Hillingdon scraps ALMO, councils insource from Capita, £180bn liabilities, bedroom tax cash unclaimed
0Hillingdon votes to scrap ALMO
London Borough of Hillingdon has voted to wind-up its arms length management organisation (ALMO) and bring housing services back in-house. The council expects the plans to cost £300,000 but will save the same amount every year in future. A report to councillors said the case for retaining the ALMO had been weakened due to extra freedoms offered to local authorities, in particular the ability for councils to retain rental income from homes they buy, build or bring back into use to invest in new housing.
Councils insource services from Capita
Two councils have renegotiated their outsourcing deals with supplier Capita to bring some services back in-house. Birmingham City Council says it will save £150m over seven years by running its call centre directly – this was previously run by Service Birmingham, a joint venture run by the council with Capita. In addition, Swindon Borough Council says it will save around £2m per year by providing customer services, finance administration and business support itself. Capita will continue to provide ICT services for both councils.
Long-term council liabilities “total £180bn”
Local authorities in the UK owed more than £180bn in long-term liabilities at the end of the last financial year, an increase of 8.7% on 2012/13, according to new research. Campaign group TaxPayers’ Alliance said that long-term borrowing made up almost £72bn of the liabilities. According to the figures, 38 councils had long-term liabilities equivalent to more than £4,000 per resident, while 73 had no long-term borrowing.
Pension funds commit to growth investment
Six local authority pension funds have announced a joint commitment of £152m to invest in local growth projects. The Greater Manchester Pension Fund will be the largest investor, committing £50m to the venture, with the remainder funded by West Yorkshire Pension Fund, South Yorkshire Pension Fund, Merseyside Pension Fund, West Midlands Pension Fund and East Riding Pension Fund. The cash will be managed by financial fund manager Bridges Ventures, SME lender Boost & Co, and Midven, a Birmingham-based venture capital manager.
NAO voices transparency worries
The increase in non ring-fenced funding has made it more difficult to assess the impact of spending by local authorities, according to the National Audit Office. The watchdog said that in 2013/14 eight central government departments gave a total of £36.1bn to councils to deliver core functions. Of this £25bn was not ring-fenced, with a further £7.8bn also not ring-fenced but targeted on specific activities. Auditor general Amyas Morse said: “The DCLG’s arrangements to assure Parliament over funding are in transition, but the department should do more to understand whether the system for funding local government is effective in delivering value for money.”
Councils leave bedroom tax cash unclaimed
Councils failed to claim more than £20m allocated by central government to cushion the effect of government welfare changes in 2013/14, according to the Department for Work and Pensions. Figures released by the department showed that 63% of local authorities paid out less than their total Discretionary Housing Payment allocation to tenants. This meant £13.3m remained from the initial DHP fund, with a further £7.1m left over from a top-up fund. The cash was made available to authorities to top-up housing benefit to people affected by the “bedroom tax” and benefit caps.
BBA calls for challenger bank action
The British Banking Association says that challenger banks would benefit from more investments from local authorities. In a report published this week, it said that large banks have an advantage due to their size, underlined by the fact that large banks are the recipients of government deposits (local and central) which “tends to give them larger deposits and lower cost funding”. The BBA called for reform of funding so that challengers have equal access to government deposits. However, experts pointed out that there are currently no restrictions on councils lending to such banks.
Manchester in regeneration JV
Manchester City Council has announced plans to form a joint venture with investment company Abu Dhabi United Group to regenerate areas in the east of the city. The new Manchester Life Development Company will aim to build 6,000 homes over ten years in the Ancoats and New Islington districts. The council says it hopes to raise up to £1bn to finance the redevelopment, which will mostly contain homes for private rent.
Osborne “prepared for further devolution”
Chancellor George Osborne has signalled his desire to devolve further powers and budgets to cities adopting mayoral governance. In a speech delivered in Manchester, Osborne said that he wanted to start a conversation about giving cities similar powers to those enjoyed by the mayor of London. “A true powerhouse requires true power,” Osborne said.
Plymouth creates school meals vehicle
Plymouth City Council has voted to create a new joint venture to provide hot school lunches for schoolchildren. The new cooperative will be owned 49% by a group of 70 schools and 51% by the council. Staff will be transferred from the council’s education catering service to the co-op.
Yorkshire councils to share services
East Riding of Yorkshire Council has agreed plans to begin service sharing arrangements with neighbouring Scarborough Borough Council. The council’s cabinet voted this week to progress plans to share payroll services, training, human resources and benefits from 2015. The meeting also agreed that officers should pursue discussions on sharing ICT services and procurement along with tourism.
