29 October 2004
Doubts have been raised over the popularity of council-owned housing companies after a London borough ditched its proposals in favour of prudential borrowing.
The London Borough of Harrow, which was about to raise £11.8m through an arm's-length management organisation, will confirm next month that instead it is borrowing £40m using the new prudential code.
Until recently, Almos have been the only way for councils to raise large sums to meet the decent homes standard without transferring their stock to a housing association.
But prudential borrowing, which has been available since April, provides an alternative that does not involve going through the lengthy legal process of setting up an Almo.
Keith Burchill, Harrow's Cabinet member for planning and housing, said: 'The cost of running the Almo would have been more than the amount of grant received.'
Harrow owns 5,200 homes – fewer than most councils with Almos. By using prudential borrowing, added Burchill, the authority would be able to improve the environment on estates as well as providing decent homes.
Other councils planning to use prudential borrowing for housing include Birmingham and Woking.
Gwyneth Taylor, policy officer at the National Federation of Almos, said it was up to each council to decide on the best option, although it was doubtful that large urban councils could afford to borrow what they needed using the prudential route.
Sarah Webb, director of policy at the Chartered Institute of Housing, said the Almo programme remained popular. 'A few people dropping out will mean that it is less over-subscribed,' she added.
PFoct2004
