The controversial company managing social housing in Lambeth will be sacked in a year if it does not improve its performance.

The council's Labour administration said if it was re-elected in May, it would effectively give Lambeth Living 12 months to achieve a two star Audit Commission rating, or the Arms Length Management Organisation (Almo) would be given the boot.

Achieving a two star rating would unlock £250m of decent homes funding promised by the Government - the equivalent of £8,000 to improve each council home.

Council leader Steve Reed said: "Council tenants and leaseholders have put up with substandard housing services for too long.

"The decent homes funding is vital to turn around housing in Lambeth.

"If they do not get the two star rating in a year, they will be sacked, it’s that simple."

The crucial Audit Commission inspection is set to take place next summer.

Coun Reed said Lambeth Living would only be saved after a failed inspection if it was obvious a further inspection within six months would provide the two star rating.

He said he was confident from speaking with housing bosses the target would be achieved.

The Almo has proved massively unpopular with tenants and leaseholders, who have seen the quality of housing services they receive plummet.

It has also been rocked by a string of scandals including residents being charged twice for maintenance works, being vastly overcharged for bills, and with just two of over 100 tower blocks having valid fire safety certificates A scathing Audit Commission report last year said housing had worsened under Lambeth Living.

Lambeth Living Chair Keith Hill said: "Lambeth Council is quite right to insist on high standards for Lambeth Living.

"We look forward to responding to their tough demands, and we are confident that we can improve our performance in the direction of the two stars."

Coun Reed said whether the Almo model would be scrapped should Lambeth Living be sacked would be subject to a public consultation.

He said much would depend on the £250m still being guaranteed if a Conservative Government was elected.