Four-month-old ALMO forced to make big cuts

Arm’s-length management organisation Lambeth Living will have to axe 130 staff over the next 18 months to help plug a £8.4 million hole in its parent authority’s housing budget.

Officers have warned that Lambeth Council’s housing revenue account debt could reach £14 million by March.

This week the London authority agreed a plan which in April will impose an extra rent rise on tenants of £5.25 a week on top of the rise that the government recommends.

The council rejected a proposal for an in-year rent rise, despite warnings from its director of finance that not doing so meant ‘significant risks’.

Lambeth Living, which went live in June, will see its management fee cut by £1 million.

The ALMO has told the council that this will hamper its efforts to achieve the two-star Audit Commission rating it needs to unlock government funding for refurbishment.

‘To undertake an accelerated headcount reduction in this way could have a significant impact on operational delivery and performance,’ a statement from Lambeth Living said.

John Perry, policy advisor at the Chartered Institute of Housing, described the council’s decision as very significant.

‘ALMO staff will be cut drastically, which is bound to affect services considerably. The forecast surplus is very small, so it could easily lead to another deficit and further cuts.’

Liberal Democrat opposition leader Ashley Lumley last week wrote to housing minister Margaret Beckett asking her to place Lambeth’s housing department in special measures.

‘A financial crisis has engulfed the service, compounding problems of poor performance,’ he said.

‘The crisis in the HRA will gravely undermine any attempts by Lambeth Living to improve services.’

A spokesperson for Lambeth Living said: ‘We are determined to ensure that residents receive a good housing service that also offers good value for money.’

Have your say

You must sign in to make a comment