ALMOs express concern at lack of support from council partners

A third of senior executives at arms-length management organisations (ALMOs) feel that they do not get the full support of their council partner, research by accountancy firm Baker Tilly has revealed.

The executives surveyed said their organisation’s relationship with their council was their second most pressing issue, after its overall viability. Those respondents who said they did not receive full backing blamed this on political factors and a desire by councils to exert control.

Only half of ALMOs (54%) consider their relationship with their council to be “strong and effective”, with a third (37%) believing the relationship is only “moderately effective” and one in ten (9%) describing it as “weak and ineffective”.

There was also a lack of confidence among many of the executives in their councils’ ability to lead an increase in social housing in their locality. Asked if they thought their council was well placed for this leadership role, half said no.

None of the executives want their housing management service to be taken back into the council. Instead 78% want to extend their role by becoming a stockholding and developing organisation. Just 14% would prefer to stay as they are.

Andy Monteith, a partner in Baker Tilly’s social housing group, said: “With some councils looking to take their ALMOs back in house, it is very much the case that councils are at the centre and calling the shots. ALMOs recognise the importance of councils, but over a third do not feel councils themselves are playing ball. There are clearly underlying tensions in some areas and it will be interesting to see what happens as management agreements run their course.”

Other key findings of the Baker Tilly survey, in which 37 of the 69 ALMOs took part, were:

• Almost half of ALMOs (49%) admit their understanding of the TSA’s new regulatory regime, introduced this month, is “superficial”, with many claiming that the authority had not effectively communicated what is involved
• 76% expect to make significant cost cuts in the next year
• 21% believe the credit crunch has had a significant impact on their organisation
• 74% are either optimistic or extremely optimistic about the future, with 20% saying they are uncertain and 6% admitting to being pessimistic
• Almost all consider their board to be either effective or extremely effective. Just 3% rated their board as ineffective, and
• Just 25% rate as “extremely satisfactory” their ability to engage and empower all tenants, with 65% saying it is “satisfactory” and 6% believing it to be “unsatisfactory”.

The Baker Tilly report concluded: “ALMOs appear to have been relatively well protected from the credit crunch. However, uncertainty appears to be penetrating their boardrooms from all angles with the general election, council tensions, reform of council housing finance, speculation about their future role and new TSA regulation amongst the key issues.

“Although there are a few worrying aspects to this survey – not least the low understanding of the TSA’s new regulatory framework and what appear to be underlying tensions with councils, ALMOs have confidence in the ability of their boards to manage change. Without doubt, a difficult couple of years lie ahead for ALMOs, but – according to our survey – the majority look well placed to evolve and move forward.”