ALMO campaign steps up calls for freedoms

Arm’s-length management organisations are stepping up their effort to gain greater financial freedoms.

The National Federation of ALMOs, working with the Chartered Institute of Housing, will this month launch a project to test the consequences of more autonomy.

The federation has been asking the government for extra freedoms, such as the right to borrow money and to have greater control over revenues from right-to-buy sales of ALMO homes, since February 2003.

Both these requests will be simulated in computer models to assess the effect that they would have on ALMOs’ finances.

The intention is to prove to the government that the benefits of giving ALMOs more freedoms far outweigh the drawbacks.

Gwyneth Taylor, policy officer at the National Federation of ALMOs, said: “The project will help to develop ideas on what freedoms could be granted to ALMOs. By the end of the year, we should have concrete data on the effects of the freedoms and recommendations will be fleshed out from there.”

Taylor added it was important that ALMOs were freed from constraints “in order to encourage them to improve performance”.

At present the benefits of setting up an ALMO are restricted to the extra funding they are given to meet the decent homes standard.

A government paper proposing to allow three-star ALMOs to borrow money against their rental income was anticipated last summer. However, solid proposals have failed to materialise and the Treasury is thought to have abandoned the idea because it fears ALMOs would take up the lion’s share of borrowing available to councils.

The National Federation of ALMOs is due to report the findings of a separate study into ALMO funding to the ODPM this week.

The government asked the body to study the implications of providing ALMOs with capital rather than revenue funding. The federation does not intend to make its findings public.