26 April 2002
Mike Wilkinson, joint head of the arm's-length management organisation (Almo) branch at the Department for Transport, Local Government and the Regions, told a housing conference in London on April 18 that this was one option being considered as the government seeks to relax local authority borrowing restrictions.
'Rent restructuring is going to give some local authorities increased rent income,' he said. 'There's scope for that income to be used to support more borrowing.'
It had been expected that councils that raise more money would lose it into the housing subsidy system. Retaining some of it, he said, would constitute 'extra government expenditure'.
Thirteen councils have expressed interest in setting up second-round Almos, which also enable extra borrowing, but they may now wait before submitting a proposal.
'The Spending Review is looking at ways of building on the interest in this initiative,' added Wilkinson.
The first eight Almos, which got under way this month, could soak up £300m of the £460m set aside so far – but only if they achieve a three-star rating from the Housing Inspectorate. If they remain on two stars, they get half the sum promised to them.
To date, no housing department has achieved three stars.
PFapr2002
