Only as good as his tools

‘Everyone deserves the opportunity to rent or buy a decent home at a price they can afford, in a place where they want to live and work.’ That was prime minister Gordon Brown’s pledge in a recent article for Inside Housing.

But some tenants are now facing a longer than expected wait for that pledge to become a reality.

Shortly after Mr Brown outlined his promises for building Britain’s future, the government announced that arm’s-length management organisations awaiting two stars from the Audit Commission would not receive decent homes funding worth £150 million until 2011/12.

The deferral has left the affected ALMOs wondering when and how they can carry out planned refurbishments in order to meet decent homes standards. Some ALMOs have yet to break the news to their tenants.

Andrew Taylor, chief executive of Sutton Housing Partnership, says: ‘The announcement is likely to have a damaging impact on relationships with our residents, many of them elderly and vulnerable, who will see this as a further sign of the total disregard for their poor living conditions.’

As round six ALMOs and their tenants come to terms with their disappointment, what does the move really mean and what, if anything, can ALMOs do about it?

Four of the 16 councils with ALMOs in round six funding bids are not affected by the deferral, having already achieved their two-star rating and received decent homes funding.

East Durham Homes, which was mid-inspection when the government announced its decision, has since been told it will receive funding. Basildon was also mid-inspection and is still awaiting the results.

There are 10 remaining councils with ALMOs: Charnwood, Havering, Lambeth, Lewisham, NE Derbyshire, Redbridge, Salford, Sedgemoor, Sutton and Tower Hamlets, responsible for more than 137,265 homes in total.

They now have a number of options if they want to start refurbishment sooner rather than later.

Short changed

The first, says Michael Clegg, head of markets and renewal at the Homes and Communities Agency, is to bring forward money from local authorities’ major repair allowances for 2010/11.
Four local authorities told Inside Housing they had accepted an ‘invitation’ from government in March to do just that but, following the decent homes deferral decision in July, they now face a funding gap.

Cash from major repairs allowances might fund refurbishments on a few homes but it will not stretch to entire estates - and it could also leave councils short of repair funds in the future.

‘The main problem with bringing forward MRA is that the ALMOs are then unable to do any other major repairs,’ says Gwyneth Taylor, policy director at the National Federation of ALMOs. ‘They will have to stick to high-priority repairs like gas leaks.’

There could be an even bigger problem on the horizon for councils and ALMOs that have chosen to take this route. An investigation has been launched following a fire at Southwark tower block Lakanal House, which killed six people in July. The probe could lead to changes to fire safety provisions. If this is the case, councils and ALMOs that have brought forward MRA funds could find themselves with a hefty bill for changes to their properties which they will now struggle to pay.

Using money from capital receipts is also an option, although Mr Clegg admits this is unlikely to be a huge help, given the recent drop in right to buy sales.

For many ALMOs, delaying refurbishment plans is all they can do. Eileen Mallon, director of housing and health at Charnwood Neighbourhood Housing, says: ‘There isn’t much we can do other than push back the programme a year.’

But delaying refurbishment has consequences of its own. While major new build projects employ builders from any part of the country, decent homes refurbishments usually rely on local sub-contractors. What’s more, decent homes funding also supports apprenticeships, so employment levels in communities are also likely to suffer.

The HCA is keen to emphasise that the funding has not been cut but simply deferred. But its position is not entirely secure.

Dean Gill, director of customer services at Homes in Sedgemoor, says: ‘We don’t know what will happen if the Conservatives come to power, or even what Labour will do after the general election.’

The Communities and Local Government department’s attempts to reassure ALMOs that the funds will be forthcoming in 2011/12 does appear to leave room for manoeuvre.

‘We remain committed to the decent homes programme and those ALMOs that have not yet achieved their two-star standard are more likely to receive funding in 2011/12,’ a spokesperson states - although he emphasises the intention is to make the funding available.

Broken contract?

Many organisations are appealing against the deferral, including London mayor Boris Johnson and the NFA, which hopes a letter sent by the CLG to ALMOs over the past 18 months might aid its case. The letter laid out how much decent homes funding the ALMO would receive each year, subject to receiving two stars.

This could constitute a contractual agreement with the ALMOs which the government has now broken, says Ms Taylor. ‘Since the CLG and the HCA spelled out the amount that would be available in each year, that does seem to appear to amount to a contractual agreement.’

‘We are greatly disappointed that the government has, in effect, reneged on commitments made to councils and to ALMOs and that it has not really thought through the implications in terms of the other benefits that decent homes bring, such as jobs and improved health.’

A spokesperson for the CLG says: ‘When we wrote to ALMOs we made it clear that funding is dependent on them achieving their two-star rating and the availability of funding.’

If one thing is certain, it is that the majority of round six ALMOs feel hard done by. Residents living in substandard housing are likely to share that feeling until the government comes good on its cash pledge.

Have your say

You must sign in to make a comment