Local Authority, ALMO and TMO Relationships - by zlt20671

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									Local Authority, ALMO
and TMO Relationships -
A Good Practice Guide
EXECUTIVE SUMMARY
2             Local Authority, ALMO and TMO Relationships - A Good Practice Guide




    Foreword

    In recent years Arms Length Management Organisations (ALMOs) and Tenant Management
    Organisations (TMOs) have made significant contributions to effective housing management and
    active tenant involvement, both of which the government is keen to support and encourage. And we
    know that this is most likely to work where there is a supportive local authority.


    When we consulted on tenant empowerment proposals in the summer of 2007 we recognised the
    potential for confusion of roles and responsibilities in places where there were both ALMOs and
    TMOs. We asked what could be done to encourage a positive and constructive relationship between
    TMOs and ALMOs that has the interests of tenants at its heart. The majority of respondents to this
    question saw the solution as being some form of agreement between the three parties, encouraged
    through guidance.


    So I am delighted that the three main organisations representing TMOs, councils with ALMOs, and
    ALMOs themselves have got together to produce guidance to assist the development of tenant
    management where ALMOs are managing tenants’ homes. The guidance emphasises the importance of
    good communication and clarity about roles and responsibilities and that everyone should work
    co-operatively at all times to deal effectively with the day-to-day issues that inevitably arise.
    Working together with a clear and joint purpose is of huge importance.


    I am sure this guidance will be an invaluable resource in the development of effective tenant
    management.




    Iain Wright
    Parliamentary Under Secretary of State for Communities and Local Government
3                 Local Authority, ALMO and TMO Relationships - A Good Practice Guide



Introduction                                                 delegated to them. Small TMOs may rely mainly on
This is a summary of guidance produced jointly by the        voluntary effort but most employ staff such as housing
National Federation of ALMOs (NFA), the National             managers, caretakers and repair workers.
Federation of TMOs (NFTMO), and the Councils with
ALMOs Group (CWAG). The full guidance document is            The services managed by the TMO vary with local
available in digital form at www.nftmo.com,                  circumstances but may include day-to-day repairs,
www.almos.org.uk and www.councilswithalmos.org.uk.           allocations and lettings, tenancy management, cleaning
The guidance has been endorsed by Communities and            and caretaking, and rent collection. TMOs are often also
Local Government and forms part of a package of              proactive in providing wider community benefits such as
guidance published by them to underpin new                   youth centres, credit unions and social clubs.
arrangements for tenant empowerment.
                                                             Council tenants have a statutory Right to Manage which
The guidance is voluntary but we strongly urge ALMOs,        gives local tenants’ groups the right to set up a TMO
TMOs and local authorities to base their relationship on     provided that they can demonstrate competence and
the principles promoted in the document. The key to          that the majority of tenants support the proposal in a
successful partnerships is to have a very clear and agreed   ballot. The tenants’ Right to Manage exists whether or
framework of agreements and protocols, which set out         not an ALMO is operating in their area.
the roles and relationships of the parties.
                                                             What is an ALMO?
This guidance is designed to respect and support the         Arms Length Management Organisations (ALMOs) were
council tenants’ Right to Manage, to sustain existing        introduced as an additional option for financing
TMOs, to have proper regard for the aims and objectives      investment in housing that remained in local authority
of ALMOs and to sustain the client role of the local         ownership in order to bring council homes up to the
authority. Effective tenant management can provide           decent homes standard set by government.
benefits for all parties.
                                                             An ALMO is a wholly owned local authority company
What is a Tenant Management                                  set up by the council to manage and improve all or part
Organisation?                                                of its stock. An ALMO is managed by a board of
A Tenant Management Organisation (TMO) is a means            directors, made up of tenants, independent members and
by which council or housing association tenants and          council nominees. No one group is normally allowed to
leaseholders can collectively take on responsibility for     be in a majority and most operate with a third of the
managing the homes they live in. Resident members of         board made up of tenants, a third, independents and a
the TMO create an independent legal body and usually         third, council nominees. Many ALMOs have a tenant
elect a tenant led management committee to run the           chair.
organisation. The TMO can then enter into a legal
management agreement with the landlord. The TMO is           ALMOs, like TMOs operate under the terms of a
paid annual management and maintenance allowances in         management agreement with the local authority. The
order to carry out the management duties that are            extent of delegation by the local authority to an ALMO



