HUNDREDS of council houses are to be built in a multi-million pound plan to plug the gap in social housing in Basildon.

Basildon Council is pressing ahead with setting up its own housing development company to build on council-owned derelict land in the borough.

Senior council officials have said the company will cost at least £2.5million to set up and will deliver hundreds of new homes.

It is part of a £5million package of improvements for Basildon housing.

Phil Turner, the deputy leader of the Tory administration, said: “The profit from this will go towards the community, will go to taxpayers and will go towards addressing social issues.”

About 5,000 residents are on the council’s waiting list for social housing.

Mr Turner said the main focus would be on helping those people first.

However, the authority will also look to build shared accommodation and homes to sell, to generate profit from the scheme.

The Tory authority’s cabinet will next week rubber-stamp investing £200,000 into the company, before adding at least £2.5million later on when there is a proper business plan.

The money will come from £12.2million Mr Turner is proposing to transfer from Basildon Council’s reserves into the authority’s housing budget, to be invested in phases over the coming years.

This would be the first time it has done that in years.

More council money could also be pushed into the scheme at a later date to deliver homes, with profits from the project also set to be put back into the fund.

Cash will also be invested in the council’s existing stock, estate clean-ups, and anti-fraud measures.

Mr Turner said the council will target land it owns and even knock down derelict garages and small buildings to make way for the houses, which will be small scale at first.

He added the council may even look to buy pockets of land to develop, if the company is a success.

He added: “There’s a risk with everything, but this is both measured and managed.

“This isn’t political gratification.

“This is about hard and fast economics – putting in £1 and getting £1.50 back.”

The authority would normally sell off land and then the housebuilders will keep all profits.

While the authority will have to use builders to actually construct the homes, the council will keep a large proportion of the profits and have control over the building.

A fuller company brief is expected to be unveiled in the summer.