Leeds: an ALMO drama

one year after Leeds City Council set up six arm's-length management organisations, four have yet to win the two-star rating needed to begin drawing down the first portion of desperately needed government money.

With 67,000 homes still in council hands, it may look like a crisis but there are good things happening in Leeds, too. It has transformed from a declining industrial wreck to a beacon of style and a major financial centre within 10 years. Meanwhile, the advent of the Communities Plan has made the council optimistic about the Audit Commission's reinspection of the ALMOs in June and August.

"I don't think there's any reason why any of them shouldn't get there," says Richard Lewis, cabinet member for housing at the council, adding that all six were rated as having excellent prospects for improvement. "If we can't work from that point, given an action plan, then I don't have to tell you we've got a big problem."

Lewis believes the Communities Plan will make a big difference. "For the first time we're talking about significant investment in housing in a way we haven't had for years," he says. "Things are really starting to buzz, there's a sense of palpable change."

For Lewis, the ALMOs were simply inspected too soon. Steve Hunt, chief executive of ALMO Leeds East Homes, agrees. "In hindsight it was a mistake to go for inspection as soon as possible. We weren't quite ready," he says.

Quality issues
Leeds' council homes have huge quality problems and in the private sector, there are pockets of low demand exacerbated by antisocial behaviour and affordability problems in the wealthy town centre. The city split its housing service into six ALMOs in February 2003, a move for which tenants voted six-to-one in favour.

When the Audit Commission inspected the six ALMOs that summer, four of them only received one star, meaning they could not draw down the first portion of the £350m of promised government money. Only Leeds North-east Homes and Leeds West Homes secured the requisite two stars, freeing up £28.8m.

The commission has admitted mistakes in how it inspected Leeds and revised how it deals with authorities with multiple ALMOs. It has also appointed link officers to each ALMO to act as a "critical friend" until the inspections in the summer – a first for any ALMO.

But there is no escaping criticism of the ALMOs over delays in responding to tenants' queries, problems with repair services and failures in how they procured government services.

Neil Evans, acting director of neighbourhoods and housing at Leeds council, insists that the ALMOs, each with their own chief executives, boards and bureaucracies, will give a much better service for tenants. "The benefit … is a shrink in focus," he says. "The nature of the East Leeds ALMO is very different in many ways to the council. It's suited the Leeds agenda."

And the council's decision to fund a housing market renewal coordinator also demonstrates its ability to look more strategically at housing markets since losing its housing management function.

Lewis wants this to continue. "There are clearly opportunities to build when it comes to the clearance areas," he says.

"What I got really annoyed with in previous years was that our only answer to this was a housing association. I think we're as capable as anybody else of doing new development. It's not beyond the ALMO; I would like to see that happening in time."

Whether it does will depend on the Audit Commission's view this summer, though. Whatever happens, Evans says the ALMOs are here to stay. "It's hard to envisage us going back, taking things back into the department. We have to acknowledge where we've got to."