Arms Length Management Organisations were thought up in 2000 as 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.
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Proposals to move ALMOs into the private sector
In 2004 the government started a review of ALMOs' future, which confirmed our prediction that ALMOs are
simply a short term attempt to get round tenants opposition to stock transfer:
"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).
The National Federation of ALMOs then produced a paper
ALMOs: A New Future for Council Housing
which proposed that ALMOs get a 35 year contract so that the ALMO company can be transferred into the private sector and
borrow on the private market. Crucially, this means 'funder's control' of ALMOs by banks and building societies.
"In the event of an ALMO failing financially the initiative would rest with the funders, rather
than with a public sector body." (UK Housing Review 2005/6)
briefing produced by the Centre for Public Services (June 2005) and
DCH background briefing notes
(August 2005) for more analysis of these proposals.
Since then, a 2006 European Court of Justice ruling ('Parking Brixen') made it clear that this type of ALMO would be
subject to competition rules - any council attempting to transfer its ALMO into the private sector would have to offer up
the management of homes to any private company from anywhere in Europe, to bid for.
For more info see
ALMO guidance and
NFA briefing note.
ALMOs with Funding Problems
In some authorities tenants have seen big sums spent on expensive set up costs but the ALMO hasn't yet been given access to
additional funding. In others the promised improvements have been scaled back and promises to tenants broken!
Unless an ALMO gains a "two star" rating the government won't give them the extra funding.
On top of that, the government then refused to announce whether any round 6 ALMOs were to get money at all, and earlier
ALMOs were told to put their spending back. A number of councils had to threaten the government with legal action to get
The most recent information shows that many ALMOs are still a long way from meeting Decent Homes (Inside Housing, 03/09/10).
Finally, there's the question of what happens after the Decent Homes money has been spent.
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Councils still pushing ALMOs
The rounds of extra government funding for ALMOs are now over - but astonishingly, some councils are still looking at setting
one up. Its easy to understand why people were lured into ALMOs, despite the risks, when there were big bribes available. But
those days are over! There is no extra money available, instead it will cost money.
If you live in an area where the council is threatening ALMO, make sure they consider all the options for housing management,
including setting up an in-house management committee, which gives tenants a bigger role in decision-making, but
is easier to set up, cheaper to run, and more democratic than an ALMO. And, crucially, it avoids the risks of two-stage
ALMOs: revert back or risk privatisation
Many tenants, trade unions and councillors arguing that once the Decent Homes money has been spent - and the ALMO has done
the job it was set up for - the management of homes should revert back to the council. Hammersmith and Fulham are the
latest council to consider bringing their ALMO back in-house - because it is costing £400,000 a year to run.
(Inside Housing, August 2010). This is what many tenants were originally promised and it makes sense. Keeping the
private company running eats up money that should be used on repairs and improvements.
But, as we predicted, the National Federation of ALMOs and powerful vested interests have other plans. They want
ALMOs to expand their empire and take on new roles.
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In addition, some ALMOs are already moving to the second stage - privatisation. These include Salford, Bolton, Oldham,
Warrington and Stockton, with others considering it. See
Inside Housing 30/04/10.
If you live in an area with an ALMO, insist on a full debate so that tenants can hear all the arguments before making a
decision, and demand that housing management reverts back to the council once the Decent Homes work is complete. This would
firmly bolt the door for good against two-stage privatisation.