The Government’s gross under-funding of local authorities to manage and maintain their Council homes is leading many, including now Oldham, to propose shifting them from an ALMO, externally managed but still owned by the Council, to a Housing Association which is a private company in law. This means the loss of secure tenancies, higher rents and charges, less democratic control of the housing service, and increased risks for tenants.

NO TO PRIVATISING OLDHAM COUNCIL’S 12,000 HOMES
I have just received a press notice that “Oldham Council has agreed to convert its arm’s-length organisation (the First Choice Homes ALMO) into a housing association to secure its financial future”. I understand however that the matter is in fact still under discussion, as indeed it should be, and in any event no such transfer can occur without the agreement of tenants in a ballot.
It is true that Oldham Council’s housing is seriously under-funded – as indeed as so many other Councils. The Housing Revenue Account (HRA) Ready Reckoner shows that if management, maintenance and repairs allowances were funded at the level of actual need, Oldham would have an annual increase of £14.7 million in these allowances (i.e. £44.2 million compared with the actual £29.5 million at present), which works out at an extra £1,163 per tenant.
There has always been a view that the national agenda behind ALMOs was two-stage privatisation and that once the Decent Homes money was spent, they would try to sell the homes. This is a massive issue, and Oldham tenants must not be bounced into this without a full public debate making each and every one of them fully aware of the background and what the options now are.
There are indeed options. In a few months’ time the Government will publish its Review of Council Housing Finance when Ministers have promised “to ensure that we have a sustainable, long-term system for financing Council housing” and to “consider evidence about the need to spend on management, maintenance and repairs”. It would clearly be unwise and unnecessary to convert 12,000 homes to a Housing Association before this Government Review is published. Another immediate option is for the Council to apply for Social Housing Grant which would give access to increased funding from the Government, and if the Council have not already done so, they should do so now immediately.
There are significant drawbacks with housing associations. They are private companies in law which borrow directly from the private market and are behaving increasingly like private sector organisations managing stock as an asset to maximise returns. As a result of their becoming increasingly dependent on private lenders, the risks for housing associations have grown with the current credit crunch and recession.
Evidence from other areas round the country shows that those who have transferred now face broken promises, rising rents and cutbacks on maintenance because the lenders to housing associations are in financial trouble. And if things go wrong, there is no return to the Council.

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