3 March 2021
In defence of ALMOs
Maria Murphy
Managing Director, Derby Homes
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DO ALMOS matter much these days? At the turn of the millennium they were all the rage, separating council house management from day-to-day local authority work without taking significant assets out of public ownership. And, of course, pulling in much-needed Decent Homes cash from central government.
There were once close to 70 ALMOs across England. Now there are fewer than 30.
Yet the COVID crisis has exposed some worrying fault lines in our social fabric, one of which is our national failure to deal with a skewed culture of housing tenure that puts a decent, affordable home beyond the reach of too many – and too many of them are the key workers who are getting us through this crisis.
Though we have yet to see the full, brutal economic impact of the pandemic, we know it will inevitably play out in culled jobs, rent and mortgage arrears, and rising homelessness. Those troubles will be magnified by an acute decade-long housing shortage currently running at about 1m homes fewer than our population actually needs.
Against this backdrop, I want to argue strongly that we should not casually allow the ALMO model to wither away. There is a wealth of evidence to demonstrate that, used well, it can and will be a key tool for the councils that still have one, when they need to respond quickly and effectively to the coming housing and social care emergency.
The latest annual survey from the National Federation of ALMOs, published today [Tues 23 Feb 2021], and figures due out this week from my own ALMO, Derby Homes, show that ALMOs perform particularly well when they are the catalyst for collaboration across sectors and between a wide range of organisations, able to come up with sustainable solutions to issues such as rough sleeping, homelessness, employability, debt and poor health.
Just a few examples that bear witness to this: a cross-agency partnership with police and mental health services that is transforming the way youth offending is dealt with (Cheltenham); a ground-breaking support programme for care leavers, traditionally a group at exceptionally high risk of homelessness (Blackpool); and international recognition for the promise of a council and its ALMO to end homelessness by 2030 (Newcastle-upon-Tyne).
The pandemic has shown clearly what flexible and fast-moving local authority partners we are. We were uniquely well-placed during each lockdown to get support in place fast. ALMO staff transferred to community hubs where they co-ordinated or worked in emergency food provision. They made thousands of wellbeing calls. They were integral to local authority resilience planning, and – because of their unique link to the councils that have a statutory duty to the homeless – were able to smoothly deliver Everyone In and Protect programmes. Here in Derby, our staff even became a reassuring presence at cemeteries and crematoriums.
The key factor in an ALMO’s success is the quality of its relationship with its parent council.
Of course, we can’t get away from the fact that ALMOs have sometimes failed as housing managers but the same failings have been seen in local authorities, in housing associations and the private sector. Process and systems can and do fall down in all types of organisation, but there’s no inherent fault in the ALMO model itself. The evidence is quite clear: the key factor in an ALMO’s success is the quality of its relationship with its parent council.
It frustrates me hugely that when an ALMO is closed, someone somewhere will cite impressively large numbers to explain why this is the sensible decision. I have yet to see any hard evidence that these savings have ever been delivered, or that housing management and standards and, crucially, resident support services – where ALMOs excel – have been maintained at exactly the same level for less money.
Why does this matter? In a post-COVID world, we will certainly find out. In a threadbare economy with national and local government counting every penny, joined-up working will be needed like never before. No ALMO should be thrown back into the pot for a short-term financial win. The long-term costs will far outweigh any benefits.
This is the thing: there is nothing partisan about an ALMO. Across my [X] years in housing, I have heard arguments against and for from every point on the ideological spectrum. Here, where we work with a Conservative-led council, I can truthfully say that the relationship between Derby Homes and its parent is the most positive it has ever been.
There is a real recognition in this city that we are all better working together. Our culture is cross-sector and all about partnership and positive outcomes, and I believe the ALMO model has played a crucial part in nurturing that spirit of collaboration over the last decade.
We could not, for instance, have delivered our remarkable success in reducing homelessness and rough sleeping in the city, or sustained that success, without our partners and our ALMO. We expect that when our latest figures are published later this week [25 February], the number of rough sleepers in Derby will be in single figures.
As an independent business, our board can approve the use of our surplus against any housing-related services; in our case, we contribute well over £2m a year to wider city initiatives. A key area is our part in supporting vulnerable individuals who are homeless or at risk of losing their home. Because we’re close to our partners in health and law enforcement, we know this is money well-spent, achieving positive outcomes and providing hope for these individuals as well as significantly reducing the burden on other parts of the public budget.
Our sector is already delivering the Social Housing White Paper’s promise of more tenant engagement; today just under a third of ALMO board members are tenants or leaseholders. We still await a new Building Safety Bill, but ALMOs are already on the case; three – Lewisham Homes, Stockport Homes and Your Homes Newcastle – were among the five social housing providers recognised by Inside Housing’s recent Resident Safety Campaign.
Successes like this are repeated quietly, daily, across the ALMO sector. Nobody does it better when we’re allowed to do it well. Indeed, we should be creating more ALMOs, not closing them down.
This article first appeared on the Inside Housing website on 23 February 2021. The latest NFA Annual Survey, detailing ALMO sector achievemnts, is available at https://is.gd/5GbzR
The 95% mortgage plan will require the government to underwrite higher risk mortgages – a product that has all but disappeared from the market – by allowing lenders to purchase a guarantee from the government to cover some of their potential losses.
It looks like the Help to Buy mortgage guarantee that was introduced in 2013. If it takes off, like Help to Buy, it will just result in more money being pumped into the demand side of the market without any corresponding increase in supply – ergo prices will rise to the benefit of no one other than the housebuilders and their shareholders.
It always amazes me that the Conservative Party and their ministers, supposedly the party of free enterprise and market forces, seem to have so little understanding of how the housing market works (the UK’s housing stock is worth more than £7.4trn and in recent years has been growing by £750bn a year – it is the biggest market of all).
Everyone who works in housing knows that housing supply is inelastic – it does not respond quickly to changes in demand. In fact, it can take up to ten years from conception to completion for some housing projects (even MMC would take at least a year) and housebuilders will always try to release their homes in a trickle rather than a deluge.
That means if you increase the demand for homes by making it easier to buy, prices can only go up, because the stock is fixed. It is simple economics and yet our ruling party do not seem to understand it.
So, intervening in the housing market only causes more pain for first time buyers in the long run. The only intervention that makes sense is to invest in genuine social housing. That takes out whole swathes of people living reluctantly in the private rented sector and others who might have had no option but to buy.
Over the long term that leads to a reduction in PRS rents and a slow and steady fall in house prices. That allows more first-timers to buy and it means more pounds in pockets to spend on the wider economy.
Everyone benefits, but making the government understand this simple logic is the hardest task we face.
The government’s slogan is “Build Back Better”. “Build Back Badly” more like.
This article was first published on the HQN blog, available here.
