An ALMO is a company owned by a local authority but operating under a management agreement between the local authority and the ALMO in order to manage and improve council housing stock.

In ‘Sustainable Communities: building for the future’, the Government reaffirmed its commitment to establish the Decent Homes Standard for all council housing by 2010.

For those councils that need extra funds to achieve this, the Government introduced three options:
  • arms length management organisations or ALMOs
  • Private Finance Initiative (PFI)
  • stock transfer

ALMOs are designed to encourage both the participation of the local community in the management of their homes and the continuous improvement of local authority housing services. Government funding is conditional on local authorities agreeing to separate their management and strategic functions.

An ALMO provides the following services:
  • delivers major repairs and improvement to bring homes up to the Decent Home Standard
  • rent collection, dealing with arrears and debt counselling
  • maintenance
  • manages lettings and deals with empty properties

Functions remaining with the local authority include:
  • housing strategy
  • housing benefit/rent rebate administration
  • overall policy on rents

The process of applying to set up an ALMO begins with the option appraisal undertaken by the local authorities, which must include the participation of local tenants. A bid is then forwarded to the Office of the Deputy Prime Minister (ODPM) and if approved, the ALMO is given responsibility for all management functions under section 27 of the Housing Act 1985.

Extra funding is granted if, on inspection by the housing inspectorate (part of the Audit Commission), the ALMO’s services are rated as three star (‘excellent’) or two star (‘good’).

An ALMO is managed and monitored by the Board of Directors, consisting of tenants, local authority nominees and independent members. Local authorities also directly monitor the ALMO in relation to its management agreement, and regular publication of Annual Reports and Accounts, and returns have to be submitted to the ODPM.