UP to 200 new council houses could be built in the district as part of a new Government scheme to give more local control over rents.

Stroud District Council has formally expressed an interest in a scheme to buy itself out of Government control when it comes to its council houses.

This would not only save money each year but also allow the authority to borrow extra money to build new desperately needed council homes.

Debbie Young, SDC cabinet member for housing, said: "If the conditions are right this could be a great opportunity. As well as helping improve the quality of our tenants’ homes, it could even see the council build more social housing."

Under the current system, SDC sends £6.7 million out of the £17.5 million it collects from tenants each year to central government, which redistributes the money to areas of deprivation.

This figure is likely to rise to £9 million in 10 years time.

Under the Government’s proposed new ‘self-financing system’, councils would be able to buy themselves out of the old scheme allowing them to keep all the money from rent.

Stroud would need to borrow between £85 million and £95 million but this compares favourably to the probable costs of £356 million the authority would have to pay under the existing system over the next 30 years.

This borrowing could also include a provision for £11 million to spend on building up to 200 new council homes.

Council leader Frances Roden, who has been working with the Local Government Association to lobby for this change since 2008, said: "It all looks quite promising but there are still questions that need to be answered after the current consultation period comes to a close.

"We are looking forward to hearing more from the Government so that we can determine exactly how a new system will affect us but if all goes well it will indeed mean more money for affordable housing in our district."

At this stage the council has only expressed its views on the proposals but if it did go ahead the changes could be made as early as 2011/12.