A COUNCIL is to privatise its housing and construction services.

Sedgefield Borough Council's cabinet has agreed a five-year partnership with social housing repairs and maintenance firm Mears Limited.

Chief executive Brian Allen said the move was one of the biggest decisions the council had faced.

He said: "It affects the jobs and livelihoods of 170 employees and services to 8,500 tenants, so it has to be balanced."

The move, which comes on the back of fresh proposals to transfer management of its housing stock to a stand-alone housing association, has met with opposition.

Mears will take on existing council workers for the contract, which includes repairs and improvements to council houses, new homes built as part of a regeneration master plan and refurbishment of Spennymoor Leisure Centre to create an arts resource centre.

Officers and cabinet members say the deal will offer staff greater job security, after 18 months of talks and more than 20 meetings with union officials over terms.

Unison, Unite, Ucatt and GMB unions have been involved in the consultation and objected to the transfer.

Chairman of the joint shop stewards committee Pat McCourt said: "Our members have chosen employment in the public sector and have clearly, repeatedly opposed this transfer to a private company.

"We feel all the council's aims could have been achieved inhouse.

I'm disappointed that the council have approved this proposal.

"The less direct control a local authority has over its housing the more I believe existing problems will grow.

"If the new unitary authority want a housing role, Sedgefield will have lost its most valuable asset, this workforce."

Mears has promised to honour all existing terms and conditions, match any future local government pay awards and honour existing trade union recognition.

It has pledged to make no compulsory redundancies throughout the duration of the contract, which runs from February next year to January 2013, with an option to extend it for two years.

These are promises the council admits it could not make to its existing workforce as the need to tender for future work would put about 60 jobs at risk.

Cabinet members heard that Mears' bid for the contract offered value for money and better services than presently delivered.

Officers estimate the £85m contract will save the authority about £2.5m and Mears is keen to establish a training centre and develop apprenticeships.