A DESPERATE need for more affordable homes in west Wiltshire has prompted steps to approach the business world to help with the £20m building costs.

The Government's Private Finance Initiative could be employed in the district to pay for 500 new homes.

A 2001 housing survey identified a need for 194 new affordable homes each year in west Wiltshire up to 2006, with 90 homes a year thereafter, while a report by a government planning inspector, published in June, confirmed more than 1,400 affordable homes would be needed up to 2011.

Housing services manager Graham Hogg told councillors West Wiltshire District Council could provide 100 homes a year at best and the need was growing each year.

Cllr Michael Mounde, housing portfolio holder, said: "We have got to find some way to get a lot more housing into the district. If you haven't got a home, you have nothing.

"We have 2,800 people on the housing waiting list and people who have been in hostels for over two years. This situation is only going to get worse."

The council's cabinet has now agreed to enter the first stages of PFI and will submit an initial bid to the Government for permission to approach a housing partner to build the homes.

If successful the council could ask one or more housing associations to partner it in the scheme.

The organisations would be allowed to borrow money privately to develop, own and manage the homes, giving the council exclusive rights to house people in them for 30 years.

The council would then be charged for the debt and could claim an 85 per cent subsidy from the Government, leading to the potential cost of just £12,000 per house from council coffers.

If the council were to finance the 500 homes itself it would need to borrow around £20m, repaid over 30 years. The annual £1.3m charge would have to be paid from council tax, at a total cost of £40m or £78,000 per house.

The council will discover if it has passed the first hurdle early next year and if successful must pass two more stages.