Cabinet members agreed the money could come from council reserves but leader Coun Gary Porter insisted that any costs to set it would be re-charged to the company once it is up and running.

The council decided to form its own community interest housing company earlier this year to build and provide more affordable homes in South Holland

It will bid for Government funds, which the council is unable to get, and it will not have to hand over a large percentage of rents to the Government, as happens with council homes. Instead it will be able to keep rent to invest in more properties in South Holland.

Company directors will include two Independent members – Couns Michael Booth and Doug Best – a representative from the Tenants' Group, two district council officers and four Conservative members.

The cabinet also approved £50,000 for a review of the council's customer services, which would be an "invest to save" project, and £10,000 for more staffing resources in the benefits department to deal with a rise in cases and backlog while permanent staff are recruited.