ALMOs – The Right Option For Your Housing Stock?A presentation by Gary Ekpenyoung, Solicitor13th September 2006

Agenda• Background – Decent Homes• Options For Local Authorities• Relationship between Local Authority and ALMO• Financing of the ALMO• The Future of ALMOs• Questions?

Background

• Decent Homes – “ By 2010, bring all social housing into a decent condition with most of this improvement taking place in deprived areas and, for vulnerable households in the private sector, including families with children, increase the proportion who live in homes that are in a decent condition” The Governments Spending Review 2004

Background

• A decent home is one which is wind and watertight, warm and has modern facilities

• The Government are keen on making Homes Decent because:

a. Enhance Reputation of Areab. Increase popularity of run down areasc. Improve sustainability of Community

Sounds Good On Paper But How Are Local Authorities To Meet The Decent Homes Standard in Practice?

The Option Appraisal

• Government encourages local authorities to consult tenants

• Tenants should be actively encouraged to get involved

Options For Local Authority1. Retention2. Housing Transfer3. Arms Length Management Organisation4. Private Finance Initiative

Retention

• No additional funds to meet Decent Homes Standard

• Could be appropriate when housing stock is already in a good condition

• Council unable to borrow money from lending institutions to assist with regeneration

Housing Stock Transfer

• Council transfers its housing stock to a Registered Social Landlord (RSL)

• RSLs are registered with and regulated by the Housing Corporation

• For the Transfer to take place, tenants must be balloted and a majority must not oppose the transfer

• The tenants landlord will be the RSL

Housing Stock Transfer

• Following transfer – tenants become Assured tenants of the RSL

• RSL can borrow from banks and building societies to buy and invest in the housing stock to bring it up to Decent Homes Standard

• Preserved Right to Buy• Right to Acquire

Arms Length Management Organisation• Company set up by local authority• Almos are eligible for additional funding

from Government• Tenant participation is vital• Ownership of the housing stock remains

with the local authority• Local authority remains landlord• Tenant remains secure tenant

Housing Private Finance

• Central government provides financial support for partnerships between public and private sectors

• Projects deliver refurbishment of existing social housing and associated services

• Must comply with complex PFI procurement process

• Tenants remain secure tenants of local authority

• Not universally popular

Relationship between local authority and its ALMO • The Management Agreement – sets out

the obligations of both parties• Typically the Almo takes over the

responsibility for the following:-i. stock investment decisions and repairs

orderingii. rent collection, dealing with arrearsiii. direct liaison with tenantsiv. promoting tenant participation

Relationship between local authority and its ALMOV. enforcement of tenancy conditionsVI. Similar functions for leaseholdersVII. Managing lettings, voids and under-

occupationVIII.Estate management, caretaking and

housing related support services

Relationship between local authority and its ALMOThe local authority may retain the following

functions:-i. overall housing strategyii. homelessness responsibilitiesiii. lettings policy, in consultation with Almoiv. general housing advicev. policy on tackling anti-social behaviourvi. Owner-occupation strategies including

determination of eligibility for right to buy

Relationship between local authority and its ALMOvii. housing benefit/rent rebate administrationviii.determining minimum standards and

monitoring performance of the ALMO

Financing of ALMOs

• ALMOs will have access to the same funding as local authority housing

• In addition government has made available additional funding

• To qualify ALMO must receive a “good” or an “excellent” rating when they are assessed by the Audit Commission’s Housing Inspectorate

• Housing Inspectorate make a detailed assessment of all services provided by the ALMO

The Future of ALMOs

• Management Contracts are only temporary• After 2010? Uncertain future• No proposals for additional funding after

2008• Unlikely that any new ALMOs can be

created• Government’s intentions are unknown

Questions?