28 March 2003
New companies set up by high-performing councils to manage their housing are enjoying a cash windfall from the government.
Twelve months after the first eight arm's-length management organisations (Almos) began operating, each is receiving more money than it needs to cover the cost of bringing homes up to standard.
The Almos were given permission to borrow £300m after all received two or more stars from inspectors.
Borrowing is funded by the Office of the Deputy Prime Minister through extra subsidy, which is paid to the Almos at a fixed interest rate of 10%.
Providing market interest rates remain below this figure, the Almos – which operate as non-profit making companies – will be better off than councils that manage their stock through a traditional housing department.
Derby Homes, which will eventually borrow £81m to bring 7,000 properties up to the decent homes standard by 2006, calculates that it is receiving £1m per year more than it needs to pay off an initial loan of £31m.
Ashfield Homes, in nearby Nottinghamshire, is borrowing £46m to improve 5,000 homes. Chief executive Ian Dethick said he understood that the 10% subsidy would last indefinitely.
According to the National Federation of Almos, which was launched this week, it was made clear at the outset that the first Almos would receive subsidy at 10% – along with the 13 Almos that will be inspected later this year under round two of the programme.
PFmar2003
