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London council recommended to close management arm
Lewisham Council officers have recommended that the south-east London local authority should bring its housing services back in-house amid upcoming legislative changes, increased costs and dwindling tenant satisfaction.
According to a new council report, Lewisham Homes, the ALMO that manages 19,000 properties on behalf of the local authority, could be terminated if the move goes ahead.
The report comes after the mayor of the council requested a review of alternative housing management models “in light of the changing legislative and regulatory environment”.
Though various options are on the table, including a stock transfer to a registered provider or changing the structure of Lewisham Homes, officers are recommending bringing housing services back under direct council control.
They concluded that the option “offers an opportunity to respond to the revised regulatory and legislative requirements” and “avoid some of the additional costs that these requirements will involve”.
The review also concluded that there was “no clear financial advantage” to transferring stock ownership, and that bringing services in-house could save money by “reducing the cost of governance and by integrating services”.
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Emerging in the aftermath of the Grenfell fire in 2017, the Social Housing Regulation Bill is set to bring a raft of changes into law to drive up standards and improve the regulation of the sector later this year.
Among the changes, the remit of the Regulator of Social Housing (RSH) will be broadened to place a renewed focus on the regulation of consumer matters, such as disrepair, and the Housing Ombudsman will be beefed up.
Other changes include the development of a new set of tenant satisfaction measures and a review of the Decent Homes Standard to improve the quality of housing.
The report said a “pressing need for investment” to improve the condition of housing stock has “already been identified” in the borough.
In January, Lewisham Homes revealed that it had developed a damp and disrepair action plan after a tenant’s poor housing conditions were exposed as part of an ITV News investigation.
Based on the findings of a stock condition survey by Lewisham Homes between 2019 and 2020, £300m at 2021 prices is needed to bring all its stock up to the Decent Homes Standard over the next five years.
It also said that tenant satisfaction for the housing service has fallen in the past two years, though it has started to rise again, with repairs performance a particular area of concern.
A break-clause in a 10-year management agreement between Lewisham Homes and the council, agreed in 2017, allows the local authority to terminate the agreement with six months’ notice before 27 December 2022.
“With changes in legislation and funding, now is the right time for us to consider how council-owned homes are managed in Lewisham,” said Sophie Davis, Lewisham’s cabinet member for housing management and homelessness.
She said these discussions are the “first step”, while the council will consult residents further down the line.
The council set up Lewisham Homes in 2007 and received £100m in government funding to meet the Decent Homes Standard, funding that is no longer available.
In a joint statement, Ainsley Forbes, who chairs Lewisham Homes’ board, and Margaret Dodwell, its chief executive, said setting up ALMOs was encouraged at the time and “was the way for councils to access extra funding to improve homes”.
“However, things have changed a lot since then; extra funding is no longer available and there are also enhanced regulatory and legislative requirements for social landlords, which the council is directly responsible for.
“We are committed to working jointly with the council to review how best to deliver services going forward,” they said, adding that the “priority remains working together to deliver the best possible service for our tenants and leaseholders, and providing continuity for our employees”.
The report went before the council’s housing select committee on Monday and will be discussed further at a meeting of the mayor and cabinet in July.
If the move goes ahead, Lewisham will become the latest in a list of councils terminating their ALMOs.
There are currently 25 in England, a number that has declined steadily since 2010.
Nottingham City Council is taking steps to bring its ALMO back in-house after an investigation found that £40m of its Housing Revenue Account had been misspent.
Bournemouth, Christchurch and Poole’s (BCP) cabinet recently backed the termination of its ALMO in favour of a new housing management model.
Last February, Haringey Council in north London began the process of shutting down its ALMO and bringing around 15,000 homes back in-house.
It followed the same decision by Gateshead Council the year before. East Kent Housing was wound up the same year, while Kirklees Council also opted to shut its ALMO.
Manchester City Council’s Northwards Housing is also set for closure.
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