A council has been accused of failing to control costs after committing to spend £1m building just four council houses.

Local housing association chief Bruce Forbes said the sum committed by Angus Council to building the four homes in Arbroath was "astronomical" and his organisation would expect to build for similar houses for half the cost.

The council said the project would provide homes of "the highest quality".

The project will see a net loss of four council houses, as Angus demolishes eight existing homes on the site. However the new homes it is building are large, and two will have disabled access including one which is being purpose built for a local family with special needs.

Nevertheless, Mr Forbes, director of Angus Housing Association, has now written to the housing minister Kevin Stewart MSP to call for councils to be subject to similar scrutiny and cost appraisal procedures as social landlords.

He said: "Having worked in the housing field for nearly 40 years, it is usually with great pleasure that I read newspaper headlines announcing new homes for rent being built. I know from experience that they are desperately needed.

"When, however, I read that only 4 new homes would be provided at a cost of £1million, I could not believe that the elected members on Angus Council had agreed to proceed with this project without further scrutiny of the costs.

"It is completely unsustainable to build new houses at such hugely inflated capital costs and carrying on with projects like this only ultimately means less homes are built for those in need."

Mr Forbes said he was particularly concerned that the council was spending £125,000 on professional fees alone for the project. "We could build a house for that figure alone. While I know that the houses that Angus Council have built recently are very high quality, these figures do not equate to anything even near the ballpark costs of houses of a similar standard that Housing Associations like ourselves have been building for the last 20 years," he said.

Mr Forbes said Angus HA was about to build 32 new houses in Dundee at an average cost of only £130,000 per unit, while it had been commissioned to build a similar house to the specialised disabled access home which the council is paying £380,000 to build in Arbroath, and had done so for £190,000 he said.

While councils receive an average of about £15,000 less in subsidy than housing associations for each home they build, Mr Forbes said he would like to see them receive equal subsidy in return for better cost controls - arguing that if a council overpays, it pushes up costs in the market to unrealistic levels. "These differences in the cost of building social housing where some houses are costing, on average, double the price must surely need more detailed scrutiny," he said.

At a meeting of Angus Council's communities committee where project was approved, Carnoustie councillor David Cheape also queried the cost. "Let me play devil’s advocate here – with the shortage of housing stock why we are removing eight properties to replace them with four at a cost of £1m?”, he said.

An Angus Council spokesperson said: “Angus Council recently approved the development of four houses which will be the last stage in the phased regeneration of part of Arbroath, transforming it from low demand and low aspiration, to an area of high quality affordable housing where people want to live and prosper. Whilst all of the houses will be accessible and fitted with sprinkler systems, one in particular will be built to a very high level of adaptation to meet the assessed needs of a family.

“The project requires the demolition of old and unpopular housing stock, and follows Angus Council’s strategic rationale of investing in and for our communities. We build places that people are proud to call home and take care to design properties that add to the quality of our built environment.

“Owing to the long term successful management of the council’s Housing Revenue Account and a superb relationship with our tenants, we are in a fortunate position in not having to be in a race to the bottom in terms of cutting construction costs at the expense of quality. However we are going to the market to get the best price we can through competitive tendering.”