Published by Ross Macmillan for
Thursday 27th October 2011

Plans that could see nearly 80,000 council homes move back under council control have received backing from councillors.

Islington Council chiefs have minded to recommend that its 35,000 council homes – currently being managed by ALMO Homes for Islington – move back in house, while in Sheffield, the council’s preferred option is to see its 42,000 council homes returned in house, where currently they’re managed by ALMO Sheffield Homes.

ALMOs were set up as a means of accessing Government cash for the Decent Homes Programme. As that nears to an end, most councils are reviewing their ALMO arrangements either dissolving them, extending the contracts or converting them to housing associations.

There are a number of other options available to councils at the review stage including new models that provide much greater tenant involvement, such as the well-trailed CoCo model.

Of the 60 ALMOs nationally, 20 have so far had their management agreements extended following a review.

In Sheffield, the ALMO – which has consistently scored the maximum ‘excellent’ rating in three consecutive Audit Commission inspections – was set up in order to attract over £600m of Decent Homes funding, but its contract is due to expire in 2014. Although the council’s preferred option at this stage would be to manage the stock directly, no final decision will be made until tenants are balloted in the new year.

It says the driver is changes to the Housing Revenue Account (HRA) which will result in a shortfall of resources of £217m over 30 years. The council’s report, which it’s asking cabinet members to endorse, says: “A separate organisation brings with it the need for its own Executive Management structure, as well as independent ‘back office’ functions and other associated costs such as communications, accommodation, IT and governance. An in-house service offers scope for significant savings in these areas without impacting on front-line services.”

In addition, it said that the £4.5m reserves held by the ALMO would transfer “directly into the council’s HRA reserves if the company were wound down”.

In Islington, a decision by the council’s executive is expected next month. Consultation with residents has finished and a report is being put together for the council’s executive next month.

Housing chief councillor James Murray said that having control of the housing stock – and the rents – would enable Islington to borrow money in order to build more housing. Islington hopes to create 2,000 new affordable homes by 2014.