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Council officers recommend bringing Newcastle ALMO back under direct control
Newcastle Council officers have recommended that the local authority’s ALMO be brought back under direct control.
Following a review of its housing services delivery, closing Your Homes Newcastle (YHN) was the preferred option out of the three put forward to respond to regulatory changes and growing financial pressures the council is under.
YHN has managed the council’s homes – currently more than 24,000 – since 2004, making it one of the largest and longest-standing ALMOs in the country.
But according to a council report going before cabinet on 24 July, Newcastle decided to carry out a review of the services because of “changes to the regulation of social housing” and “increased focus on the performance of all local authorities as providers of social housing”.
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The Social Housing (Regulation) Bill, which will introduce much more stringent and proactive consumer regulation to the sector, is close to receiving royal assent.
Social landlords also began using perception surveys to collect the Regulator of Social Housing’s new Tenant Satisfaction Measures (TSMs) in April.
“And, perhaps most significantly, local authority landlords will be subject to proactive inspection of performance and compliance with the consumer standards from April 2024, on a rolling, four-year basis,” the report said.
Another factor driving the review was “significant financial pressures” facing the council’s Housing Revenue Account (HRA), “caused by four years of rent reductions imposed by the government” between 2016 and 2020, as well as the cost of living crisis and the significant increase in inflation.
The report also cited issues with staff turnover and low tenant satisfaction, and pressures from housing disrepair claims, council tax on long-term void properties, and a “higher-than-expected” level of void rent loss.
“This resulted in an HRA deficit for the year totalling £5.2m and a reduction in reserves to the minimum (risk-assessed) level of reserves.
“The outlook for 2023-24 and beyond continues to be challenging, with a continuation of the repairs and maintenance pressures experienced in 2022-23,” the report said.
Officers concluded that the current arrangements for both YHN and the council are “no longer suited to the requirements of a core city delivering strategic housing and landlord roles” and changes are required, including the development of a housing strategy.
They put forward three options to respond to the pressures, including making no change to the ALMO’s functions but bringing all council housing services, such as homelessness and temporary accommodation, together in one place under a single housing lead officer.
Another option was to transfer all housing-related services to the ALMO.
“The preferred option recommended to cabinet is to transfer the landlord management services to direct delivery by the council.
“This offers an opportunity to respond to revised national regulatory and legislative requirements and more efficiently manage some of the additional costs that these requirements may involve,” the report states.
A council spokesperson said: “We carried out a review to see if there are ways we can improve the way we deliver housing services that will help us to achieve our aim of offering a range of housing options to meet the diverse needs of all our residents.
“We are now considering the options, but no changes will be made until we have carried out an extensive consultation with all those involved.”
The report comes amid a trend in ALMO closures.
Bury, Lewisham and Tower Hamlets councils are in the process of bringing housing management back under direct control in the face of regulatory changes and financial pressures.
They followed closures in recent years by Gateshead, Manchester, Haringey, Sheffield, Wigan, Northumberland, Kirklees, Rotherham and Leeds.
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