07 November 2003
London councils that have or plan to set up arm's-length companies to manage their housing stand to lose more than £167m per year because of cuts in government management and maintenance allowances.
The Office of the Deputy Prime Minister is proposing to change the way that allowances are calculated from 2004/05. This will lead to funds being switched to councils in the north with more street-level homes and less money going to local authorities with large numbers of high-rise blocks.
With 11 London authorities already operating or proposing to set up arm's-length management organisations, the changes could also have a major impact on the Almo programme. Camden, with 25,800 properties, stands to lose £18.7m or £725 per home while Westminster, which has 13,300, will lose £12.3m or £925 per home.
Not all will be as badly hit. Hounslow, with 14,500 properties, will only be £362,500 worse off – equivalent to £25 per home. But all face the prospect of rewriting business plans.
Chris Langstaff, managing director of Hounslow Homes and spokesman for the London Almo group, accused the ODPM of altering the rules after local authorities had committed themselves to operating as Almos. 'London Almos have made commitments to residents that can no longer be honoured and are faced with cuts in services,' he said. At the very least, he asked that the changes be put off until 2005/06 and transitional protection provided over a longer period.
Gwyneth Taylor, policy officer at the National Federation of Almos, said the new formula did not take into account the cost of managing high-density estates. A proposal to base allowances partly on crime levels was also flawed, she added, because it did not reward councils with effective crime prevention programmes.
According to the Chartered Institute of Housing, Almos should be assessed separately for management and maintenance funds rather than included in the same formula as authorities with traditional housing departments.
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