A whole new rule book
ALMOs are now subject to the Tenant Services Authority’s regulations. Gareth Hall, partner at Devonshires, explains.
Until recently, arm’s-length management organisations have operated in a different regulatory environment from registered providers of social housing. The requirements of the Tenant Services Authority as regulator and the Homes and Communities Agency as funder of social housing largely passed them by. But the ‘switching on’ of the remainder of the Housing and Regeneration Act 2008 brings these requirements closer to home.
From April 1, local authorities which own social housing are registered providers and as such, are subject to much of the TSA’s regulation. Those with ALMOs may expect these organisations to carry out their obligations in line with TSA requirements.
While most ALMOs just manage social housing property on behalf of local authorities, some of them have taken a transfer of ownership of the property from the authority.
A number have funded acquisition and development costs through grants from the HCA.
An ALMO which obtains a new HCA allocation on or after 1 April 2010 must become a registered provider in their own right before the property is let as social housing. The same goes for other subsidiaries formed by authorities to acquire HCA funded stock.
TSA’s regime
The TSA has published six regulatory standards. ALMOs already operate under some of these standards - in particular, the home/quality of accommodation standard which cross refers to the decent homes standard. Others also reflect familiar themes. All registered providers must supplement these standards through a ‘local offer’ which is developed with residents and other stakeholders, which must be available in draft by October 2010 and go ‘live’ by April 2011.
ALMOs which register as social housing providers must also comply with the ‘tenancy: rents’ standard, ie rent restructuring (again familiar, as authorities have a parallel regime). Under the governance and viability standard they must demonstrate viability and comply with (or explain deviations from) an appropriate governance code covering roles and responsibilities, risk management and probity. Some ALMOs are going with the National Housing Federation’s codes of governance and conduct, though other codes may be acceptable.
HCA funding
ALMOs which already have HCA allocations have signed funding agreements, generally backed by authority guarantees. While these agreements are shorter than those the HCA requires from developers, they are still lengthy. It remains to be seen whether the HCA will agree to shorten grant documentation for ALMOs which become registered providers.
Existing registered providers sign much shorter programme partnering agreements. ALMOs which become registered providers may also want the HCA to drop its request for an authority guarantee. Where guarantees are required, this will continue to increase the contingent liabilities of the authority and authorities may have limited appetite to do this.
Enforcement
An ALMO which becomes a registered provider will be subject to the TSA’s intervention and enforcement powers ranging from voluntary undertakings or fines to a compulsory transfer of management or assets. The TSA is required to act proportionately here. A more limited range of TSA powers applies to local authorities.
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