A COUNCIL'S housing stock could be transferred to an independent management company by next year.

In February, Easington District Council agreed its preferred option for the future of its housing services was through an arm's length management company.

The decision was taken after a survey showed the authority's housing stock and its environment would need a £586m investment over 30 years to reach the Government's required standard.

After recognising that the demand for its housing was falling, the council started a stock reduction programme, and is on target to reduce the current level of 11,300 to 10,000 homes by 2005/6.

Now it has submitted a bid to Deputy Prime Minister John Prescott's office to establish an arm's length company.

It will learn if this has been successful next month and a full tenant ballot on the proposal is scheduled for September and October.

The company is due to be fully established by April 1 next year, with an improvement programme due to start in January 2005.

If the bid fails, the council will resubmit it.

Moves to transfer the housing stock came after the authority's repairs and maintenance service was awarded no stars by the Housing Inspectorate.

A short-term action plan was drafted and when it is re-inspected, in February 2004, it is hoped the service will achieve two stars.

Alan Caygill, the council's director of housing and public services, said the arm's length company would deliver all landlord functions, including housing management, repairs and maintenance, investment programmes and warden services, as well as taking homelessness decisions.

He said: "The arm's length management organisation (Almo) and the additional investment the achievement of two stars and ultimately three stars would bring, would result in major regeneration within the area.

"The council, through the Almo and in partnership with companies helping deliver the capital investment, would seek to maximise local training and job opportunities to local residents, in what is one of the most deprived districts in the country.

"The bid also includes the five per cent maximum allowed to address environmental issues."