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East Midlands council scraps ALMO
Nottingham City Council will directly manage its council housing again after winding up its management arm.
The city’s councillors first confirmed that they would take steps to close its ALMO, Nottingham City Homes (NCH), in May last year, after it was revealed that cash from the Housing Revenue Account (HRA) had been wrongly spent, taking the total up to £40m.
The £25.7m misspend comes on top of the more than £14m the council was found to have unlawfully transferred from its HRA to its general fund between 2014 and 2021.
In December 2021, it emerged that NCH transferred £15.8m, which was later revised down to £14.4m, to the council general fund over a period of six years.
At the time, the ALMO said that this was done under the council’s instruction.
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Additional reporting by Inside Housing in January this year revealed that the figure had risen to £51m due to inflation and additional incorrect charges.
HRA funding is strictly ringfenced for transactions related to council housing functions.
The activity was discovered more than a year after the government launched a non-statutory review into the council’s financial affairs after it was found to be £1bn in debt.
The government published its latest Improvement and Assurance Board (IAB) report into the council following the launch of the review earlier this month.
Under companies, it states: “Nottingham City Homes have progressed quite well although issues remain with NCH subsidiaries.”
Asked to explain what those issues were, the council confirmed that the ALMO was scrapped as of 31 March this year and the management of housing stock returned to direct council delivery.
A spokesperson added: “NCH Ltd owns assets in its own right and has two subsidiary companies that also own assets. These were all developed in conjunction with council strategies and provision of loans, grants and Section 106 monies.
“The IAB report is referring to discussions around the future of these assets, the discharge of the loans and a process to ensure the proper duties and responsibilities of the council and three boards of governance are discharged.
“The services provided by the three companies continue to be delivered effectively.”
In its conclusion to its latest IAB report, the government said: “The council has made progress in a number of areas in terms of improvement and recovery but there has been a distinct lack of urgency in tackling the necessary change. Recent months have seen some increase in momentum but the pace of improvement must be accelerated.
“The issues highlighted in this report relating to governance, finance, companies, transformation workforce illustrate a need to grasp the importance of delivering fundamental change in a timely fashion. The independent board members have now issued instructions to seek early resolution of these problems, the results of which will be contained in the next quarterly report.”
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