Super ALMO marks first anniversary with £700,000 of efficiencies
East Kent exceeds savings targets
Is East Kent’s arm’s-length management organisation an endangered species as councils look to bring housing services back in-house to save money, is the so-called ‘super ALMO’ model a viable alternative?
It is just over a year since the East Kent arm’s-length management organisation launched, and managing director Brendan Ryan is pleased with its progress. On paper, the organisation is doing well. It has exceeded its savings target by almost £500,000 and upped its customer satisfaction. But with ALMOs becoming an endangered species as councils look to bring housing services back in-house to save money, is the so-called ‘super ALMO’ model a viable alternative?
East Kent Housing launched in April 2011 and was the first ALMO to manage housing stock on behalf of four local authorities - Canterbury, Dover, Thanet and Shepway - taking on nearly 18,000 homes. It was something of an experiment for all involved.
‘Merging has allowed us greater economies of scale, but our prime motivation was trying to get a marked improvement in the way we provide services and a focus on what tenants really wanted,’ Mr Ryan explains.
The first-year figures seem to suggest that East Kent Housing has achieved its goals. It found a promised £232,000 worth of savings for the four councils by tightening up its operations and improving procurement. However, a further £314,000 came from staff reductions made earlier than planned and it also saved £156,000 more than expected on back-office supplies.
Since it launched, the ALMO has reduced rent arrears by almost £35,000, from almost £1.09 million last year to just over £1.05 million this year by starting a text message reminder service for its tenants. Helen Buller, chair of the organisation, says demonstrable savings will help to improve the financial relationship between councils and ALMO.
‘Because we managed to save a substantial amount of money this year, the councils have let us keep 5 per cent of surpluses,’ she explains. The organisation recorded an £800,000 surplus last year, with its 5 per cent acting as a contingency fund for the future. It also helps fulfil another of its promises to the councils: ensuring longer-term resilience for individual housing revenue accounts. ‘If you can show you have improved tenant satisfaction and increased savings then the councils will give you more flexibility in providing the service,’ Ms Buller adds.
So far it has done this. The super ALMO’s customer satisfaction is up to 98.5 per cent, from as low as 92 per cent for the individual councils last year. Mr Ryan has set up tenant scrutiny panels which will produce their first report on estate improvement and tenant involvement later this year.
Involving tenants in the housing management process was one of the organisation’s pledges to the councils and Anthony Ovenden, former chair of the Dover area tenants’ board, is pleased: ‘It does care, it does meet our needs and it does listen. Some people may make unrealistic demands but I feel that East Kent Housing is delivering the service it promised.’
Mr Ryan argues the organisation has maintained its local feel by limiting itself to a geographical area of around 420 square miles. But it hasn’t all been easy. Of the 230 staff who came over from the council housing departments, 10 per cent had to be cut. ‘It has been a worrying year for staff,’
Mr Ryan acknowledges. ‘They’ve had to reapply for their jobs, but we’ve given them the hope that with this new organisation things can change.’
With two staff conferences a year and new weekly briefings from senior management, Mr Ryan is certainly doing his best. But there are tough times ahead. The organisation is preparing for the impact of changes to housing benefit in the Welfare Reform Act, and warns it will be ‘horrendous’. ‘We’re going to be making efficiency savings in other parts of the service because we know we will have to do more debt recovery as a result of the changes,’ Mr Ryan explains.
The main benefit of East Kent’s model appears to be its scale, which allows it to find efficiencies normal ALMOs could not. Its long-term success, however, will depend on maintaining high tenant satisfaction levels. If it manages to do so, then the argument that bigger is sometimes better could well hold sway with the rest of the ALMO movement.
savings target for 2011/12
actual savings for 2011/12
rent arrears reduction