Bexley Council has agreed to set up a wholly-owned development company to boost council income as they launched their growth strategy to build over 31,000 homes.

The decision to set up a company was agreed alongside the draft growth strategy at a public cabinet meeting on Tuesday night.

In a statement, Bexley Council claimed by 2020, all councils will no longer receive grant funding from the government and will rely totally on the income they generate.

The spokesperson said: It would distribute profits to the Council as dividends, generating income that could be used to meet the cost of local services.

“Raising income in new ways is becoming increasing important to fund the services councils are required to provide by law and to meet local priorities.”

The council say decisions on developments will be made quicker, which is "important in an increasingly competitive environment."

The wholly owned company will primarily be for accommodation with a separate cabinet committee established to provide “strategic oversight.”

Thirty-five per cent of houses built by the company will be affordable, with 25 per cent for private rent.

Other councils in the country, including Portsmouth and Derbyshire, have set up similar companies.

Councillor Don Massey, cabinet member for finance and corporate services said at the meeting this will be an important part of Bexley’s growth plan.

He said: “What we need is a balance. What we are trying to get right is the risks, because there are risks.

“Councils and local authorities are already in the market of taking risks, it is getting that way.”

The cabinet member noted there should be a “strict criteria” before “shelling out money.”

In the report recommending the council-run development company, it says: “The generation of alternative revenue income streams will become increasingly important in order to deliver statutory responsibilities and local priorities.”

Concerns about a council run company were aired by Councillor Philip Read, cabinet member for children's services who said: “We have seen this through history, we have seen the consequences of misplaced optimism.

“However, this company will act as a driver for the growth strategy, the council are obviously familiar with the borough.”

Labour leader Daniel Francis noted at the meeting the group agreed with the principles, and said they proposed a company in their 2014 manifesto.