By Neil Merrick
Council-owned housing companies have called on ministers to let them borrow money without government controls.
Council-owned housing companies have called on ministers to let them borrow money without government controls.In a report on the future of arm’s-length management organisations, the National Federation of Almos said it was crucial that they had freedom to borrow from private lenders to build homes and improve existing ones.
Around 20 of the 69 Almos set up by English local authorities have already brought their homes up to the decent homes standard. At least three councils are considering ballots of tenants so they can transfer the stock to a housing association and enjoy more financial flexibility.
But the NFA argued that Almos had a future in their own right if money they borrowed did not count as public sector debt. They would, however, need to show that their work involved some risk and their parent council no longer controlled board decisions.
A future for Almos, published on April 2, argued that there were advantages to councils in having Almos outside the public sector, especially if council housing became self-financing and authorities retained all their rent income. But the report warned that Almos must be ‘careful about taking on too much development risk’.
Gwyneth Taylor, policy officer at the NFA, said homes that were improved to meet the decent homes standard required further investment. ‘Whether that comes from the public or private sector is the big question,’ she added.
The Association of Retained Council Housing, which represents councils with traditional housing departments, has meanwhile backed radical changes to housing finance. In its response to a government review, which is to be published soon, Arch said local authorities should be allowed to keep all the money they raise in rents rather than it being pooled and redistributed through the national housing revenue account.
Arch spokesman Brian Reilly, deputy director of housing at the London Borough of Wandsworth, said he was more optimistic of change than in the past. ‘This is the only time I’ve felt that serious consideration has been given to what needs to be done,’ he told Public Finance.
