Pull your finger out to stop ALMOs dying, government told

The ODPM has been warned that failure to give arm’s-length management organisations greater financial freedoms could result in their demise.

The comments followed the launch of a paper on the future of ALMOs at the National Federation of ALMOs’ annual conference in York on Wednesday.

The paper outlined four options to give the 49 existing ALMOs more room to manoeuvre financially than the current housing revenue account system allows them. ALMOs could then diversify, forging an alternative role after meeting the 2010 decent homes target.

John Perry, policy adviser at the Chartered Institute of Housing and one of the paper’s authors, said: “If the government doesn’t get a move on saying what the possibilities will be for the future, ALMO contracts with councils will start to reach an end in 2007. The government needs to make the financial changes we suggest or it is quite likely that ALMOs will come to an end.”

Each option would require debt built up in the housing revenue account – which can reach tens of millions of pounds – to be written off by the government or restructured allowing ALMOs to be financed just from rental income.

The four options would require the housing revenue account to be:

• controlled by a council and contain sufficient funds to ensure homes stay decent
• controlled by a council and have funds to exceed the decency standard and for other community work
• managed by an ALMO, which would have greater control over revenue raised within public sector borrowing controls
• managed by an ALMO no longer majority owned by the council. Tenants would stay secure council tenants and the ALMO could borrow from the private sector.

The final option is preferred by ALMO bosses and it is understood the government is warming to the idea of reforming the housing revenue account. The ODPM is likely to include this fourth option in its consultation on ALMOs, which is expected in July if Labour is re-elected.