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Housing can capitalise on past success

AGENDA - Viewpoint

Contractors must seize opportunities in social housing, writes Tim Young

UNTIL last December the future of arm's length management companies was uncertain. Although many had, and continue, to deliver impressive results on Decent Homes, their role after 2010 was unclear.

Now the Government appears to have thrown ALMOs a lifeline. In its response to the Barker Review the Government said that in the future ALMO organisations will be free to use their own resources, including land, to build homes.

It says it wants to find ways of allowing topperforming council housing departments to provide social rented properties. To that effect the Office of the Deputy Prime Minister wrote to all ALMOs inviting them to express an interest in new building projects and to suggest possible proposals for delivery.

The approach, although speculative, is important.

Although the ODPM has said it is not looking for fully worked schemes, it is seeking suggestions as to how they could be funded and the scale and mix of any new homes built.

The Government's response to the Barker Review takes the process forward, for the first time formally suggesting a role for ALMOs in the delivery of new homes.

It is critical that the construction industry aligns itself with its ALMO partners or risk missing out on the wealth of new opportunities for future joint working.

ALMOs have delivered ? in many cases beyond expectations and targets. They have shown impressive tenacity in breaking away from the public sector mould to introduce major efficiency gains.

This has included new finance, procurement and project delivery systems that have not only reduced overheads but also increased residents' satisfaction.

Three star-rated ALMOs have proved the value the arms length route brings to the efficient completion of housing projects by setting and achieving aspirational standards and working closely with constructors and partners to increase efficiencies.

Hounslow Homes ALMO is a case in point ? it is four years ahead of the ODPM's Decency targets in addition to achieving significant cost efficiencies.

Costs of upgrade per property ? mostly involving the installation of new kitchens and bathrooms ? stood at £11,529 in 2003-04. They now stand at £9,665 per unit ? a total cost saving of 17 per cent.

This success has been driven by a willingness to work closely with private sector partners in construction and with them to explore new options and develop innovat ive management and delivery systems.

This should be evidence enough for the ODPM that ALMOs have the potential to deliver on new homes alongside housing associations. The Barker Review has already made it clear that a shortage of homes has been a major cause of high house prices.

The report estimated that over the next 10 years the number of social and affordable houses will need to be increased by at least 17,000 a year.

It is critical that constructors build on and reinforce the relationships that already exist with ALMOs.

If the ODPM now gives ALMOs a part to play in meeting demand for new homes it will create the chance to consolidate what has been a hugely successful relationship between public and private sectors.

The Government is suggesting a role for ALMOs in the building of new social housing. They, the councils and the construction industry must answer its call.

Tim Young is a partner at consultant John Rowan and Partners.