Almos start to reconsider their contracts

12 May 05
Council-owned housing companies are reviewing their contracts with their parent local authorities as part of a drive to achieve better value for money.

13 May 2005

Council-owned housing companies are reviewing their contracts with their parent local authorities as part of a drive to achieve better value for money.

Audit Commission inspectors have told arm's-length management organisations that they should not assume their council is the most efficient provider of legal and financial services, human resources management and information technology.

Gwyneth Taylor, policy officer at the National Federation of Almos, said an increasing number of more established Almos were studying the service level agreements they had initially signed.

Although she expected most of them to stay with the council, it was possible that some could turn to new providers, or that smaller Almos could team up and negotiate better deals with a single local authority.

Others might even use the threat to outsource as a means of getting a better deal from their council.

'It's a delicate balance,' she said. 'Almos don't want to jeopardise their relationship with the local authority, but they also need to demonstrate to inspectors that they are getting value for money.'

CityWest Homes, which manages housing for Westminster Council, took finance, HR and some IT in-house when it was set up three years ago.

Janet Collier, CityWest's director of finance, said: 'It is important to discuss these things and come to a mutual decision that suits both sides.'

A total of 49 Almos already manage almost 750,000 homes. Once those in the fourth-round programme are up and running later this year, the organisations will run more than half of all council homes in England.

Two Almos in the East Midlands, A1 Housing and Newark and Sherwood Homes, have saved money through joint procurement.

Housing associations can achieve economies of scale through joint procurement and service partnerships, the Chartered Institute of Housing said this week.

Right First Time, published on May 10, also urged registered social landlords to look at long-term partnering and supply chain integration between themselves and contractors.

Andrew Dench, head of regulation policy at the Housing Corporation,

which funded the study, said boards and managers of associations that had not already 'taken a hard look' at their repairs service should try to match those already making savings.

 

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