The government introduced the concept of Arms Length Management Organisations (ALMOs) in its Housing Green Paper 2000: Quality and choice: A decent home for all (external link) and was re-affirmed in the Sustainable Communities Plan in February 2003, and the 2004 Spending Review.
An ALMO is a company set up by a local authority to manage and improve all or part of its housing stock. The local authority remains as the landlord and tenants remain secure tenants of the authority. An ALMO does not trade for profit and is managed by a board of directors comprising council representatives, elected tenants and independents.
The government decided that local authorities pursuing this option can secure additional capital funding if the new arm's length body provides high standards of service.
To access this additional funding an authority must:
- have established an ALMO to manage its housing stock and associated investment;
- have demonstrated a high level of performance as measured against the best value national housing indicators and a 'good' rating following a housing inspection;
- have demonstrated sound financial planning, management and long-term financial viability through a high quality business plan; and
- have provided a clear plan showing how it proposes to move to a structure of rents and a lettings scheme that is in line with the reforms agreed following the Housing Green Paper.
Councils have made bids for ALMO funding in, roughly, annual 'rounds' since 2002. The government has made allocations under the first five rounds of the programme, for 2002 - 2007, totalling £2.8 billion, for 49 ALMOs managing over 710,000 homes. In July 2004, the CLG announced that there would be at least one more round of ALMO funding. With this funding local authorities and their ALMOs are expected to achieve the Decent Homes Standard for their housing stock by 2010.
The Audit Commission has published guidance for ALMO inspections.
In addition, the Commission applies the criteria outlined in its key lines of enquiry (KLOE), first published in July 2004, to ALMO inspections.
ALMOs are re-inspected to see if they have maintained, or reached, a two star standard of service provision. Further information can be found on the ALMO re-inspection page.
From April 2010 the Tenants Services Authority (TSA) became the regulator for local authorities including ALMOs.