AROUND 1,000 new homes are to be built across the Dudley borough each year for the next three years to generate nearly £1million in extra income for cash-strapped Dudley Council.

Council chiefs say the plan is vital to help with financial recovery within the borough – against a backdrop of an unprecedented reduction in government funding which has fuelled the need to make £20million worth of savings over the next three years.

They say the scheme will generate an extra £900,000 in council tax income each year for the authority which is struggling to balance the books.

Councillor David Sparks, cabinet member for finance, said: “One of the borough’s huge strengths is the fact that it is a desirable and attractive place where people want to live. We have enormous demand for new private housing developments across the borough which provides a boost to the local economy and ultimately increases the authority’s income through council tax.

“We will continue to move forward these new housing developments together with new employment sites which will give jobs to local people and help us to maximise business rate income to help plug the funding gap we are faced with.

“The funding cuts we continue to tackle from national government mean we need to transform the way we deliver our services. We need to be innovative and smart and it could well be that new development sites are generated through changes to how the council runs its services.

“Work to transform and streamline our service delivery is likely to identify a number of sites which will no longer be required for council use, making them potential sites for further private investment.”

Authority bosses say they have suffered the loss of £65million in government funding since 2010 and the figure is forecast to rise to more than £100million over the next three years.

In its forthcoming budget, the council is proposing to make savings of £8million in 2016/17, moving up to £17million by 2017/18 and £20 million by 2018/19.

But the budget report forecasts there will still be a deficit of more than £50m by 2018/19 if additional savings are not found.

The proposals will go before the council’s cabinet on Wednesday October 28.