SOUTH Lakeland is on course to receive £21m from the Government to improve its remaining 3,000 council houses.

The district council's housing service has been praised by Government officials in a mock "Best Value" inspection ahead of a full inspection in January 2005, which will determine whether the cash is released.

The so-called "indicative" inspection similar to a mock exam - was completed recently and the resulting report will outline any improvements the council needs to make before the real inspection next year.

Housing portfolio holder Coun Paul Braithwaite said the early signs were that the inspection went well. Speaking at a full council meeting, he said that feedback from the inspectors had been very positive and the council was on course to hit the target.

He said: "It was very upbeat. It was a good news story. The inspectors found that the service was moving the right way. If we continue in the same direction there's no reason why we shouldn't get the required standard in the inspection proper and release the money, which means decent homes by 2008."

The inspectors did point out some weaknesses but Coun Braithwaite said those areas were all covered by the council's plan to improve the service.

The council needs to achieve a rating of at least two stars to release the cash. If successful the money will be used to improve the council's housing stock with a view to achieving the Government's new Decency Standard, which sets out a series of benchmarks for good quality council housing.

In April the council successfully launched a new "arms length management organisation" to run the council's housing service and the remaining council homes.