Following the tragic fire at Grenfell Tower, a lot of attention has been focused on the block’s management arrangements.
Kensington & Chelsea RBC delegated management to the Kensington & Chelsea Tenant Management Organisation (KCTMO) in 1996. Residents own the company.
With TMOs, tenants can ask their landlord to transfer responsibility for certain landlord functions to them and the landlord pays the TMO a fee for the services, such as grounds maintenance, caretaking and minor repairs. TMOs are concentrated in a small number of council areas including Islington, Lambeth and Wolverhampton. Many were set up as a response to poor service delivery by their landlord.
KCTMO is unique as it is a borough-wide TMO delivering the full range of housing management services. Its board includes eight resident directors. Just over 10 years ago, KCTMO also registered as an arm’s-length management organisation (Almo) to build on the existing resident engagement arrangements and access additional funding from the government.
There are 35 Almos across England managing 500,000 homes. Although 24 have gone back in-house, 10 have gone on to form new housing associations. The majority of the remaining 35 Almos have long-term agreements and deliver a wide range of services on behalf of their parent councils, including building new homes. Almo boards comprise a mix of council and resident representatives, and independent board members.
Almos and TMOs pride themselves on having residents at the heart of their governance and both models have been catalysts for significant service improvements.
Some housing associations have adopted governance models that put residents centre-stage. Merthyr Valley Homes and Rochdale Boroughwide Housing, both led by ex-Almo chief executives, have adopted governance models that include residents and staff.
Irrespective of whether the stock is managed directly by landlords or delegated to a TMO, Almo or private contractor, there are three essential ingredients for success.
First, governance arrangements must be excellent. Boards and council committees must have the right mix of skills and experience to oversee a wide range of services. Boards and politicians must challenge executive management.
Second, the service specification must be comprehensive. Any delegation of responsibility must cover risks including fire, gas and other health and safety hazards. The landlord is still ultimately responsible for compliance with all statutory requirements but if more than one party is at fault, fines and penalties may be apportioned across different partners.
Third, it is essential to have experienced executive staff. With the drive for efficiencies, we have lost skills. This is a serious challenge. None of the existing management models are inherently flawed, but all need strong governance, a vision with clear outcomes and senior staff who can deliver excellent services.
Eamon McGoldrick, managing director, National Federation of Almos