Why have arm’s-length management organisations performed well in the TSMs?

Maggie Rafalowicz, director at consultancy Campbell Tickell, says that in some cases “they tried to be too independent and [were] not sufficiently in line with other council priorities”.

“When we have undertaken reviews of ALMOs, this is a theme that has come up time and again,” she says. “It has always been crucial for an ALMO to understand it has a single shareholder – its parent council – and if the ALMO doesn’t align with the shareholder’s objectives, its time as a separate entity is liable to be limited.”

Mixed picture

For those that went back under direct control, an Inside Housing investigation in 2019 into how services were faring afterwards found a mixed picture – some went downhill, for example re-let times increased, while others improved. The more recent TSM results for 2023-24 show the same: some former ALMOs got very low scores, while two achieved high scores (80%+ for overall tenant satisfaction). Many were somewhere in between.

However, a much higher percentage of current ALMOs achieved high scores. Even their lowest scores are either around the sector benchmark average or just below.

Local authorities deliver a wide range of services in a “challenging and resource-limited environment, and for stock-owning councils, the needs of housing, while obviously particularly important, have to be balanced alongside other service areas”, Ms Rafalowicz points out.

“ALMOs are organisations that focus on the delivery of housing services in a contained locality, unlike most housing associations, which operate across a wider geographical area. That single focus means they can concentrate on service delivery,” she says, adding that ALMOs also always have a direct link to their tenants via board members or service scrutiny committees.

Eamon McGoldrick, managing director of the National Federation of ALMOs, adds that ALMOs were “born in an era of regulation”.

“We have always been subject to detailed scrutiny, not just by our parent councils, but having to produce annual reports, having to produce performance data every year, publishing your annual reports, and putting them on your websites,” he explains.

In 2010, the then-Conservative housing secretary Eric Pickles announced that the Audit Commission, which inspected and audited councils, would be disbanded in a bid to “radically scale back centrally imposed, bureaucratic and costly inspection and auditing, saving council taxpayers money”.

As a result, Mr McGoldrick says councils were left to regulate themselves. Regulation is back, but he says the current regime is “much lighter”, with the RSH looking at documents in advance and not going to estates to speak to residents. “In one sense, we’re used to an even tougher regime.”

ALMOs have a lot of performance measures baked into their management agreement with the parent council, Mr McGoldrick points out. He says ALMOs are also “less political” than councils, which can be “competitive” and less inclined to share information. “We [ALMOs] would tell each other about things we’d mucked up,” he says.

Inside Housing spoke to ALMOs that performed well in the TSMs. A theme that emerged was an attitude of not taking success for granted.

Sutton Housing Partnership, which manages around 7,500 homes on behalf of Sutton Council, achieved the highest overall satisfaction score in the capital (72%) of any housing provider. The average score in London was 59.7%. Sutton is an outer borough, smaller and with fewer housing pressures than the likes of Southwark and Croydon, but this is still no insignificant feat.

But when asked why, its chief executive Steve Tucker responds: “We are not doing well – we will not pat ourselves on the back.”

He adds: “I’m very cautious about saying our tenants are happy because tenant satisfaction has been falling. Although we’re doing comparatively well, we’re not doing as well as we were before COVID-19, for example.

“The concern I’ve had is that tenants have had to go through a huge amount in the last four or five years.”

Tenants might have a secure tenancy, but they’re not immune from the housing crisis – the shortage of social and affordable housing means, Mr Tucker says, that “local authorities are having to consciously overcrowd or turn a blind eye to overcrowding”.

Tenants have also just had two years of rent rises. “So all in all, residents are not happy with how we’re doing as a sector, and even though [72%] say they’re satisfied, those people are very understanding of the problems we face in delivering the services we’d like to,” he adds.

Still, asked to drill down into why it has done comparatively well, Mr Tucker notes that as an ALMO, Sutton is “able to get things done fairly quickly compared to a local authority”. He adds: “It enables us to work with residents and give them a real say in policies.”

Sutton also reduced its patch sizes seven years ago from about 900 homes per housing officer to 370, so they have a “good prospect” of getting to know tenants, meaning issues get flagged up quickly. The ALMO also frequently engages with its resident action group.

Mr Tucker praises his “committed and professional” staff, and says a decision to bring repairs and maintenance in-house has been beneficial. The ALMO “always needs to recognise that the local authority is the parent body, and we are accountable to them”, he says.