The Highland Council is urging the UK Government to stimulate the housing and construction industry in the Highlands during the economic downturn by releasing much-needed funds.

The Council, which has a stock of 14,000 houses, is currently spending £15m each year on loan charges to service its £146m housing debt. The debt is the equivalent of £10,264 per house and the loan charges are equivalent to 37p for every £1 of rent collected.

It believes that if the Government at Westminster eased this burden, the Council could not only accelerate its programme of council house improvements to meet national standards but resume council house building. This would create significant employment and help the construction industry at a time of recession.

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Councillor Margaret Davidson, Chair of the Housing and Social Work Committee, made the case at a meeting in London with Ian Pearson, Economic Secretary to the Treasury. The meeting was set up by Danny Alexander, MP for Inverness Nairn and Badenoch and Strathspey.

Councillor Davidson said: "The economic downturn is having a serious impact in the Highlands and the Council has been working hard with our partners to mitigate the effects of this downturn. Some of the measures we would like to undertake involve supporting the construction industry through modernising existing council housing and the building of council houses.

"I welcome the chance to put our case directly to the Government and hope that our recent track record in providing affordable housing will convince the Minister that we can hit the ground running if we were given extra investment."

She described the meeting as very positive with the door kept open for further dialogue. The Council is eager to explore whether the Government would be willing to consider a more flexible approach to interpreting its fiscal rules in relation to housing debt.

She added: "If the Council did not have to pay current loan charges of £15m per year this could be reinvested in housing capital contracts – either for refurbishment of existing houses or new build."

(GK/JM)