COUNCIL houses could be built for the first time in Colchester for more than 30 years.

The administration running Colchester Council wants to build homes to try ti cut the borough’s near 5,000-long waiting list.

Town Hall bosses believe they have found a way which will give them up to £190million to spend on increasing and upgrading the housing stock maintained by Colchester Borough Homes.

But the complex changes planned for the national Housing Revenue Account will see the authority taking on an estimated extra £60million in debt.

Tim Young, councillor responsible for housing, insisted the prospect of hundreds more affordable homes for Colchester outweighed any concerns about the extra debt.

He said: “It is an ambition of the administration to get on and build council houses again in Colchester, so we hope the Government will help us with that ambition.

“If you look at the long term, this is a no-brainer.”

Over decades, the majority of authorities have built up huge debts from building council homes and, more recently, funding the Decent Homes improvements programme.

Colchester has a relatively low debt – £51million – and as a result it has to help authorities with debts of almost £1billion to pay their interest.

Last year, it paid the Government £2.5million, some of which went to other authorities, and some of it into the Government’s coffers in what became known as a “tenant tax”.

This figure is due to increase rapidly so in the next 30 years Colchester is expected to pay £300million to the Government.

But there is cross-party support for a change to this dated system. Put simply, councils will agree to collectively pay off all of their debts in return for scrapping the payments to the Government.

This means that over the next 30 years, Colchester will have to pay off its £51million debt, plus an estimated further £59million of other authorities’ debt.

In return, it will get to spend the remainder of the £300million it would have paid on improving the borough’s housing stock.

This could be improving existing homes, building new ones or even buying some of the thousands of empty homes dotted across Colchester if there are favourable prices.

Darren Brown, group accountant at the council, compared the deal to buying a house rather than renting. He said: “If you took out a mortgage, you go into debt, but you know over the next 25 years your mortgage will stay the same.

“But if you rent, your rent will go up every year. So in 25 years’ time your rent will be higher than the mortgage, which would have been paid off.

“In this current climate, taking on more debt probably does not seem like a good thing, but long term, it’s a really good idea.”

He stressed the debt would be ring-fenced and funded by tenants’ rents, not any future council tax rises.

Mr Young added: “If the system stayed the same, it would be far worse for Colchester tenants and residents.”

He remained tight-lipped on where the homes could be built, stating they would probably be on sites owned by the council or other public bodies.

He said: “We would like to start building again as soon as possible and the financial year 2012/13 would be the earliest we could seriously look to build council housing in Colchester.

“We have already identified a number of garage sites across Colchester but there is lots of public sector land that would avail itself to social housing.”

This autumn the coalition Government is to decide whether to go ahead with the Housing Revenue Account changes during its spending review. Colchester Council’s response in favour of the overhaul will be discussed at a cabinet meeting later this month.