03 March 2006
Councils that manage their own homes are urging the government not to exclude them from long-awaited changes to the housing finance system.
Last year the Audit Commission warned that the subsidy system, by which money raised through rents is redistributed among local authorities, urgently needs reform.
More than 80% of councils pay more into the system than they receive and would be better off without it.
But speaking this week at a conference on decent homes, Neil McDonald, director of housing at the Office of the Deputy Prime Minister, indicated that any changes will be limited to high-performing arm's-length management organisations.
Ninety-eight councils have told the ODPM they can meet the decent homes target without setting up an Almo or transferring their stock to a housing association.
Bernie Brannan, director of housing at Swindon Borough Council, said it was unfair to other authorities to focus on Almos, many of which are net gainers from the subsidy system.
While Swindon expects to bring its homes up to standard by 2008, it subsidises other councils by £13m per year. 'They should make the system fairer and sort it out,' he told the Capita-run conference in London on February 28.
Almos might leave the subsidy system and become self-financing as part of a government review. But the Treasury would fund such a change only if Almos could demonstrate that they were making a long-term contribution to sustainable communities.
'It's not about subsidising an Almo's management structure so they enjoy freedom from close local authority supervision,' said McDonald.
A new Association of Retained Council Housing, made up of councils such as Swindon, will be launched in the next few months.
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