Tuesday, January 30, 2007

A mixed economy in housing: "for-profits", housing associations and ALMOs

Today the Housing Corporation announced that Pinnacle PSG had become the first private sector organisation to be accredited under its housing management accreditation scheme. Although I strongly believe that housing associations should remain not-for-profits, I don’t have a problem with other providers of social housing to be “for-profit”.

In any mixed economy in social housing, there is the interesting issue of whether council-owned Arms Length Management Organisations (ALMOs) should be allowed and encouraged to diversify beyond managing council housing.

Last week a housing expert at Heriot-Watt University found that ALMOs continue to perform well. On Thursday, the Audit Commission gave another ALMO three stars – Carrick Housing joins about a dozen other ALMOs with an “excellent” rating. (The number of housing associations with three stars is far fewer.)

In my own experience ALMOs have a real commitment to continuous improvement. In my last job, we ran free seminars on lean thinking for housing organisations – ALMOs were always well-represented among gthe attendees.

In the current issue of Roof, the financial editor of Social Housing magazine proposes that ALMOs should manage stock for housing associations (and even come to own this stock as part of stock rationalisation). I do think there is a strong case for this where ALMOs can manage stock better.

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