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North East council set to close down ALMO
A council in the North East with more than 18,000 homes looks set to close down its ALMO.
Gateshead Council’s cabinet approved proposals last week to consult with staff and residents on bringing housing management back in-house and integrating the service with other council functions.
The Gateshead Housing Company (TGHC) was placed under review last year, shortly after the Regulator of Social Housing declared that it had breached the Home Standard through serious fire, asbestos and electrical safety failings.
Consultancy Pennington Choices, which was commissioned to lead the review, concluded that scrapping TGHC and reintegrating housing services scored highest against the Labour-run council’s priorities.
Returning housing management to the council will provide a chance “to deliver a renewed purpose” for the service, an officer’s report to the cabinet said.
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The council predicts that on its current trajectory, its Housing Revenue Account (HRA) will fall into a deficit after 2025/26 and fall £691m into the red by 2050.
Keeping TGHC and introducing saving measures would leave the HRA with a £44m positive balance in 35 years’ time, Pennington Choices said, while closing it and consolidating housing services with other council functions would leave the balance at £170m.
Savings would mainly be achieved through having a smaller staff, while the consultancy assumed 5% efficiency for consolidating services.
It had considered four options, including keeping the ALMO and transferring the council’s housing stock to another organisation.
All the options would require “some loss-making stock to be disposed of at a nil cost”, the officer’s report said.
John Adams, cabinet member for housing at Gateshead Council, said: “Over the past eight months, we have reviewed all options available to us and we feel that bringing the council’s housing stock under our control will achieve the best outcomes for local people that are fully aligned with our priorities.
“This will mean that we can focus on what matters most, providing good-quality housing with a mix of tenures and affordable options that meet the needs of local people including families and older people, enabling them to live healthy lives and to make healthy choices, preventing ill health.”
Jim Coulter, chair of TGHC and former chief executive of the National Housing Federation, said: “We look forward to working with the council to create the new service, building on the work to develop excellent services over the last 16 years.”
Officers are now set to develop a detailed business plan for taking back control of the council’s housing services.
TGHC was set up in 2004 to access funding through the government’s Decent Homes Programme and currently has more than 780 full-time equivalent staff.
It is one of around 30 ALMOs operating in England following a series of closures in the past few years, down from nearly 70 in 2009.
