ALMOs - changing relationships with Councils Maggie Rafalowicz 7 July 2017

Once upon a time… Manifesto for negotiation - not for implementation The EU referendum was going to be a shoo-in for Remain Housing policy would focus on – Increasing supply Maximising home ownership Reducing the benefits bill

But times change New leadership, new policies – or at least lots of reviews Priorities said to be: 1. Brexit, 2. Housing All Government activity and focus is on Brexit - pressure on Parliamentary time, Civil Service What happens if we crash out of EU, Single Market, Customs Union with no deal? £ down 19% since 23/6/16; inflation rising; interest rates likely to rise Broad-ranging Housing White Paper recognises problems – rents post-2020, Supporting People, planning, delivery, land ownership and control, imbalance of investment, need for institutional investment

And indeed times change

Demand for new homes Tenure flexibility returns – Starter Homes not being pursued; rather Build to Rent, affordable rented, shared ownership, market sale Inner London property values reducing, outer London increasing, Midlands and North growth continuing – but is a crash on the way? Who does Government want to see developing? whoever can deliver volume at least spending input But how will homes be built post-Brexit – materials costs rising; 12% of construction workers from EU (25% in London); 10-12k construction workers p.a. retiring and only 2-2.5k a year starting…

Where are local authorities in all this? HRA reform 2012 – LAs responsible for debt based on value of stock Now face same big cuts in rent income – alongside further spending cuts; e.g. major problems with adult social care May still be required to sell high value stock and hand cash to Treasury Homelessness continuing to rise - new homelessness prevention duty for LAs, but no new resources; use of TA increasing From shared services to devo and full mergers? Rise of LA Trading Companies, especially to build homes Joint ventures increasingly popular – with private sector

So where’s the demand? New homes – affordable rented and often market rented Regeneration partners Single specialist focus on problem service areas Service improvement – VFM, digital customer services Demographics – older persons housing and social care Costs reduction – e.g. employment T&Cs outside national agreements Income generation Partnership working – between LAs, and with other bodies/sectors Speedier (and more efficient?) decision-making

Once upon a time Now there are 35 covering 38 local authorities More than 70 ALMOs Established under time limited agreement for decent homes Some established later: Welwyn Hatfield; Cornwall; East Kent; Shropshire To provide quality services and promote tenant participation Accommodate local government reorganisations Now there are 35 covering 38 local authorities

The case for ALMOs Focus on delivery Faster decision making Tenant participation Focal point for community leadership Flexible delivering a range of services Income generating Need intelligent clienting, innovation and alignment with Council’s objectives

And where’s the ALMO/LATC housing offer? New development Estate regeneration Registered Providers Market renting – supply and manage Private lettings agencies Homelessness and housing needs services Right to Buy administration

And where’s the ALMO/LATC broader offer? Corporate facilities/property management – for the LA and for others Repairs and maintenance – for Council stock and for others Environmental Health enforcement, ASB taskforce Adult Social Care services, Children’s services Monitoring services - alarm systems, CCTV, emergency call-handling Benefits taskforce, welfare advice Energy schemes, tackling fuel poverty Aids and adaptations, Disabled Facilities Grant administration Highways services – street cleansing, etc. Employment and training initiatives

Delivery models Traditional ALMO – arm’s length; broadly left to get on with it ALMO under LA’s wing – close joint working; ALMO uses LA back office Twin-hatting – as model 2 but with Chief Officer (and possibly others) sitting inside the LA structure Arm’s length delivery agency or group – undertaking range of functions Single focus LATC – in business to deliver discrete non-housing service Governance models will vary – e.g. models 1-3 will have Boards combining, LA, resident and independent members; model 5 will be LA and independent members; model 4 may include both

Critical messages There is nothing magical about any one structure, though ALMOs’ inbuilt customer involvement and focus is a key strength Whatever the precise delivery model, the LA remains the single shareholder – the ALMOs that have survived and thrived longest have been those staying closest to their Councils’ agendas The greater the diversification, the more that the ‘new’ risks need to be understood and managed The greater the diversification, the more the need for the Board to have the requisite skills to understand the business streams and to provide appropriate challenge to the Executive and the Council alike Any organisation that fails to challenge itself, adapt, innovate and reinvent periodically, will eventually be condemned to obsolescence

So where does all this leave us?

Maggie Rafalowicz maggie@campbelltickell.com 020 8830 6777 or 07802 187867 www.campbelltickell.com @CampbellTickel1