Wednesday, 14 September 2011

Cabinet votes for major housing change

The new structure for council housing in Cornwall got the go ahead from the Council's Cabinet this morning. It means that council housing will be transferred to an 'arms length management organisation' - a private company which will do the job previously done by the authority itself. The new company will collect rents, manage repairs and run the HomeChoice allocations service.

In Cornwall, there are council houses in the former North Cornwall and Caradon areas and an existing ALMO in the former Carrick. That organisation (Carrick Housing) is a three star business which is recognised as having done a great job for tenants there.

The ALMO may be a private company, but the organisation will be limited by a set of restrictions which mean that tenants themselves will see virtually no change. The organisation will be run by a board of 6 tenant reps, 6 councillors and 6 independent people brought in for their specific expertise.

The process of changing to an ALMO has involved lots of consultation with the tenants reps and door knocking exercises on many housing estates. I regret that there won't be a formal ballot for all tenants, but I have no doubt that, if there were, the majority of those who vote would back the change.

This isn't going to be a major change for most residents (most won't notice the difference) but it is a step in the direction of seeking to provide a better service to the tenants of Cornwall.

1 comment:

JonnyatSea said...

Arms Length Management Organisations were thought up in 2000 as the government's strategy for two-stage privatisation.
Democratic control is lost with the management of our homes moved into a separate private company; and tenants' power is undermined by a board on which tenant reps are outvoted and bound by corporate responsibility. £millions is wasted on consultants, lawyers and other set up costs, new offices and big new salaries for top managers.

In 2004 the government started a review of ALMOs' future, which confirmed predictions that ALMOs are simply a short term attempt to get round tenants opposition to stock transfer into private hands.

I Quote: "Arm’s-length management organisations could take over ownership of council homes by 2006 under radical new proposals drawn up by the Office of the Deputy Prime Minister" (Inside Housing 03/09/04).

This was proved correct with some councils completly selling off their housing stock after softening up tennanst and the press and the public with the ALMO. Due to the loss of democratic control there was nothing people could do about this.

The National Federation of ALMOs (and it might be interesting to find out if any lobbying from this organisation and it's members has been going on at County Hall) produced a paper called ALMOs: A New Future for Council Housing
This proposed that ALMOs get a 35 year contract so that the ALMO company can be transferred into the private sector and borrow on the private market.
Crucially, this means "funder's control" of ALMOs by banks and building societies.

Since then, a 2006 European Court of Justice ruling ('Parking Brixen') made it clear that this type of ALMO would be subject to competition rules - any council attempting to transfer its ALMO into the private sector would have to offer up the management of homes to any private company from anywhere in Europe.

Big Jim's Dodgy Homes Co based in a tax haven that put in the lowest bid would then become a shoe-in, regardless of how well a local management team was doing.

In some authorities tenants have seen big sums spent on expensive set up costs but the ALMO hasn't yet been given access to additional funding. In others the promised improvements have been scaled back and promises to tenants broken.


To protect residents you should be making surethe council is considering all the options for housing management, including setting up an in-house management committee, which gives tenants a bigger role in decision-making, but is easier to set up, cheaper to run, and more democratic than an ALMO. And, crucially, it avoids the risks of two-stage privatisation.

There should be a full debate so that tenants can hear all the arguments before making a decision. I am stunned that a councillor that seems keen on openness and transparency would be condoning the first step to privatisation of council homes and read with horror your throw away comment on how most tennants would be fine with this non-democratic, backward and very very expensive idea, despite not asking them.