The decision, predicted in Housing Today (7 May, page 7), was confirmed by Ed Balls, chief economic adviser to the Treasury, in a speech on Tuesday at the Chartered Institute of Housing conference in Harrogate.
High-performing ALMOs had hoped to be given the freedom to borrow against their rental income and spend the money on development. But Balls said: "All the money counts on the public sector balance sheet and there's no way we can get round that."
This is a clear indication that the Treasury will refuse to allow ALMOs to borrow in the same way as housing associations, whose debts are not shown on the public books.
The Treasury is also unlikely to let ALMOs apply for grant from the Housing Corporation's annual development programme, which had been mooted as an option.
This is because associations have to borrow money to top up schemes built with corporation funding and ALMOs will not be able to do this.
Hugh Broadbent, chief executive of Oldham's ALMO, First Choice Homes, said: "It's a shame and it raises some doubts about the future of ALMOs, because we want to do more than just refurbish the stock," he said.
"The question is, where do you go now? There's still an opportunity to borrow through getting the parent council to do prudential borrowing – but that's not what we want to do.
"It would make us even more dependent on them."
However, Balls confirmed that social housing can look forward to increased funding in this summer's comprehensive spending review. He said: "There will be a good settlement for housing and housing capital and we will stick to it for 2006-2008.
"The comprehensive spending review is committed to making a start on the significant increase in social housing that Kate Barker called for [in her report for the Treasury on housing supply]. Achieving this will require everyone to play their part."
Source
Housing Today
No comments yet