THE biggest scheme ever undertaken by Redcar and Cleveland Borough Council is going to affect more than 15,000 council house tenants.

The council is proposing to transfer the ownership and management of its 12,000 council houses to a non-profit-making independent housing organisation.

The proposal has come about because the council is subject to strict government rules about how much it can borrow and spend - and these amounts are declining all the time.

The new company is not subject to the same restrictions and could borrow money to make much-needed improvements and keep rents affordable for tenants.

But the council says the scheme will get the go ahead only if the tenants agree, and yesterday it launched a consultation exercise with residents.

The council says it wants to give the tenants the facts because it is concerned about the wrong messages being sent out - particularly to vulnerable and elderly people who may be afraid they are going to lose their homes.

The council hopes to encourage tenants to exercise their vote next spring when they will decide whether or not to go ahead with the scheme.

The organisation would be independent of the council and would have an unpaid, voluntary management board of five tenant representatives, five councillors and five independent experts.

The company would also be regulated by the Housing Corporation, the Government watchdog.

Iain Sim, the council's director of housing and direct services, said there were many benefits to tenants, including low rents, a comprehensive programme of repairs and modernisation and protection of tenants rights.

Tenants will take part in a three-week ballot, and if they agree to the proposals, the company could have control of the houses by December next year.

Mr Sim said: "To bring the housing stock to a reasonable standard, the council simply doesn't have that kind of money the new company would be able to spend. We want to make sure the tenants have all the facts before they vote.

"The response so far has been very positive and they are very supportive for what we are trying to do."