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Local Government Chronicle –22 June 2006

With ALMOs and the new profession of housing strategy coming to the fore, Mark Smulian investigates what is next for council housing

Housing's place within councils is in a state of flux and the traditional housing department is becoming an endangered species.

While landlord functions move to arm's-length management organisations (ALMOs), housing associations or separate departments, a new profession is emerging - housing strategy.

This profession develops policy for councils' approaches to housing of all kinds - not just social housing - and must fit that with community strategies and planning policy.

If a council no longer has homes to manage it will still have homelessness, housing waiting lists and housing advice responsibilities, but these are usually too small to form a separate department and do not necessarily sit well with strategy.

However large or small their housing functions, some councils have been influenced by the trend for joined-up working, and have set up departments of 'housing and...', and there can be surprising combinations.

It was once all so simple. Councils had housing departments, which built, owned and managed homes, chose who would live in them, maintained them and collected rents.

With these traditional all-purpose departments vanishing fast, what future do council housing managers have? Indeed, will housing departments exist for much longer?

To understand why there is so much change, let's travel back to 1989.

The Conservative government, faced with huge bills for refurbishment, construction and maintenance of council homes, decided to give the job to housing associations. Money for new homes was channelled to them and council house building substantially ended.

Transfers to associations gathered pace after Labour won in 1997, but there was increasing criticism that the government offered tenants a forced choice of 'transfer and lots of investment in refurbishment' or 'stay with the council and watch your home rot because there is no money'.

This embarrassing accusation led ministers to devise ALMOs. These are separate bodies, operationally independent but owned by their parent council, from which each has a contract to deliver the decent homes standard by the government's 2010 target date.

Ministers wanted to control how much councils would spend in meeting this standard for modern kitchens, bathrooms and heating, and set three routes through which councils that could not afford the work could gain extra money - ALMOs, transfer or private finance initiatives.

Some 80 councils have decided to keep direct ownership of their homes because they can afford to meet the standard, but even they are under pressure from the government to split landlord functions and strategy because ministers think this gives a sharper focus on each aspect.

Housing strategy is relatively new to most councils. It requires them, sometimes in collaboration with neighbouring councils, to look at their overall local strategies, and at housing demand, and then work out how much affordable and market housing will be needed, where it might be built and how the planning system can deliver it.

Chartered Institute of Housing policy officer Sarah Davis stresses that strategy is not an obscure side issue, but vital to councils' local plans and well-being role.

"Housing is still really central, and deserves recognition for the important role it plays in planning, regeneration and social inclusion. It underpins the whole well-being power and delivery of councils' overall strategies," she says.

But because only a handful of people work in strategy in most councils, it can end up in some strange places - planning is the usual destination, but in some it is in a policy unit, or regeneration.

Bob Livermore, CIH north-west chair and housing services manager at West Lancashire DC, says: "The strategy/management split is an issue for organisations.

"The government wants it, but I head both strategy and management, and my view is if it works you should not pull it apart for the sake of it.

"Some smaller strategy departments face difficulties to get resources, and they may need to look to more than one council working together."

On the positive side, the rising importance of strategy means "we work with colleagues from other departments and must make our voice heard," he says.

Small strategy teams face an obvious difficulty in defending a budget for a service that employs few people and delivers nothing very tangible. The CIH has argued that strategy resources should be ring-fenced by the government.

Alastair McIntosh, chief executive of the National Federation of ALMOs, says: "Strategy should be a separate profession.

"Housing management attracts a certain type of person, and strategy possibly appeals to cerebral types."

He fears the Audit Commission's change of emphasis in comprehensive performance assessment to office-based judgments of performance indicators rather than live inspections, will jeopardise stand-alone housing departments.

The future for ALMOs became a little clearer when communities and local government secretary Ruth Kelly announced this month that a ballot of tenants would be needed if a council with an ALMO wanted to disband it and take back full control of housing - a formidable obstacle.

ALMO managers would like to manage their homes, build new ones and regenerate communities, as do housing associations.

There could be more money for them to do this work if a pilot of borrowing freedoms announced by Ms Kelly proves successful.

The government expects 95% of social housing to have met the standard by 2010. But it is a moving target. The standard's definitions include that kitchens should not be more than 20 years old or bathrooms older than 30.

Before long, homes that are now decent will thus become 'indecent'.

Will the money still be there for councils and ALMOs once the target has been met and the government's attention has, perhaps, shifted?

So far, nobody is saying.