TWO social housing providers, both with their origins and operating bases in South Worcestershire, are to merge.

Malvern-based Festival Housing and Worcester based Worcester Community Housing have agreed, in principle, to come together to create a regional housing group with a combined turnover of £75 million and a housing stock of 14,000 properties.

As well as building financial strength and capacity, the move will generate more than £30m of cost savings over 10 years.

This will be invested in building more affordable new homes and improving customer services.

Guy Weston, chief executive at FH. said: “The merger of two high performing and financially-strong housing associations will create a new housing group with significant regional and national influence and the strength and stability to maintain and develop local services.

“It will build on both organisations’ excellent reputations and track records, combine resources to enhance the quality of service to customers, create a new business better equipped to meet a wider range of community housing needs and more able to respond effectively to the constantly changing and challenging business environment.”

Stewart Mountfield, chief executive at WCH, added: “This is a really exciting opp-ortunity for everyone in-volved.

Both organisations have strong similarity in terms of values, vision and ambition and are committed to the creation of a stronger, customer-centred social business.”

Work has now started to consult with customers and other stakeholders, with a view to seeking approval, in early 2014, from the Homes and Communities Agency for the merger to go ahead. If that is given, FH and WCH will join forces in April 2014. The group will manage homes across Worcestershire, Herefordshire and Gloucestershire. It has plans to build more than 5,000 affordable homes and invest an extra £30m in homes and services over 10 years.