Heater Problems

I have been trying to diagnose & rectify a problem with my 1999 Ford Escort Turbo Diesel heating system, it only blows luke warm air. I have changed the Thermostat & flushed the Matrix but still have the same problem. I have also noticed the bottom hose on the Radiator is not hot but the top one is hot. Any help would be well appreciated !

Any suggestions ?? many thanks