Memorandum by the National Federation
of ALMOs
SUMMARY AND
RECOMMENDATIONS
— Since their establishment four years
ago, ALMOs have secured an unrivalled track record of success,
from meeting Government targets for improving housing standards,
to tenant empowerment and groundbreaking new services on safety
and community integration.
— The DCLG's "Review of Arms Length
Management Organisations" recognised the achievements of
ALMOs and sets the scope for their long term future.
— ALMOs have delivered large scale,
decent homes, refurbishment projects on time and in some cases
ahead of the 2010 target date.
— To further improve housing, build
new homes, regenerate estates and provide safe communities, ALMOs
require longer-term stability and greater financial freedom.
— The decision by the Secretary of
State to ask all ALMOs with expenditure profiles beyond 2007—08
to review their target dates and consider reprofiling their spend
beyond 2010 needs to be reviewed, otherwise it will have detrimental
consequences for tenants and ALMOs.
— There needs to be funding after 2010
for maintaining housing brought up to standard in 2010 and investment
to provide for further improvement, with a total of £3.2
billion being made available for the 2008-11 Spending Review period,
and a further £1.2 billion for the following period.
— ALMOs have the potential to deliver
new build homes to replenish stock, but with no physical assets
to support borrowing, and restrictions on raising and keeping
revenue, ALMOs are currently unable to invest in new build.
— ALMOs need to have long term security
of operation and finance reform to enable them to raise the funding
for new build.
— A community ownership model would
enable access by ALMOs to private sector finance and borrow on
the basis of income stream to fund new build housing.
— Allowing ALMOs to be self-financing
outside the HRA would offer long-term financial security, enabling
ALMOs to better manage assets.
— The Government should give incentives
to local authorities and public sector bodies to release land
for ALMOs to deliver new homes.
— Under an amended structure, ALMOs
would be able to supplement RSL new build, replacing properties
lost through Right to Buy, properties that need remodelling or
replacement due to structures no longer meeting current or future
needs.
— ALMOs are not only interested in
owning stock, but also in managing the neighbourhood.
— Tenants should become financial stakeholders
in their ALMO, sharing the financial benefits of success.
1. THE EFFECTIVENESS
OF ALMOS
AS A
SOCIAL HOUSING
MODEL
1.1 ALMOs deliver high quality services.
Their local focus means they are embedded in, and have an understanding
of, their community as they only work in one local authority area.
1.2 ALMOs have demonstrated their willingness
to innovate and engage in initiatives that go beyond the stock
management—enhancing the lives of those living in ALMO neighbourhoods.
1.3 Currently there are 62 ALMOs in operation
across 57 local authorities managing 924,000 council properties.
Round 6 of the ALMO programme could see the total rise to 69 in
2007, and see ALMO managed homes top the one million mark.
1.4 Of the 48 ALMOs inspected by the Audit
Commission, 12 have been classified as excellent (3*) and 29 as
good (2*) on performance and service delivery. Performance is
also improving year on year.
1.5 No traditional local authority and only
one housing association has achieved three stars in the last three
years.
1.6 ALMOs have delivered large scale, decent
homes, refurbishment projects on time and in some cases ahead
of the 2010 target date.
1.7 ALMOs have demonstrated an impressive
record of delivering value for money services. The most recent
analysis of local authority annual efficiency statements showed
that, while ALMO authorities make up only 21% of local housing
authorities in England, they produce 68% of local authority housing
efficiency gains.
1.8 ALMOs have an excellent record on procurement.
Long-term procurement relationships have brought investment in
apprentice training and social enterprises as well as efficiency
gains.
1.9 ALMOs are popular with residents with
direct involvement in the management of their homes.
1.10 In the latest survey, 77 per cent of
ALMO tenants were satisfied with the performance of their housing
manager, higher than either local authority controlled housing
or housing associations.
1.11 Tenants have a greater say in how their
properties and environment are managed and how their money will
be spent than under any other structure. At least a third of Board
members are tenants, a higher proportion in some ALMOs, and many
Boards are chaired by tenants. Three out of the four authorities
awarded Beacon Status for "improving housing services by
involving tenants" are ALMO managed.
1.12 Day to day management is handed to
Boards made up of tenants, councillors and independent members
who reflect the diversity of the communities they serve. Strong
community leadership also allows ALMOs to get things done.
1.13 Working within only one local authority,
each ALMO has a detailed knowledge of the local community enabling
it to tailor services to needs.
1.14 Separation from the council allows
staff to focus purely on service delivery.
1.15 ALMOs recognise that improving housing
standards is only one part of a wider role to improve neighbourhoods.
ALMOs have an active role in regeneration and improving the local
environment.
1.16 ALMOs contribute to the quality of
the lives of their customers well beyond the traditional remit
of housing management, and help councils and other agencies deliver
innovative social inclusion and community safety agendas. They
provide out of school clubs, mother and toddler schemes, training
schemes, activities for older people, savings and debt reduction
advice, and help with tackling fuel poverty amongst others.
1.17 Leading ALMOs have signed up to the
Respect Standard of Housing Management, designed to help stamp
out anti-social behaviour and build a stronger sense of community.
Youth intervention schemes offer young people constructive alternatives
to hanging around on streets, and by working, for instance, with
schools and football clubs.
1.18 However, to further improve housing
standards, build new homes, improve and regenerate estates and
provide safe communities, ALMOs require longer-term stability
and greater freedoms.
