COUNCIL bosses have branded as 'lame' the Government's reasons for refusing them permission to build 200 houses using private cash.

Ribble Valley officers and councillors launched the attack after a bid for Private Finance Initiative Credits to help solve the borough's affordable housing crisis was turned down.

Among the reasons listed for not giving the authority the PFI approval was that there was no guarantee that the authority would survive a shake-up of local government, and that the council had no previous PFI experience.

Under the PFI, a company would have been brought in to build 200 'affordable' homes.

They would have either been rented or sold to local people facing the prospect of moving out of the area because they cannot afford property prices. Money from the council and the Government would be paid back to the private company over a set period, enabling the homes to be built immediately, rather than waiting for public funds to be made available.

Similar schemes are being used to build hospitals, schools and libraries across the country, including the new super £100million super hospital at Queen's Park, Blackburn.

Chief executive of Ribble Valley Council David Morris said: "We find the reasons given to us for not getting the PFI approval lame, to be frank.

"The idea that the shake-up of local authorities which may or may not happen is already affecting our ability to sort out housing is very worrying. If the Government doesn't give us chance to do a PFI scheme, how are we supposed to get the experience? We knew we didn't have the expertise, which is why we brought in consultants who had."

Housing chairman Coun Joyce Holgate said: "I think it is a great shame and the reasons don't really stand up at all.

"We shall just have to make sure we bid strongly in the next round."

Coun Margaret Sutcliffe added: "The reasons given are stupid. A chance to really sort out housing problems has been wasted."

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

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

A spokesman for the Office of the Deputy Prime Minister said: "We have presented Ribble Valley with an appraisal. They had a lot of competition."