The new company – called Ring Stones – is a subsidiary of Calico Homes and will carry out repair and house building work for Calico and other clients.

The joint venture is aiming to secure up to £88m in revenue over its 10 year lifetime, including investment programme work for Calico’s properties and house building totalling more than £45 million.

Calico’s existing DLO programme for responsive and void works will be unaffected.

The new company will deliver lower cost investment and house building work and also assist Calico’s growth by trading commercially in the open market.

Ring Stones will directly employ the labour force with a recruitment campaign for 30 new staff now underway.

Michael Birkett, Calico’s chief executive, said: “Ring Stones will increase our efficiency through significant VAT savings and direct control of labour and supply chain costs.

“Additionally, we anticipate that a more competitive cost base and a potential use of commercial profits will ensure that we are able to continue to develop new housing supply, particularly post- 2015 when the availability of grant subsidy may be squeezed again.”

Lee McCarren, chief executive of Forrest, added: “Our joint venture provides Calico with the means to access additional funding to improve the homes of thousands of its tenants.

“Ring Stones will be based in the heart of Calico’s communities and employing people from within those communities, helping to ensure that its investment supports local supply chains and employment.

“From an operational perspective, Calico’s on-the-ground understanding of the issues which affect its tenants will be invaluable to  Ring Stone’s teams as they work in across Pennine Lancashire over the next decade.”