CASH-strapped South Tyneside Council is at the centre of a furious row after offering £93,000 a year for a new housing chief.

The huge salary will be paid to the chief executive of the body being set up to manage the borough's council housing from next year.

A director of res-ources and a director of operations are also being sought for the arm's-length management organisation (Almo). Both posts offer 72,000 salaries.

The wages – which, when added to other benefits mean the posts will cost taxpayers about 250,000 a year – have been labelled outrageous by John Berry, a former chairman of the borough's residents' forum.

He resigned from the post in protest at the undemocratic way he claimed the Almo consultation was handled, saying it should not have proceeded without a proper ballot of tenants.

Mr Berry said the appointments look particularly bad at a time when the council is still trying to claw back a 4.9m

deficit in its budget by making cutbacks across all departments.

"These are outrageous salaries. I don't agree with the principle of the thing, so I can't see these posts being justified.

"What is the money being paid for them to do? It's to administer a flawed policy.

"My concern is that some point down the line we are going to find that this new approach is not working."

The Almo, a limited company owned by the council, will take over the running of the council's housing stock next April.

But a spokesman for the council defended the Almo posts, saying the salaries are necessary to attract "excellent people in a competitive market".

"The Almo will be a new organisation and a new company independent of the council.

"The Government has given us approval to set up this company in order to secure the extra money we need to bring homes in the borough up to the Government's decent homes standard.

"The company will have significant expectations and challenges, including ensuring that South Tyneside's Almo achieves a two-star inspection rating and attracts 235m to improve homes across the borough.

"Housing arms length management organisations have been set up across the country with top posts at equivalent and higher salaries, and we will be seeking excellent people in a very competitive market.

"This is planned expenditure in our housing revenue account, which is a separate, ring-fenced budget for housing.

"We know that improving the homes and surrounding environment is one of the top priorities for our residents.

"The Almo is how we plan to achieve this, and we cannot do this without the excellent management of around 19,000 homes and 700 staff."