Lambeth Council cuts ALMO fee and predicts HRA deficit
130 jobs in danger at Lambeth ALMO
A London arms-length management organisation will have to cut more than a quarter of its jobs and close two area offices if its parent council goes ahead with plans to slash its management fee by £2.3 million.
Lambeth Living, which manages around 34,000 homes for Lambeth Council, said it may need to cut between 50 and 70 of its 500 staff, largely frontline, and close at least two area offices by the end of June 2010 and reduce the number of posts in the organisation by 130 over three years.
Draft housing budget proposals considered by a Lambeth Council committee last week suggested cutting the ALMO’s management fee by £2.3 million. The cuts include an £800,000 reduction in the management fee when the Ashmole estate transfers to Metropolitan Housing Trust, likely to happen in March, and a £1.5m cut in the fee for managing other properties.
The fee cuts are separate from measures to correct a forecast deficit of around £1.2 million on the council’s housing revenue account.
Lambeth Living said it needed the extra cash in order to bring its services up to two-star standard when it is inspected by the Audit Commission in 2011. It needs the rating in order to unlock £223 million of decent homes funding from the government.
It is one of several ALMOs which had their decent homes funding delayed until 2011/12 by the government.
Former housing minister Keith Hill, who chairs Lambeth Living, said the government had earmarked decent homes cash for the ALMO once it reached two stars.
He said: ‘We are calling for different expenditure, not more, and a fair rent rise that provides tenants with sustainable, value for money services.’
Lambeth Council’s draft budget proposals, which were discussed at a meeting last week, included an average 5 per cent rent increase and average 8 per cent service charge rise.
Its HRA was in deficit by £12.2 million in 2008/9 but various cost saving activities had reduced that deficit.
Lib Peck, cabinet member for housing at Lambeth Council, said: ‘We are talking and working with them [Lambeth Living] to minimise the impact on services. When we pull together the final report for cabinet on 8 February, I hope we will have been able to bear in mind those conversations and they will come out of the process a bit more satisfied.’
In figures
£12.2 million
Lambeth council’s 2008/9 HRA deficit
£1.2 million
The council’s forecast 2009/10 HRA deficit.
£2.3 million
The cut in Lambeth Living’s management fees
130
Possible job cuts at Lambeth Living over three years
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Readers' comments (2)
Peter | 29/01/2010 1:36 pm
Despite years of trying to get their act together, the Lambeth administration is now plagued with this terrible bombshell and sadly, the maladministration continues! Lambeth Living was going to be the saviour of all housing issues in Lambeth. The tenants were promised better services and quality homes. Then when Lambeth Living is up running after a few months, there was panic because we got our sums wrong (by a few millions of quid), they said!
How can you be out by a few millions of pounds? Where was the due diligence? How can you get it so wrong?
The tenants and leaseholder will have to pay more in rents and service charge, they said, not to mention the poor service you are going to get in return!
What desperate state of affairs for the residents of Lambeth!!!!!
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Melvin Bone | 29/01/2010 3:44 pm
So to get a better rating they will cut between 50 and 70 of its staff and close at least two area offices.
That will give a better service will it?
The management sound like a bunch of buffoons.
What they probably need to do is cut out a layer of managment.
Maybe the top layer.
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