TEST Valley Borough Council has decided that it will not stand in the way of the proposed merger of Andover-based Testway Housing and two other former local authority housing associations.

The decision was taken by Cllr Ian Carr, the leader of the council, at his first ever ‘leader’s decision day’ meeting held on Wednesday.

It means that the borough council will vote in favour of the merger at the extra-ordinary meeting of the Testway board next month, which may lead to union with Devizes-based Sarsen Housing and Somerset-based Flourish.

Testway was created in 1999 following a vote of tenants of the borough council who agreed to a process known as large scale voluntary transfer, enabling their council housing department to morph into a stand-alone housing association.

Mr Carr said the authority had had some concerns about the proposal.

“But we have had long and fruitful discussions with Testway about the way forward and why they need to do this,” he said.

“Giving up our vote will not be too serious as it has never been used and we have protected any downside.

“The three together will produce one strong group which can lever £25m from the Government to build more houses.”

Without change Testway said it would be less likely to develop new housing in the borough.

Portfolio holder for housing, Cllr Sandra Hawke, said that residents and tenants of Testway would not see any detrimental result and ‘things will probably improve’.

Under the proposals, which have been subject to consultation with tenants, Aster Group has confirmed that it will continue to support community development work such as Testway 7s and Andover’s Twice and Nice furniture recycling operation.

One issue for the borough council had been its potential pension liability for 63 members of staff who transferred to Testway Housing in 2000.

However, financial checks on the proposed new organisation have revealed that it will have a strong balance sheet with no stronger risk of collapsing, thereby invoking the council’s liability, than was the case for Testway. In fact the new arrangement could boost financial viability by cutting so-called back-office costs.

A spokesman for Aster Group said: “We expect a final decision to be made later this year.

“We know that local services are very important to our customers and we will retain a local presence in Andover, regardless of whether or not the proposed changes happen.”