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These were the four options for the future ownership and management of Council homes:
This option would mean that the Council would continue to own and directly manage its 3,400 homes.
Tenants would remain as Secure Tenants of the Council and the Council would continue to provide housing services in a similar way to the way in which it does now.
However, the Council would only be able to choose this option if it can demonstrate that it would not need any additional money to help it to improve its homes to at least the Decent Homes Standard, and that the standards of homes and services that it could afford to provide would meet with the expectations of tenants and leaseholders
This involves setting up a new organisation, separate from the Council, but which would be owned by it. This is why this option has the name “arms length”, because the organisation would operate at “arms length” from the rest of the Council.
The ALMO would manage and repair all Council homes, by employing the staff and having a contract with the Council that would set out what the ALMO would do. The Council would continue to own the homes so tenants would keep their existing Secure Tenancy.
Although the Council would legally own the ALMO, it would be run by a Board of Management, made up of volunteers. There would usually be one third of the places on the Board for tenants and the other places would be filled by Council nominees and independent members. There are usually around 12 to 18 people on Boards of this kind.
To encourage Councils to consider setting up an ALMO, the Government has given selected Councils approval to borrow extra money for each of their homes to carry out major repairs and improvements and bring their homes up to the Decent Homes Standard. This is over and above the existing resources the Council has available.
To get the extra “borrowing approvals”, Councils must score at least a 2 star rating from the Housing Inspectorate for their housing service. So far, only a few Councils have achieved this.
Additional investment through the ALMO option is based on a Council’s ability to meet the Decent Homes Standard. An ALMO would not, therefore, enable the Council to meet the costs of all the required repairs and improvements.
Remember! If the Council wanted to set up an ALMO it must consult tenants on it as a condition of proceeding with the proposal. Tenants would be given full details of the proposal and would be able to give their views.
This option is one in which the Council transfers the ownership of some, or all of its homes, and the responsibility for managing, repairing and improving them to a Registered Social Landlord (Housing Association). Government guidelines are that tenants should be balloted on a proposal to transfer and that a majority of those voting should agree to it.
Where a Council transfers all of its homes this is known as a Large Scale Voluntary Transfer (LSVT). If it transfers only some its homes (e.g. an estate or an area) this is known as a Partial Stock Transfer.
Transfers can be to an existing RSL or to a new RSL set up by the Council to take the transfer of Council homes. If the Council sets up an RSL it cannot subsequently own or control it.
RSLs are non-profit distributing organisations whose job it is to provide social housing for rent at affordable levels. The vast majority (over 2000) are registered with the Housing Corporation, a Government body whose role it is to oversee and monitor the work of RSLs to ensure they perform to set standards.
RSLs operate outside of the Government rules on borrowing so they are able to borrow the money that is needed to carry out repairs and improvements from banks and building societies, in a way that Councils cannot. They must have a business plan that sets out all the anticipated income and expenditure over a 30-year period and this means they are able to plan ahead for repairs and improvements.
If Council tenants agree that the management and ownership of their homes should transfer to an RSL:
They become ‘Assured’ tenants of the RSL, instead of ‘Secure’ tenants of Council
The Government’s policy on rents applies to RSLs in the same way as it does to Councils. This means that in the future, there should be little difference in rent levels between similar homes in similar areas, regardless of whether the landlord is a Council or an RSL.
The RSL can borrow to pay for the repairs and improvements that are needed to bring the homes up the Decent Homes Standard
Existing tenants get a Preserved Right-to-Buy, with the same levels of discount, but new tenants of the RSL may have a less generous right - the ‘Right to Acquire’.
Tenants are able to become members of the Board of Management of the RSL and will have a direct say in how the housing service is run.
The Council is no longer the landlord and this means that the Councillors you elect no longer have a direct say in how the housing service is run. However places are reserved on RSL Boards for Council nominees and tenants.
This is a method of raising money to carry out major repairs and improvements to Council housing by raising money from the private sector.
It has been used for a number of years to raise money to build schools and hospitals.
Although PFI projects are very complicated to set up the idea behind them is simple; the private sector puts up the money for major Council house repairs and improvements and is paid back gradually over a period that is usually 25-30 years.
Whilst PFI schemes vary, the organisations that do them are often construction companies working in partnership with housing associations. Where this happens, the construction firms put up the money and carries out the repair and improvement work and their housing association partners then manage the Council homes for the period of the contract.
Under PFI the Council remains your landlord and you remain its tenants but, as explained above, the day-to-day management of your homes could be taken over by a housing association.
The PFI Scheme is, however, only suitable for investment in smaller numbers of properties and would not provide a whole stock solution in Gedling.
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