Funding shortfall forces Oldham Council to press for the transfer of homes from ALMO
Push for arm’s-length transfer
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Oldham has become the first council to push for the conversion of a successful arm’s-length management organisation into a housing association - exposing major national funding problems.
The council is pressing ahead with plans to transfer First Choice Homes Oldham’s 12,000 homes to a housing association because it is facing a £218 million funding shortfall over the next 30 years. The ALMO is rated as ‘good’ by the Audit Commission and has brought all of its homes up to the decent homes standard.
Gwyneth Taylor, policy officer at the National Federation of ALMOs, said all ALMOs were ‘faced with the position post-2010 that unless the major repairs allowance is substantially increased they won’t have the resources to sustain decent homes’.
‘The important thing is tenants should have a real choice - they shouldn’t be forced down the [stock transfer] route because there is no other way to get the money,’ she said.
Hugh Broadbent, chief executive of FCHO, said it had decided on stock transfer ‘perhaps earlier than others’.
The move to transfer homes from Oldham’s successful arm’s-length management organisation proved ALMOs were part of a ‘two-stage privatisation’, Defend Council Housing claimed.
Alan Walter, chair of DCH, called on tenants to reject transfer and campaign for a fairer funding deal as part of the government’s ongoing review of the national housing subsidy system.
Speaking to Inside Housing Richard McCarthy, director general of housing and planning at the Communities and Local Government department, said the council would have to ‘hand the decision to transfer’ over to tenants.
‘Oldham may think the long-term future is better within a transferred body but it isn’t their choice,’ he said.
Tenants in Oldham will be balloted to approve the proposals.
Salford became the first council to transfer its homes from a failing ALMO to a housing association in October.
ALMO characteristics must not be lost
John Perry, policy advisor, Chartered Institute of Housing
This proposed transfer shows how important it is that the government’s review of council house funding provides a real option for arm’s-length management authorities to have control of their finances and to be able to raise new investment funds. Already, authorities like Oldham are finding that their ALMO is unsustainable now that their decent homes programme has finished.
If the government wants to keep the ALMO model as an ongoing option for council housing, it needs to reassure authorities reaching Oldham’s position that their ALMOs will be able to continue to be able to invest in their stock in future, without having to resort to stock transfer. The danger is that what many saw as a new model for the long-term future of council housing will wither through neglect, as more and more councils run out of funds.
However, given that Oldham may now go ahead and create a new landlord body, it is also important that the Tenant Services Authority allows the new body to retain as many characteristics of an ALMO as it can – with high levels of tenant accountability and a strong local focus to its business. The TSA needs to be alive to the possibility that several authorities, like Oldham, will feel the need to transfer but will want to stay as close as possible to the very successful ALMO model, which has given tenants the level of service they want.
John Perry was one of the architects of the arm’s-length management model
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Readers' comments (3)
Iain Smith | 09/12/2008 10:56 pm
What a load of rubbish from the Chartered Institute of Housing. Hasn't John Perry realised that there is a credit crunch?
High level of tenant accountability with an ALMO? He's having a laugh!
Visit http://www.ratmo.org.uk/ for the real situation (In Kensington and Chelsea in central London)
Iain Smith
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Iain Smith | 09/12/2008 10:56 pm
What a load of rubbish from the Chartered Institute of Housing. Hasn't John Perry realised that there is a credit crunch?
High level of tenant accountability with an ALMO? He's having a laugh!
Visit http://www.ratmo.org.uk/ for the real situation (In Kensington and Chelsea in central London)
Iain Smith
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james allen | 22/01/2010 8:15 pm
We need to be vote yes for the councils budget will reduce, of wich will affect the way FCHO is run.
it is the way forward to get more things done
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