The key to successful partnerships is to have a very clear
and agreed framework of agreements and protocols which
set out the roles and relationships of the parties.
4                 Local Authority, ALMO and TMO Relationships - A Good Practice Guide



will vary. Some councils retain a significant number of      When and how does the work of
housing staff to carry out strategic functions while other   ALMOs and TMOs overlap?
councils may retain fewer staff and exercise some            In theory then the basic relationships appear to be clear
strategic functions via the ALMO.                            and well defined (see diagram below). The TMO and the
                                                             ALMO each have a management agreement and each
As the local authority retains ownership of the housing,     provide housing services to council tenants within their
existing and new tenants remain as secure tenants of the     own defined area. The council sets the strategic
council and retain their existing rights – including the     framework and delegates functions to each, financing
Right to Manage.                                             the services through allowances paid to the ALMOs and
                                                             TMOs.
What about the housing functions of
a council that has set up an ALMO?                           In practice, however, the roles and relationships are more
When a council delegates housing functions to an             complex and the work of the ALMO and the TMO
ALMO the responsibilities that it retains are strategic      touch and overlap in a variety of ways. The complicated
and often include;                                           diagram shown on the opposite page gives some idea of
                                                             the messy world within which local authorities, ALMOs
• Setting rents and standards                                and TMOs operate! For example:-
• Higher level performance monitoring
• Assessment of housing need and setting related             • Where a tenants group seeks to develop a new TMO
  policies (e.g. allocations)                                  in housing stock managed by an ALMO.
• Enabling and co-ordinating the work of housing             • Where an ALMO has been set up to manage stock
  providers.                                                   which includes housing already being managed by a
                                                               TMO.
The council retains ultimate responsibility as the           • Where an ALMO and a TMO are providing different
landlord and has a contractual relationship with the           parts of the housing service to the same group of
ALMO and, separately, with the TMO.                            tenants.
                                                             • Where the council delegates to an ALMO some
                                                               responsibilities for supporting or monitoring a TMO.




                                                   COUNCIL

                                                MANAGEMENT
                                                AGREEMENTS

                           TMO                                                  ALMO

                                                 SERVICES TO
                                                  TENANTS
5                 Local Authority, ALMO and TMO Relationships - A Good Practice Guide



It is also true that not all relationships between TMOs    • There had been a lack of clarity in respect of sharing
and their parent local authorities were without their        of information on a day-to-day basis between the
difficulties and tensions and where confusions have          ALMO and TMO, e.g. tenancy information and files.
arisen it may also have been as a result of existing       • There was a lack of clarity in respect of monitoring
difficult relationships being carried over to the new,       performance, particularly in the light of the pressure
more complex working arrangements.                           on ALMOs to achieve a high star ranking in order to
                                                             access additional resources. For some TMOs
Difficulties and Challenges                                  monitoring appeared to be over zealous or intrusive.
Some authorities planned and resolved the new              • In places where new TMOs were being developed in
arrangements better than others. Councils with more          an area now managed by an ALMO there was a
experience of working with a range of housing                concern that the climate for that embryo TMO had
management contractors may have been better placed.          become less supportive.
In some areas TMOs reported that the local introduction
of an ALMO was bringing with it unwelcome changes.         The NFTMO, the NFA and CWAG agree that these and
For example:-                                              other issues are structural. They arise out of
                                                           circumstances where each of the organisations is seeking
• In many places the TMO’s main contacts with the          to carry out its own role effectively, but where the
  council were moving to the ALMO, but the ALMO            interaction of those roles has not been planned and
  was not itself clear about its own role in relation to   agreed with sufficient care.
  the TMO.




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                                          SERVICE LEVEL
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                                            MONITORING
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                                    SERVICES TO
                                  TENANTS OVERLAP
                                                                                     R
6                  Local Authority, ALMO and TMO Relationships - A Good Practice Guide



