Learning at arm’s-length
Can the remit of ALMOs be extended to projects such as building schools? Paul Butterworth, head of social housing at TLT, explains.
Following the successful completion by various arm’s-length management organisations of their decent homes programme, some local authorities are to bring back in-house the housing management and maintenance functions they’d transferred to these ALMOs in the first place. Conversely, it’s also been suggested that other authorities may want to continue using ALMOs and actually extend their remit to involve them in other programmes such as the government’s building schools for the future scheme. (Inside Housing, 12 March) But is this possible?
In extending the remit of ALMOs, two main issues arise. First, do ALMOs have the power to participate in such programmes? And second, does the local authority have the power to select the ALMO as the private sector partner or third party in the local education partnership?
The simple answer to the first question is yes. ALMOs were set up under the local authorities’ ‘well being’ powers and while they were intended only to manage and maintain the council’s housing stock, by and large they have objects (the part of a company constitution outlining the extent of its powers) which allow them to undertake a variety of activities. These would include the refurbishment, construction, management and maintenance of schools.
The answer to the second question is not so simple. The process of transferring the housing management and maintenance functions to the ALMO in the first place was not a procurement exercise per se - it was simply a device to allow councils to continue participating in these functions but at arm’s-length.
Although councils had to obtain consent from the secretary of state to enter into the contractual arrangements with their ALMO, a full scale procurement exercise was avoided because ALMOs are all wholly-owned subsidiaries, contracting only with the local authority, and effectively regarded as a department.
Building schools for the future, on the other hand, is designed to procure the highest quality, innovative and most cost-effective solution for the refurbishment and/or construction, management and maintenance of schools in the council’s area, in conjunction with Partnership for Schools.
Without having taken part in a full-scale Official Journal of the European Union procurement process, it is this element of the BSF process which is likely to be a powerful factor preventing ALMOs being able to take on the private sector body’s role in the local education partnership. Therefore, while there is probably nothing to stop local authorities contracting with their ALMO as a local education partnership, the ALMO will need to have been selected through a competitive process.
ALMOs’ governing arrangements may also give pause for thought. The most successful have achieved their business plan through the active participation of the people affected — the tenants — as well as a clear focus on the task in hand. While no doubt many tenants are also parents of local school children, this is not the same, and managing and maintaining schools is not the same either. The obstacles to ALMOs participating in schools programmes may be more than just legal.
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