I should COCO
Few expected arm’s-length management organisations to feature in David Cameron’s new vision for public services.
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For some, surprise will have turned to shock at seeing the PM himself recommend ALMOs move ‘into the housing association sector’.
Labour created ALMOs, of course, as a means to unlock decent homes funding without forcing council tenants to switch to a housing association landlord. The suggestion that the current government is as good as reversing that will not go down well with those who cherish the accountability they argue council ownership provides.
Those who decried stock transfer the first time are currently exercised by the fact four councils with ALMOs have already transferred their stock to housing associations. Monday’s white paper will worry them more. It needn’t.
First, ALMOs which retain their present form will find themselves financially hamstrung, their borrowings restricted by a government cap for at least two years.
Second, the transformation Mr Cameron wants needn’t wipe out ALMOs. Becoming an association is just one way for ALMOs to answer the white paper’s call to ‘invest, innovate and diversify’. Council-owned, community-owned organisations - COCOs - offer tenants more than an alluring acronym.
An unconventional form of stock transfer, COCOs would involve the ALMO owning the stock they now manage, while maintaining links with the council by paying off its housing debt. Majority-owned by the community, with the council owning a third, COCOs could also raise private finance, just as associations do. And though ministers might object that COCOs leave debt on the public books, they don’t require state funding as stock transfer housing associations do.
No doubt this is an argument the National Federation of ALMOs, which backed COCOs last month, will pursue in seeking to maintain its members’ discrete housing proposition.
Still, ALMOs face the possibility of tenants voting for the council to take management back in-house, as has happened in six areas. Here, the sector must trumpet its track record, including that Audit Commission inspectors were consistently more impressed with their services than other types of landlords.
The trick will be to turn surprise, then shock, into opportunity.