1.19 They are the potential first choice
partners for regeneration and are well placed to make better use
of public sector assets, including demolition and replacement
of stock where necessary.
1.20 Because they work within the local
community, ALMOs would also be suited to the promotion of mixed
tenure solutions and to delivering broader neighbourhood functions
on behalf of their home councils.
2. THE LEVEL
OF PUBLIC
FUNDING REQUIRED
TO MEET
SOCIAL HOUSING
NEEDS
2.1 The Decent Homes Standard is a major
improvement, but housing needs and peoples' aspirations increase.
There needs to be funding after 2010 for maintaining housing brought
up to standard in 2010 and investment to provide for further improvement.
2.2 The following resources will be required
to meet the commitments already made to those councils and tenants
in the indicative and anticipated ALMO bids to date:-
2.2.1 A total of £3.2 billion for the
2008-11 Spending Review period
2.2.2 A further £1.2 billion for the
following period
2.3 With this in mind, the recent decision
by the Secretary of State to ask all ALMOs with expenditure profiles
beyond 2007—08, particularly those with major programmes,
to review their target dates and consider reprofiling their spend
beyond 2010 to avoid peaks in expenditure, will have significant
repercussions:
2.3.1 Some ALMOs will have to interrupt
current contracts
2.3.2 Some Round 6 ALMOs may have to defer
improvements to their homes for up to four years taking them beyond
2014 with implications for the survival of the ALMO, given the
length of time without any benefit being apparent
2.3.3 Work of a lower standard may be imposed
2.4 ALMOs accept the current and future
stringent constraints on public expenditure, but it is important
that this issue is dealt with in a way that is fair to tenants
and ensures that ALMO success in improving the lives of their
residents can be developed.
3. THE FUTURE
ROLE FOR
LOCAL AUTHORITIES
AS BUILDERS
AND MANAGERS
OF SOCIAL
HOUSING
3.1 New social homes require subsidy through
Social Housing Grant (SHG) administered by the Housing Corporation.
3.2 Without SHG it is much more difficult
for ALMOs to develop viable schemes that stack up and retain reasonable
rents and which compare favourably with RSL schemes.
3.3 ALMOs are not asking for special treatment—simply
a level playing field with RSLs.
3.4 We would also like to see the Housing Corporation
act upon the original intent of the legislative change in the
Housing Act 2004 that enabled ALMOs and private developers to
apply for SHG.
3.5 There are also technical issues which
currently prevent ALMOs from competing with RSLs and the private
sector for SHG.
3.5.1 ALMOs have no physical assets to support
borrowing
3.5.2 Furthermore, due to restrictions on
raising and keeping revenue, it is also not possible to replace
houses sold under right to buy with new build.
3.6 We are seeking to develop a community
ownership model where ALMOs can borrow on the basis of income
stream rather than assets to fund new build housing.
3.7 The current 5-10 year contracts and
erratic Housing Revenue Account system, which recycles income
between councils and makes revenue receipts unpredictable, inhibits
long term planning and therefore the ability to borrow.
3.8 ALMOs cannot give borrowers the assurance
that they will be operational for a period necessary to obtain
finance. To give security for loans, management agreements with
ALMOs would need to be extended significantly—to over 30
years.
3.9 Self-financing, and incentives for local
authorities and public bodies to release land to ALMOs, would
help increase the housing stock and reduce waiting lists.
3.10 Allowing ALMOs to be self-financing
outside the HRA subsidy system would offer long-term financial
stability and security, enabling ALMOs to better manage assets
and deliver services—including new build opportunities.
Six local authorities are working with the DCLG to further examine
a basic model of freedom from subsidy.
3.11 As they would be outside the HRA, the
right to buy would not be applicable. Applicants could decide
when they bid for a property if they are likely to pursue the
right to buy and consequently bid for council owned properties.
Capital receipt rules would not apply, so the value of the housing
would be retained.
3.12 In some cases, rents could increase,
but in many cases rents would be contained within the normal rent
restructuring parameters through cross subsidy.
3.13 Greater use of council owned and HRA
land, where it is still available, could help develop affordable
homes.
3.14 The Government needs to give further
guidance and incentives to local authorities and other public
sector bodies to release land for this purpose.
3.15 The "disposal for best consideration"
rules need to more clearly recognise the added social value and
the "best outcome" that can be delivered by using land
supply for affordable housing.
3.16 Under an amended structure, ALMOs would
be able to supplement RSL new build, replacing properties lost
through Right to Buy, properties that need remodelling or replacement
due to structures no longer meeting current or future needs.
3.17 ALMOs only work within their own local
authority areas, and so offer detailed knowledge of local community
needs in relation to new build.
3.18 ALMOs are not only interested in owning
stock, but also in managing the neighbourhood. This would mean
managing not just council and ALMO owned property, but also RSL
and private sector owned, enabling a more holistic approach and
a suite of services at the neighbourhood level.
3.19 Tenants should become financial stakeholders
in their ALMO, sharing the financial benefits of success, or as
"shareholders" in the housing stock, benefiting from
added stock value, providing tenants with some form of return
on the capital value.
4. THE ROLE
AND EFFECTIVENESS
OF THE
PLANNING SYSTEM
4.1 The supply of affordable housing can
be improved both by increasing the availability of sites specifically
prioritised for this purpose and by increasing land brought forward
for housing supply in general, provided that planning policy reinforces
that affordable housing also be provided on site and in kind,
often through Section 106 agreements.
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