The TMO Clienting Role                                        would be operating as an agent for and on behalf of the
It is clear that a key factor in a successful relationship    council. This is an important distinction. For example;
between an ALMO and a TMO is the way in which the
council exercises its landlord client role. In the simplest   • The ALMO would be acting on behalf of the council
terms ALMOs and TMOs all have their principle                   and not in its own interests.
contractual relationship with the landlord council. It is     • The ALMO would be applying a framework (e.g.
important that the local authority organises this pivotal       performance standards) initially agreed between the
client role in such a way as to create clear and positive       TMO and the council.
working relationships.                                        • Any decisions made by the ALMO in this role would
                                                                usually be subject to council approval, particularly
We do not recommend one single model, indeed our                decisions to issue default notices, notices of dispute
research has shown that the exact roles of each                 and other notices issued under the management
organisation vary considerably from area to area. The           agreement on behalf of the council.
more successful relationships are often where the roles       • Notices served by the TMO under the management
have been properly thought about and formally agreed            agreement would continue to be legally served on the
between the parties.                                            council but may be practically dealt with by ALMO
                                                                staff on the council’s behalf.
Although many TMOs would prefer to retain their direct        • The council would be legally responsible in the event
relationship with their local authority it may be a             that the ALMO administers the client role in a way
necessary and a positive decision for a local authority to      that puts the council in breach of the agreement.
delegate the landlord function to the ALMO and thereby
allow the authority to focus on the strategic housing         In all cases the key issue is that the arrangements are
role.                                                         properly considered by the local authority and discussed
                                                              with both the TMO and the ALMO. There should be
Where the council chooses to exercise its client role via     clear written protocols and/or service level agreements
the ALMO great care should be taken to explain and            that set out the roles and responsibilities of each of the
agree the basis on which the ALMO is involved. Under          three parties. This should cover all legal requirements
no circumstances should the council step back from            and monitoring arrangements but also the informal
their contractual and statutory obligations to the TMO        support, guidance and policy updates for the TMO. The
and simply ‘leave it to the ALMO’. The council should         main guidance document includes model agreements.
remain an informed client to the TMO as well as to the
ALMO.                                                         Performance Monitoring
                                                              One area that is often delegated to an ALMO and can be
The ALMO is not a party to the management agreement           problematic is that of the performance management of
but, if asked to administer the TMO clienting role,           the TMO.




In the simplest terms ALMOs and TMOs all have their
principle contractual relationship with the landlord
council. It is important that the local authority organises
this pivotal client role in such a way as to create clear and
positive working relationships.
7                 Local Authority, ALMO and TMO Relationships - A Good Practice Guide



Communications tend to be more effective where
organisations clearly identify an individual who is
responsible for liaison. In most cases there should be a
liaison person identified by the ALMO, the TMO and the
local authority.

In order to release the funding allocated to them,         complex. An information sharing protocol would help
ALMOs have to achieve a 2 star or higher rating from       set down the expectations of each organisation and be a
the Audit Commission. They are rightly concerned about     reference point for staff dealing with these issues on the
meeting government performance targets. As the TMO’s       front line.
performance contributes to the overall performance
across the ALMO area, the ALMO will want to work           The TMO Management and
closely with the TMO, as an agent of the council, to       Maintenance Allowances
ensure that standards agreed between the TMO and the       Overall funding for council housing is currently
council are achieved.                                      insufficient to meet all of the needs of the stock and its
                                                           tenants and at a local level this can often cause tensions
TMOs should therefore aim to work constructively with      between TMOs and their councils and ALMOs when
their local authorities and ALMOs where they are acting    deciding where to prioritise funding and agreeing
as an agent of the council, to improve their performance   allowances.
where necessary.
                                                           It is recommended that the TMO allowances are made
The guidance recommends that the roles and                 directly from the HRA and wherever possible the annual
responsibilities on performance management are clearly     reviews are negotiated and formally agreed by the
set out for each organisation. There should be regular     council. However, where an ALMO has been given the
meetings to discuss performance and agreement about        responsibility for negotiating the allowances it is vitally
how issues identified through monitoring will be dealt     important that the process by which that is done is
by the parties.                                            transparent and fair and in accordance with statutory
                                                           guidance on calculating TMO allowances.
Communication between the Parties
One of the most important aspects of developing a          In the case of a newly developing TMO the allocation of
working relationship between the three parties is to       allowances to the TMO may impact upon the business
ensure that there is on-going and regular communication,   plan of the ALMO and some re-organisation of services
based on an understanding of each other’s aims and         may be required. It is imperative that all three parties
objectives as well as organisational cultures.             discuss the financial issues from the beginning and
                                                           explore all of the options fully.
Communications tend to be more effective where
organisations clearly identify an individual who is
responsible for liaison. In most cases there should be a
liaison person identified by the ALMO, the TMO and the
local authority. This is particularly helpful where
organisations work in specialist teams and lines of
communications with other organisations can be
8                 Local Authority, ALMO and TMO Relationships - A Good Practice Guide



It is crucial that both parties remember that the shared
aim is to provide excellent housing management and
repairs services to the tenants. ALMOs and TMOs must
fully engage and agree a shared approach to improve the
services to tenants and meet government performance
targets.

