The council was told "significant improvement" was needed

Communities Scotland rated the local authority's homelessness services "poor" and said significant improvement was needed.

But the report recognised the council had taken steps to review its policies.

It was rated "fair" in other areas, such as housing management and property maintenance.

Cllr Gerry Goldie, convener of housing and social services, said the council was re-examining its policies.

Policy review

He said: "A range of action is already under way with the review of the major allocations systems one of the major ones.

"I am confident that we can achieve a major improvement to the quality of service we provide to all our tenants and to people applying for a home."

In January this year, the local authority announced that only those considered to be in greatest need would be given a council home while the policy review was taking place.

It emerged at the end of 2006 it had spent �1.2m a year on bed and breakfast accommodation for those officially classed as homeless.

Recent figures show more than 12,500 people were waiting for a council property in the district.

About 600 of those were classed as having a priority need. The local authority currently has about 17,000 properties in its housing stock.