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Closing down ALMOs produces mixed results for council housing services, exclusive Inside Housing research has revealed.
The number of ALMOs – which stands for arm’s-length management organisations, established by councils to manage their social housing – has halved over the past decade, with a number of high-profile closures in the past two years.
Local authorities often cite efficiency savings and performance improvements as reasons for taking the service back in house, but Inside Housing’s research suggests the picture is mixed.
While some authorities saw improvements in areas such as tenant satisfaction, Housing Revenue Account (HRA) finances and re-let times for empty homes after shutting down their ALMOs, others have seen declines in performance.
For example, Redbridge Council closed its ALMO, Redbridge Homes, in 2012 – a year after its chief executive was sacked over governance concerns, with half the board quitting in protest.
Overall satisfaction among the council’s tenants has since increased from 77.3% in 2012/13 to 81.5% in 2017/18, while over the same period average repairs cost per home fell from £693.42 to £520.83 and the number of voids fell from 62 to just three.
However, at Slough Council, which closed its ALMO in 2010, tenant satisfaction has fallen from 77% in 2014/15 – the earliest year with data on record – to 59% in 2017/18.
Re-let times and voids have also increased among the council’s stock in the past two years, while HRA deficits of £5.36m in 2016/17 and £5.87m in 2017/18 were recorded.
Wigan Council promised £5.5m in HRA savings over four years after closing its ALMO in 2017 – but its HRA surplus dropped from £6.89m to £3.67m ignoring stock revaluations in the first year, with spending on “supervision and management” increasing from £16.8m to £19.2m.
Among councils providing data for re-let times, six have seen increases since closing their ALMOs, while turnaround improved for two and stayed relatively unchanged for three.
For voids, five saw increases, three saw reductions and two recorded no significant change.
In 2009, 69 ALMOs managed half of England’s council homes, but 31 now remain managing about 338,000 homes.
A total of 28 councils have closed down their ALMOs, while nine have become stock transfer housing associations.
The most high-profile ALMO to be taken back in house was Kensington and Chelsea Management Organisation, which was legally constituted as an ALMO despite its description as a tenant management organisation.
The company has been castigated for alleged failures in the build-up to the devastating fire at Grenfell Tower and now exists only as a shell company for the purposes of ongoing legal proceedings.
“ALMO management arrangements are still subject to regular reviews and the current trend has seen a number of councils bringing their housing function back in house,” a spokesperson for the Councils with ALMOs Group said.
“The tragic events at Grenfell and the publication of the Social Housing Green Paper highlight the importance of effective collaboration between the council and its ALMO as the housing policy and the local government landscape changes.
“There is an ongoing need to strengthen the synergy between the functions of the council and organisations that deliver their housing management, be this with existing ALMOs or creating new ones to ensure this happens.
“At the heart of decisions around the future of ALMOs is the need to ensure that council tenants continue to receive an effective and efficient service, within a viable HRA business plan, that meets their priorities for the homes and neighbourhoods they live in.”