Good Practice throughout the Life                             Where a TMO is in development, negotiating the
Cycles of a TMO and ALMO                                      management agreement and allowances: The principle
The relationships and roles of councils, ALMOs and            relationship is between the local authority as landlord
TMOs will change during the life cycle of a TMO. Good         and the TMO, and it is they who will sign the
practice policies and procedures will need to be in place     management agreement. The ALMO, however, is a key
for each stage of the life cycle.                             partner in the process and the local authority may
                                                              delegate to the ALMO the role of negotiating with the
ALMOs are also organisations that will experience major       TMO. Where that is done it must be clear that the
changes as their current objectives are achieved and their    ALMO is acting as an agent for the council. The full
longer term role and status is resolved. Their relationship   guidance includes a model agreement setting out the
with any TMOs will need to be considered and planned          roles and responsibilities of the parties during a TMO
as those changes unfold. For example;                         development programme.


Where tenants want to explore options for greater             Where a TMO is fully operational: The ALMO will not
control, including the option of setting up a TMO:            be a principle party to the management agreement but
ALMOs should be familiar with relevant government             will interact with the TMO in several ways.
policies and help to provide tenants with the                 Arrangements should be set out in a protocol document
opportunity and resources to explore options for              agreed by the ALMO, TMO and local authority. A model
involvement in the way their homes are owned and              document can be found in the full guidance.
managed.
                                                              Where an existing TMO is seeking to take on
Where a tenants’ group serves a Right to Manage               additional functions: The process may raise issues for
Notice: The Right to Manage for council tenants is not        the ALMO that are similar to those arising when a new
affected by the fact that an ALMO is already managing         TMO initiative is triggered.
the housing that is the focus of the proposed TMO. The
Right to Manage regulations (www.communities.gov.uk/          Where a TMO is exploring community ownership:
publications/housing/tmostatutoryguidance) require that       Proper regard should be had to the legitimate interests
a notice be served on the council by the prospective          of an ALMO which is working in the TMO area. As in
TMO. If an ALMO is asked to process a Right to Manage         other instances, the local authority may nominate ALMO
Notice on behalf of the council then it must be clear to      officers to engage in the options study on behalf of the
all parties that the ALMO is acting as an agent and is        council. Once again it will be important that in this case
applying the rules and procedures set out in the              it is clear to all parties that the ALMO is acting as an
regulations.                                                  agent for the council and the ALMO should co-operate
                                                              with all reasonable requests for information and, if in
                                                              doubt, should consult the council.
9                Local Authority, ALMO and TMO Relationships - A Good Practice Guide



Where problems have arisen in the TMO: Where the          Where a council is reviewing the ALMO management
governance of a TMO appears to be failing or the TMO’s    agreement with a view to renewing it: The review and
performance is falling below agreed targets then the      renewal of an ALMO’s management agreement should
council or the ALMO acting on behalf of the council       be seen by all parties as an opportunity to review
may need to trigger remedial action provided for in the   council, ALMO and TMO relationships and to set out
management agreement.                                     roles, responsibilities and expectations for the period of
                                                          the next management agreement. A protocol should be
Where an ALMO is getting ready for inspection and         appended to the new agreement.
achieving two stars: It is crucial that both parties
remember that the shared aim is to provide excellent      Where a council is reviewing stock options at the end
housing management and repairs services to the tenants.   of an ALMO management agreement and the
ALMOs and TMOs must fully engage and agree a shared       achievement of Decent Homes: A new stock options
approach to improve the services to tenants and meet      appraisal will take place in many authorities and the
government performance targets. The TMO’s                 guidance provided by the NFTMO for TMOs involved in
performance may be assessed by the Audit Commission       stock options appraisals is still a useful guide.
during an ALMO inspection and it should work
constructively with the ALMO to improve performance       When an ALMO is considering new build: It may be
where necessary. The guidance recommends that roles       looking at redeveloping parts of existing estates and
and responsibilities before and during an Audit           council housing areas managed by a TMO or are close to
Commission inspection be set down in writing so that      a TMO managed estate. In such cases the ALMO should
each party understands their role.                        ensure that it engages with the TMO early in the process
                                                          about its plans and ensures they are fully consulted as a
The delivery by the ALMO of the Decent Homes              stakeholder in the process.
Standard: Managing major works will require good
planning, tenant consultation and effective programme     Where a council or an ALMO is exploring community
management. Properties under TMO management may           ownership: Any existing or developing TMOs in the area
well be part of the decent homes programme and it is      should be engaged in that appraisal as early as possible.
essential that the ALMO and the TMO work together to      Existing and developing TMOs may want to actively help
ensure its successful completion. The council should      develop this option with an ALMO but it is important
check what responsibilities for major works have been     not to assume that and to explore fully what that would
delegated to the TMO under its management agreement       mean for all parties, including the tenants not currently
with the council and take care to work in accordance      managed by a TMO.
with that agreement.




