COUNCIL chiefs in the Ribble Valley are demanding the Government reviews its decision not to let them use private cash to build 200 new affordable homes.

Ribble Valley Council announced its stance after the Government pulled the plug on plans for a regional assembly referendum in October.

Earlier this year, the Office of Deputy Prime Minister rejected Ribble Valley's submission for Private Finance Initiative Credits to help solve the borough's affordable housing crisis.

Under the PFI, a company would have been brought in to build 200 'affordable' homes, paid for by Government and council cash.

The houses would have either been rented or sold to local people who faced the prospect of moving out of the area because they could not afford property prices.

But the bid was kicked out - and one of the reasons given was that the council's future was 'uncertain' because of the pending regional assembly referendum, which could have triggered a shake-up of local government in Lancashire.

Clitheroe councillor Ian Brown said: "Given that the Government has now cancelled the regional assembly referendum, it would appear we are safe or a good while now.

"The Deputy Prime Minister should review his decision about our PFI as a result. They say they accept we have a real problem here, but that we have no experience of dealing with PFI. If they don't give us the chance, how will ever get experience?"

Fellow Clitheroe councillor Margaret Sutcliffe said: "If we don't keep going at them, then we'll never get anywhere. The ground has shifted now."

In a response to queries about the PFI decision, the Office of the Deputy Prime Minister wrote to say it would be happy to consider them for a future round of PFI bidding.

Council chief executive David Morris said: "We don't know for certain if there will be a future round of PFI funding, but there may well be, and we'll be ready for that."

A spokesman for the ODPM said the matter of the council's future was considered as 'part of the strategic context' but was 'not a factor in the selection process'.

But a puzzled Mr Morris said: "I have no idea what that means."

Ribble Valley's 'affordable housing crisis' stems from rocketing house prices, triggered by people buying holiday homes or moving into the area, forcing local people out of the market.

The council has now banned development of anything other 'affordable homes'.