What lies ahead?

It’s time to move on

Hugh Broadbent, chief executive, First Choice Homes Oldham

‘First Choice Homes Oldham tenants recently became the first to vote to transfer their homes to a housing association.

‘Transfer for FCHO was the outcome of a tenant-led debate about the future of council-rented homes in Oldham. The circumstances leading to that outcome will be familiar to arm’s-length management organisations elsewhere but there are specific Oldham ones too.

‘The common factors concern money and improvement standards. As an early ‘round two’ ALMO set up in 2002, FCHO only received a grant of £5,500 per home to achieve ‘decency’. The council chipped in another £36 million to deliver some environmental works - a top priority for tenants.

‘However, when we asked tenants what they wanted in the summer of 2008, better kitchens and bathrooms, along with security and sound insulation, came out as critical. Tenants believe going beyond decent homes is fundamental.

‘The Oldham factors come as a result of stock loss - more than 6,000 homes either demolished, sold under right to buy or transferred during the past eight years. The consequent scale of revenue reduction was becoming unbearable. We’ve had to manage with 10 per cent reductions in our management fee from the council for each of the past four years. Falling subsidies also meant our housing revenue account risked tipping into deficit in 2011/12. Solving these financial matters was crucial.

‘A 2008 a stock condition survey showed we had no chance of maintaining decent homes with mainstream funding alone. The 20 per cent of tenants who responded to that summer’s survey revealed their priorities were further improvements and better services - the identity of the landlord was not a showstopper.

‘That December, an options appraisal panel, chaired by a tenant, recommended the council pursue stock transfer. Throughout 2009, tenants developed the transfer ‘offer document’, mindful of the possibility that self-financing might become a serious option thanks to an ongoing government review.

‘On the one hand, we had a transfer business plan that will deliver improvements to a higher Oldham standard plus £350,000 a year of service improvements. Alternatively, there was a potential self-financing option which might deliver, but to a lower standard.

‘We eventually consulted on the offer document during the worst of an Oldham winter and balloted as this year’s spring daffodils emerged - the rest, as they say, is history. On a 66 per cent turnout, 86 per cent voted for transfer.

‘We all believe our eight years as an ALMO will ease the process of becoming a stock transfer housing association. We have refreshed our governance structure - tenants are now the largest group on the 12-person board. The council has reduced its membership to three people.

‘We think we’re as grown up as any housing association. Yet we believe we will continue to have lots in common with the ALMO movement such as the extent of genuine tenant involvement, our single town focus and our natural instinct to work together as social landlords.

‘We are thrilled and pretty humbled by the fantastic vote in favour of the transfer to FCHO, the housing association, next December. At FCHO we can’t wait to bring it on.’

We’ve only just begun

Tracey Lees, chief executive, Barnet Homes

‘Ever since their creation in 2002, ALMOs have been almost inextricably linked in the public consciousness with the delivery of the government’s decent homes programme to upgrade social homes. So it’s no great surprise that this year’s decent homes deadline and the conclusion of that programme is prompting speculation over the sector’s future.

‘But this is to misunderstand the nature of ALMOs, as well as their benefits and potential. ALMOs are about much more than the delivery of decent homes.

‘Most notably, they have enabled us to provide tailored services for residents that go far beyond the scope of traditional council housing departments. At round three ALMO Barnet Homes, for example, we have dedicated teams dealing with rental income and anti-social behaviour. This is not so much a duplication of what is already provided by the council, as a more focused extension of it.

‘One of the other great benefits of ALMOs is that they have given tenants and leaseholders - really for the first time - a direct say on the future direction of council housing.

‘At Barnet Homes, which has 15,000 homes and will complete its £185 million (including £89 million in grant) decent homes work this financial year, a third of our directors are Barnet Homes residents, including the board chair.

‘This is not some cheap tick-box exercise. These directors are opinionated people able to shape the future of our business in line with the interests and concerns of fellow residents.

‘ALMOs will be able to support councils as they increasingly feel the impact of a public spending squeeze. Running Barnet Homes in a business-like way has enabled us to cut £4.5 million from our management agreement with Barnet Council over the past five years - saving the council 15 per cent year-on-year - while continuing to improve performance.

‘This demonstration of value for money means we are ideally placed to work with the council during the economic challenges ahead.

‘Our task now is to sustain these efficiencies while evolving as a business to attract new revenue streams. We are exploring a range of ways to bring in new business, including discussions with Barnet Council about potentially taking on some of their services, such as refurbishing schools.

‘We believe these new business opportunities, together with possible benefits from the ongoing review of council housing finance, mean we can look to the future with optimism.

‘There is no doubt that ALMOs will evolve in different ways over the coming years. Change is essential if the sector is to remain viable, though clearly this must be in line with the wishes of local authorities and - most importantly - residents.

‘But the ALMO model is sound, and we’ve shown we can deliver. To use Sir Winston Churchill’s phrase, the conclusion of decent homes should not be seen as the beginning of the end for ALMOs -but rather the end of the beginning.’

Have your say

You must sign in to make a comment