Managing major works will require good planning, tenant
consultation and effective programme management.
Properties under TMO management may well be part of
the decent homes programme and it is essential that the
ALMO and the TMO work together to ensure its successful
completion.
10                Local Authority, ALMO and TMO Relationships - A Good Practice Guide



Where problems have arisen in the ALMO: Where the           authority would lead on and could invite both staff from
governance of an ALMO appears to be failing or the          the ALMO and the TMOs to participate in, such as fraud
ALMO’s performance is falling below agreed targets          awareness or strategic housing policies.
then the council may need to trigger remedial action
provided for in the management agreement. Where this        Shared Services
directly impacts upon an ALMO’s ability to carry out its    In most cases the ALMO will be providing some services
duties in respect of the TMOs in the area then the          in the TMO area such as environmental services and
council will need to consider what action should be         major works. There will also be some close liaison
taken to ensure that the TMO is not adversely affected      needed where service issues cross the boundaries of
by the arrangements.                                        housing managed by the TMO and ALMO (e.g.
                                                            allocations and transfers, anti-social behaviour). An
Support Structures                                          information sharing protocol should be set out and
It is important that existing and developing TMOs get       agreed and key members of staff from both the ALMO
the support they require. If an ALMO provides good          and the TMO made aware of their responsibilities to
support to the TMOs in its area it can also pay dividends   work together to achieve a successful outcome.
in terms of building the relationship between the two
organisations and helping communication across other        Concerns that TMOs and ALMOs may be in competition
areas.                                                      with each other may be addressed by identifying areas of
                                                            partnership working that will benefit all parties e.g. joint
If there is more than one TMO in a local authority area     procurement, sharing specialist advisors or an ALMO
then a TMO forum is a good way to share experiences         making use of a TMO local office to provide some
and good practice. Tenant Participation teams can play a    services locally.
very important support function for TMOs.
                                                            Once all parties can agree that they share the same
Alternatively, a named liaison officer, either within the   ambition; that of delivering excellent services to tenants
council if appropriate or within the ALMO has been          and can find positive ways of working with each other
shown to help TMOs. It may also be helpful for the          then there are many possibilities for joint working.
ALMO to offer professional support to the TMO senior        A shared contribution to the improvement of their local
officer.                                                    areas should remain the ultimate aim of all councils,
                                                            ALMOs and TMOs across the country.
Training
Regular training for staff and board members is essential
to ensure that people are aware of policy and legislative
changes relating to their roles and responsibilities and
are able to develop particular skills and knowledge
relevant to their job.


The guidance suggests that training programmes for staff
and board members should ensure that relevant staff in
the council or ALMO understand TMOs, their legal
rights and how best to support them and that TMO staff
are kept up to date on key national and local housing
policy issues. There may also be areas that the local
11               Local Authority, ALMO and TMO Relationships - A Good Practice Guide



USEFUL CONTACTS

National Federation of TMOs (NFTMO)                     Communities and Local Government
Website: www.nftmo.com                                  Website: www.communities.gov.uk/corporate
Address: NFTMO, c/o Burrowes Street TMC,                Address: Communities and Local Government,
Resource Centre, Burrowes Street, Walsall WS2 8NN       Eland House, Bressenden Place, London, SW1E 5DU
Telephone: 01704 227053                                 Telephone: 020 7944 4400
Email: contact@nftmo.com                                Email: contactus@communities.gsi.gov.uk


National Federation of ALMOs (NFA)                      Audit Commission
Website: www.almos.org.uk                               Website: www.audit-commission.gov.uk
Address: Rockingham House,                              Address: Audit Commission, 1st Floor,
St Maurice’s Road, York, YO31 7JA                       Millbank Tower, Millbank, London SW1P 4HQ
Telephone: 0845 4747 008                                Telephone: 0844 798 1212 or 020 7828 1212
Fax: 0845 4747 006                                      Fax: 0844 798 2945 or 020 7976 6187
Email: almos@hqnetwork.co.uk


Councils With ALMOs Group (CWAG)
Website: www.councilswithalmos.org.uk
Address: Alison Freeman, Policy Officer,
CWAG Environment and Neighbourhoods,
Leeds City Council, Merrion House, Leeds, LS2 8BB.
Telephone: 07909 548609
E-mail: alison.freeman@leeds.gov.uk


Association for Tenant Involvement and Control (ATIC)
Website: www.atic.uk.com
Address: BCHS, Fairgate House, 205 Kings Road,
Tyseley, Birmingham B11 2AA
Telephone: 0121 764 3839
Fax: 0121 764 3838




      This guidance has been supported with grant from the Government's Tenant Empowerment Programme .
The full version of this guidance document is available in digital form at the following websites:
            www.almos.org.uk • www.nftmo.com • www.councilswithalmos.org.uk

								
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