Labour homes gamble hit by funding cut

12.24.25pm BST (GMT +0100) Tue 28th Jul 2009

Labour's strategy to improve Lambeth's council housing has been holed below the waterline following news that a Government minister has withdrawn funding.

The promise of new kitchens and bathrooms, repairs and improvements, used to persuade tenants to vote for Labour's unpopular arms length management organisation (ALMO) has turned into a complete con.

Tenants were promised that hundreds of millions of pounds of government money would be released to make all Lambeth council homes decent if the arms length company Lambeth Living set up to run the borough housing achieved a two star grade from the Audit Commission.

But now new Labour housing minister John Healey has decided to divert the money from struggling ALMOs like Lambeth Living to pay for Gordon Brown's plans to build new affordable housing elsewhere.

The future of Lambeth Living was already shaky. It went live more than a year ago and yet the Government still has not even said how much the borough will receive. The ALMO has been slated this year for poor management in a recent Audit Commission report, leaving it with a mountain to climb if it is to pass a two star inspection. Now, with the promised funding withdrawn, Labour's ALMO is left floundering.

All Lambeth's homes were supposed to have met the Decent Homes standard by 2010. This target has moved even further into the distance with news that not a penny of government money will be released until 2011-2012 at the earliest, and even then nothing is guaranteed.

"This is yet another blow for local tenants following on from the 17% rent increase," commented Liberal Democrat parliamentary spokesperson Chris Nicholson. "Labour said that voting for the ALMO would give them decent homes. Now they will not get decent homes and are lumbered with a failing ALMO. Once again Labour locally and nationally has let Lambeth tenants down."

"Steve Reed and his Labour administration tricked Lambeth council tenants into voting for the ALMO with bogus promises about new kitchens and bathrooms for all," said Lambeth Lib Dem housing spokesperson Cllr Jeremy Clyne. "Labour pinned all their hopes on their desperate ALMO gamble but like the Council's finances the strategy has been left in tatters."