Record ALMO demand will leave councils disappointed

The third arm's-length management organisation bidding round looks set to be the largest so far, raising fears that local authorities may be forced to scale down their bids or opt for partial ALMOs.

At least 12 councils – including large stockholders such as Sheffield, Southwark, Nottingham and Newcastle – were expected to file expressions of interest with the community housing taskforce by today's deadline (left).

Between them, the 12 councils own more than 280,000 homes – roughly 60,000 more than were involved in the second round – and will be competing for a smaller pot of money than in rounds one and two. Housing professionals have suggested that, as a result, the selection process will be more rigorous.

Mike Wilkinson, ALMO policy manager at the Office of the Deputy Prime Minister, said the list obtained by Housing Today was accurate. He added: "We are expecting a total of 30-40 councils to come forward for rounds three and four. We've always said competition for places is going to be tough and one mustn't assume that all bids will be whole-stock ALMOs." He said it was too early to say if the cash for round three would be concentrated or spread over a number of authorities, but pointed out that in round two, "ministers took the decision to spread the jam thinly".

Nigel Minto, project manager at the National Housing Federation, said the high demand might force some councils to reconsider. "Over the summer, once housing staff have had time to digest the implication of ALMO and stock transfer guidance, they may have to look again at their choice," he said.

This time round, it is also likely that the councils hoping to take part will include those with relatively poor housing management records. A two-star Audit Commission rating is required to draw draw down allocations from the £700m set aside for rounds three and four but Chester-le-Street and Dover, both of whom scored no-star ratings, are among the councils expected to submit expressions of interest.

Those accepted on the programme will have until May 2004 to win a two-star rating. But at a seminar in London last Thursday, prospective ALMOs were warned that a place on the bidding round would not guarantee two stars.