for money in most areas and had little success in involving residents.

However, it said there was a slightly improved performance on rent arrears and the management of empty homes.

The Government body has asked the housing management firm to carry out a review and to show by the end of the summer how it plans to improve. The Audit Commission will carry out a re-inspection in a year.

Tristar's board is made up of six councillors, six tenants and six independent members.

The not-for-profit organisation has been carrying out a multi-million pound renovation of old council stock in Stockton and recently celebrated modernising its 6,000th home in the borough.

Stockton council and Tristar declined to respond to any of the criticisms in the report and would only comment on the success of the housing modernisation programme.

Julie Allport, Stockton council's head of housing, said on behalf of Stockton Council and Tristar Homes Ltd: "We are pleased the inspectors have recognised the huge amount of successful work that Tristar Ltd has done on behalf of Stockton Council and tenants to deliver our 'decent homes' packages of new kitchens, bathrooms and other works."