Tower Hamlets Homes - background information

The council has set up a new organisation called Tower Hamlets Homes to manage the council's housing. The council still owns the homes 100% and tenants remain council tenants with exactly the same tenancy agreement and exactly the same rights. Leaseholders remain council leaseholders with exactly the same lease. The council is still responsible for housing policy and for setting rents.

The council created Tower Hamlets Homes because it could bring millions of pounds of additional funding for much-needed repairs to homes and estates.
Tower Hamlets Homes is an arms length management organisation, or ALMO - one of the ways set up by the government to provide extra funding for council housing. If an ALMO achieves a two-star, or good, rating, the government gives the council extra money to bring homes up to a decent standard. The council is seeking £260 million from the government's programme. Tower Hamlets Homes has a detailed plan for reaching the two-star standard.

Tower Hamlets Homes launched on 7th July 2008. A report, known as a section 27 application has been submitted to the Department for Communities and Local Government to apply for consent.

Read the section 27 application report submitted.

Additional information is available on the Tower Hamlets Homes website.

Click on the links below to find out more:

• Why has the council set up Tower Hamlets Homes?
• What are the benefits?
• What is Tower Hamlets Homes responsible for?
• What is the council still responsible for?
• What kind of organisation is Tower Hamlets Homes?
• What it means residents?
• What it means for staff?
• Consulting with residents
• Tower Hamlets Homes - A debate

For further information contact the Resident Engagement Team at Tower Hamlets Homes on free phone: 0800 783 6845, email: residentengagement@towerhamletshomes.org.uk

Why has the council set up Tower Hamlets Homes?

Additional resources are needed to carry out much-needed repairs to homes and estates. The government has set up three ways for councils to obtain extra money: stock transfer, arms length management organisation (ALMO) and the Private Finance Initiative (PFI).
A study of our housing showed that transfer was the best method for Tower Hamlets, as the only option capable of bringing in enough money for all the repairs and improvements needed. The council therefore set up the Housing Choice programme, which has brought in over £422 million for those estates that have agreed to transfer to a housing association.
An ALMO like Tower Hamlets Homes cannot attract as much investment as transfer, but it does offer the opportunity of extra funding while allowing people to stay with the council. Tower Hamlets Homes manages housing services for the council, but the council remains the owner of the homes and is still responsible for policy on rents. Tenants are still council tenants with exactly the same tenancies and leaseholders have exactly the same lease. The difference is that if it achieves a two-star, or good, rating from the Audit Commission, the government will make extra funding available for improvements and repairs if our bid is approved.

What are the benefits?

Tower Hamlets Homes will bring three main benefits for residents - a focus on improving the service, extra money for repairs to homes and real involvement for residents in the running of the organisation.
Extra money: Tower Hamlets Homes brings the potential of additional government investment.  The council is seeking from central government up to £260 million investment for residents' homes. This is dependent on Tower Hamlets Homes achieving a 2 star rating from the Audit Commission (the inspection will be around six months after the ALMO is set up).
Service improvements: The government believes that the separation of management and strategy allows for a much greater focus on delivering services. The experience of ALMOs to date supports this view:

• the first ALMOs have already achieved the Decent Homes standard for their housing - five years ahead of target.
• since the first ALMOs were introduced in 2001, 100,000 homes have been brought up to the Decent Homes standard.
• of the 64 ALMOs set up by councils around the country, 9 out of 10 have received a two-star (good) or three-star (excellent) rating.
• over three quarters of ALMO tenants are satisfied with their housing management - more than council and housing association tenants.

Resident involvement: Tower Hamlets Homes is governed by a board made up of one third residents, and the council will be looking at other ways to ensure that residents have plenty of opportunity to get involved and have their say.

What is Tower Hamlets Homes responsible for?

Tower Hamlets Homes carries out day-to-day management of the housing service under contract from the council, including:

• housing management
• maintenance and repairs
• major works to bring homes up to a decent standard
• collecting rent and service charges and dealing with arrears
• letting homes and dealing with empty property
• handling right-to-buy for the council.

What is the council still responsible for?

The council is still the owner of the homes. It remains responsible for housing policy, including:

• housing strategy for the borough
• policy on rents
• handling of Housing Benefit and rent rebates
• homelessness and housing advice.

The council is also responsible for monitoring the ALMO and ensuring that it provides the services Tower Hamlets requires.

What kind of organisation is Tower Hamlets Homes?

Tower Hamlets Homes is a separate company, wholly owned by the council. The council remains the owner of the homes. The council agreed the terms on which Tower Hamlets Homes manages the housing and monitors it closely through a management agreement.
If for any reason the council is not happy with Tower Hamlets Homes, it could cancel the management agreement and return the management of its houses back to the council. It does not need to seek anyone's permission to do this.
Tower Hamlets Homes is governed by a board made up as follows:

• one third councillors, who would be appointed by Tower Hamlets Council
• one third resident appointments
• one third ndependent members (usually people with expertise in housing, finance, community development, etc).

What it means for residents?

There will be no change in tenancy or lease arrangements for tenants and leaseholders. The stock remains in council ownership. Tenants are still council tenants, with their existing council tenancies, and leaseholders remain council leaseholders, with their existing leases. Tenants’ and leaseholders' rights do not change.
This means that although Tower Hamlets Homes would not bring in as much investment as transfer to a housing association, it is a good option for residents who prefer to stay with the council as their landlord.
Tower Hamlets Homes will enable much greater direct involvement by residents in the housing service. Before this new organisation can be given the go ahead, it must demonstrate that it has resident support and ways of involving residents in decision making. Residents will make up one third of the governing board, along with councillors (one third) and independent members (one third).

What it means for staff?

Staff whose work is in housing management (as opposed to strategy and policy) transferred to the Tower Hamlets Homes under TUPE - i.e. on their existing terms and conditions. Staff terms and conditions will not change and pensions will not be affected.

Consulting with residents

As part of the consultation with residents on proposals to set up the ALMO, Tower Hamlets Homes, the council surveyed residents using a range of methods, including door-to-door and telephone surveys. Overall, these surveysgave up to 36% of residents the opportunity to comment.
The surveys have consistently shown a high level of support for setting up an ALMO. In the final survey, more than 8 out of 10 people (83.23%) who expressed an opinion were in favour of setting up Tower Hamlets Homes.
The final independent telephone survey was commissioned by the council and carried out by an independent market research company, MRUK, with the overall aims of establishing whether people had received information on the proposals, whether they understood the proposals and to assess the level of support. They interviewed 2,000 residents, giving a high degree of accuracy. MRUK confirms that the results can be taken to represent the total tenant and leaseholder population with a high degree of confidence.

• MRUK Surveys Report (pdf 143k)
• MRUK Surveys Questionnaire (pdf 128k)

Tower Hamlets Homes – a debate

Last summer as part of its consultation with residents, the council organised a debate on Tower Hamlets Homes, the ALMO that the council wishes to set up to manage its housing and, potentially, bring in millions of pounds of investment for its housing. Residents and housing specialists debated the issues. Hear what those for and against this proposal had to say. A DVD of the debate is available free, from the council’s consultation and participation team on
Free phone: 0800 783 6845
or email: residentengagement@towerhamletshomes.org.uk