Report backs ALMOs’ demand for financial freedoms

Arm’s-length management organisations could be a step closer to gaining financial freedoms if the government accepts new recommendations from the first comprehensive survey of ALMOs and councils.

The suggestions are based on a study commissioned by the National Federation of ALMOs and written by Rachel Terry, an independent consultant, John Perry, policy adviser to the Chartered Institute of Housing and Ian Doolittle, a partner at law firm Trowers and Hamlins.

The study, currently being considered by the government’s ALMO review – which is due to report in the spring – makes three main recommendations. It says ALMOs should:

• have their debt written off by government in exchange for not receiving money from government (as is the case for stock transfer housing associations)
• be responsible for collecting and spending rents and surpluses
• have greater freedom to borrow money

At present, the benefits of setting up an ALMO are restricted to the extra funding they are given to meet the decent homes standard. The researchers say the three-point plan will help ensure a future for ALMOs once they meet the decent homes standard. This is given urgency because a number of ALMOs will meet the standard well before the 2010 deadline.

Perry said: “Government must take a ‘big picture’ view, not make marginal changes with little impact on ALMOs’ long-term future.”

Joe Logan, head of housing management services at ALMO Poole Housing Partnership, said: “The small objective for ALMOs is to meet decent homes, but the big objective is to build sustainable communities. This would be the natural next step in achieving that.”

The three ideas have been floated before but were not taken up by government. Gwyneth Taylor, policy officer at the National Federation of ALMOs, said: “We recognise there’s a lot of convincing of government and councils to do, but hopefully this will start a proper debate.”

Alan Walter from Defend Council Housing opposed the proposed freedoms. He said: “They vindicate our view that ALMOs are a two-stage privatisation. If debt can be written off for ALMOs, why not for all councils?”