A HOUSING department will have to improve if it wants to secure up to £44m in Government funding.

Stockton Borough Council's housing service has been conditionally allocated the extra cash under the Government's Arm's Length Housing Management scheme.

But before it can receive the cash it will have to improve its service, which in a recent Audit Commission report, has been labelled "fair", or one star.

Half of the £44m subsidy will be Stockton's if the service improves to a "good", or two-star level, with the remainder coming its way if it reaches an "excellent", or three-star standard.

The Government cash, if released, will pay for much- needed repairs and improvements to council homes across the borough.

Earlier this year, tenants voted in favour of creating an Arm's Length management organisation, which will run the council's housing stock.

This company, Tristar Homes Limited, became one of the first such organisations to be established in the country when it was created in April this year.

Tristar provides the housing services, gets access to potential investment and strives to involve tenants more in managing their homes. However, householders are still classed as council tenants.

Neil Schneider, corporate director of service at Stockton council, said: "The timescales for establishing the company and carrying out an extensive service review were extremely tight, but Tristar Homes is now up and running and I am confident significant progress is being made which will improve the quality.

"The second Audit Commission inspection takes place in October this year and I believe we are on track to have improved to the two-star rating which will allow us to access the extra funding."

The council says it will have to improve in a number of areas to boost their chances of getting the money. These are likely to include turning round empty properties, collecting rent, the out-of-hours repair service and increasing customer satisfaction.

Stockton is one of only eight local authorities in the country to be chosen to pilot the Arm's Length management programme.