His department stressed that he is not proposing an ALMO. An ALMO transfers a council's housing management, but Chester-le-Street's version would hand over just the council's housing strategy role to a local organisation. The system distances strategic and landlord services from the rest of the council.
The deal was hammered out at a meeting with council leaders, senior officers and a tenants' representative just before Christmas.
McNulty predicts the company will be set up "within months". The first step will be to set up an expert housing advisory board to run the company.
The independent chair and two others will be nominated by the government.
It is understood the appointment of new head of the council's housing department, Linda Ebbatson, was a decisive factor in avoiding the first-ever takeover of a housing service.
Ebbatson admitted "errors of judgment and poor service" had brought the damning inspection results and welcomed the "genuine assistance" from central government.
Insiders say McNulty opted to put housing at arm's length from the council amid concerns over finance and governance. The Audit Commission reports – one in 2001 and another in November 2002 – highlighted problems with "the effectiveness of strategic planning, management of rent arrears and debt, services to homeless people and its repairs service", McNulty said.
The Chartered Institute of Housing welcomed the deal as a possible way forward for other struggling councils. CIH policy officer Merron Simpson said: "A range of approaches could be adopted to improve poorly performing services, including peer reviews, mentoring and departments for restructuring.
"We would be interested to see how these new governance arrangements will work in practice and whether performance will improve as a result."
Source
Housing Today
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