Arms Length Management Organisations are the government's strategy for two-stage privatisation. Democratic control is lost with the management of our homes moved into a separate private company; and tenants' power is undermined by a board on which tenant reps are outvoted and bound by corporate responsibility. £millions is wasted on consultants, lawyers and other set up costs, new offices and big new salaries for top managers.
This government wants to privatise council housing - ALMOs are a key part of their strategy
ALMOs involve the council setting up a private company to manage its homes. The council still owns the housing stock, and the government hoped that this would divide the opposition. The second stage will be easier to achieve once tenants have been split up and get used to a new company running their homes.
The second stage - privatisation - is already happening in some areas. Westminster ALMO ran out of money after only 2 years and the tenants on two large estates were told their homes must be sold off if they want the promised improvements. In Hillingdon, now managed by an ALMO, 500 empty homes are being sold off without a ballot in a process known as "trickle transfer". Other ALMOs are already looking at contracting out services and demolishing estates.
What will happen when the ALMO's five-year contract with the council comes to an end? "Arm's-length management organisations could take over ownership of council homes by 2006 under radical new proposals drawn up by the Office of the Deputy Prime Minister" (Inside Housing 3.9.04). This is exactly what DCH predicted and why we describe ALMOs as two-stage privatisation. They are simply a short term attempt to get round tenants opposition to stock transfer.
We all want improvements to our homes but we are not prepared to bow to blackmail. Ask yourself: why can't the government give the extra money to the council direct - as tenants are demanding - unless they have a privatisation agenda?
An ALMO "is compatible with achieving full stock transfer in the longer term." (PriceWaterhouseCoopers report for Haringey council, June 2001)
Wendy Jarvis, ODPM head of local authority housing finance on ALMO
ALMOs "don't own their stock at the moment. We have to look at their structure again…The housing association model is an obvious one to look at and we are looking at it. It would be far too early to talk to the City about it. If you go to the City too soon, they won't be interested, they need something tangible…Our view has to be that it stays within the Whitehall family until we have formulated our own views and particularly that the Treasury is comfortable. Then we will go out to the relevant private sector partners."
(Inside Housing 13.6.03)
Elected councillors will no longer be accountable for what happens to our homes. It's a recipe for excuses
Council housing is the only form of housing where tenants elect their landlord, and keeping our homes under democratic control is worth fighting for.
A separate private company means less co-ordination between housing and other services - when we need more!
The government claim that separating out housing management will bring improvements but nowhere do they provide any evidence to demonstrate this.
Heriott-Watt University found exactly the opposite from their research into the effects of separation after transfer to housing associations. Alistair McIntosh, from the Housing Quality Network who commissioned the report, said "There doesn't appear to be a lot of empirical evidence suggesting that the only correct route is to make a split between the strategic enabling function and the landlord function. It's been carried on without any research or rationality underpinning it." Inside Housing 11 January 2002
Tenants believe that putting housing into a separate company will make co-operation across council departments more difficult. Housing has a direct effect on our health and our children's education. If housing managers are following a separate company agenda it will just make 'joined up thinking' more difficult.
Tenants on the board will not be allowed to represent our interests - their hands will be tied by company law
The biggest argument used by supporters of ALMOs is that having tenants on the board will give us real power. Ministers argue that ALMOs give tenants real power in the form of tenant company directors. But the ALMO operates like any other private company. Although formally accountable to a board of directors, in practice it is the senior management team who make the decisions. Company law makes it clear board members are not 'representatives' and have a primary legal duty to consider the interests of the company. Tenants on the board will be in a minority, gagged by 'confidentiality' clauses, and are in practice totally unaccountable.
A study by Liz Cairncross of Oxford Brookes University (Changing Boards: Emerging Tensions) found that tenants on boards were marginalised. An Audit Commission report accuses councils of deliberately misleading tenants. "tenants are often led to believe that they will have an explicit role in representing the interest of their fellow tenants on the board. This is not compatible with the accepted principle that dictates that as a board member they have to work for the interest of the organisation - that is, that the directors responsibility takes supremacy."
The first councils to set up ALMOs had the support of key tenants representatives. Decisions were taken very quickly and without any real public debate. Almost nowhere did tenants hear the arguments against accepting an ALMO: until the campaign in Camden, where the unstoppable ALMO train was finally derailed.
"Real tenants' power is what happens when democratically elected politicians have to listen to a large enough collective voice" Lesley Carty, Camden DCH
Massive amounts will be spent on consultants, re-organisation and higher senior managers pay
Setting up the private company doesn't come cheap. Leeds spent an extra £1 million on managers alone. Ashfield's ALMO cost £2 million to set up. ALMOs have spent tenants rents on new corporate images and logos - money which could have been used for repairs! Ordinary housing workers will lose out by being TUPE transferred, and staff turnover and demoralisation will affect the service. Camden council spent £500,000 trying in vain to persuade tenants to accept an ALMO. It's an outrageous waste of tenants' money.
Going ALMO is risky - you won't necessarily get the money
A third of the ALMOs which have been set up haven't received the money they were promised by the government. Unless an ALMO gains a "2 star" rating the government won't give them the extra funding. In Leeds they set up six ALMOs, but only two of them gained enough stars, so most of the tenants in Leeds have all the costs of an ALMO, and none of the benefits. Salford ALMO - along with others - has failed to get 2 stars. Tenants are left with the expensive setup costs and no extra money for investment.
Winning direct investment without strings is worth fighting for. We've already won concessions. We can win much more!
Our campaigning has already forced concessions from the government. They say they are in favour of 'choice in public services'. But they want to limit the 'choice' for council tenants to one of three options - stock transfer, PFI (Private Finance Initiative) or ALMOs. Since tenants in Camden voted NO to the ALMO in January, the national campaign has increased in strength and Ministers are under increasing pressure to concede a 'fourth option' of direct investment with no strings attached. Vote No to ALMO and tell them we want direct investment in council housing!
ALMO Briefing & Questionnaire
The Centre for Public Services and DCH have produced a
Briefing and Questionnaire
for the House of Commons Council Housing group on the new proposals to take ALMOs into the private sector. Distribute to tenants and councillors in areas with ALMOs.
Read
ALMOs on brink of freedom
and NFA paper
to decide whether we were right to say ALMOs are two-stage privatisation.
"Arm’s-length management organisations could take over ownership of council homes by 2006 under radical new proposals drawn up by the Office of the Deputy Prime Minister"
(Inside Housing 03/09/04).
"a new paper from the ODPM proposes giving Almos complete ownership of council homes, perhaps as early as 2006, as one of a number of options for the future"
(Guardian 03/09/04).
This is exactly what DCH predicted and why we describe ALMOs as two-stage privatisation. They are simply a short term attempt to get round tenants opposition to stock transfer.
ASK YOURSELF
If government has extra money for ALMOs why won't they allow councils to use this money direct - unless, of course, privatisation is their real agenda?
If government has extra money for ALMOs why won't they allow councils to use this money direct - unless, of course, privatisation is their real agenda?
