Local Government Casestudies

Newham Homes: Ahead of the Game(s)

The Borough of Newham lies deep in the east end of London and is classed as one of the more deprived areas of the country, with a majority of the population being ethnically non- British. There are around 25,000 HRA properties (with benefit rates running well over 60%) and an additional 3,500 private leased properties used for Homelessness.

The Authority is however at the forefront of innovation to improve matters and has been spurred on by acting as a host borough for the 2012 Olympic and Paralympic Games. This will speed up the regeneration plans and provide a lasting legacy in terms of jobs and sporting and cultural facilities.

During the last 18 months the developments have included the signing of a PFI for improving 1000 properties in Canning Town, the innovation of a small scale voluntary transfer of 450 properties to replace properties that have switched to private leasing and also, the creation of an ALMO (Arms Length Management Organisation) to manage the council properties, hopefully releasing funding of £250m to achieve the decent homes standard. All of this requires systems, budgets and accounts that are robust and able to reflect the changing arrangements.

“This gives a challenge from an accounting point of view to ensure that correct accounting treatment is in place and correct technical advice is given” says Jim Merriman (pictured), a public sector consultant who arrived in the Council in September 2004 to cover the post of technical housing finance manager, managing a section being devolved from the centre to the Housing Service. The remit was to provide technical knowledge on the Housing Revenue Account, review previous practices, looking particularly at housing subsidy and, bring together the final accounts.

Jim worked closely with our consultant Stephen King, who had moved from the Authority to set up the finance and accounting arrangements for the new ALMO. This has involved negotiating the management agreement, training new board members, setting up independent accounting arrangements and, selecting insurers and auditors amongst many other tasks in time for going live on the 1st December 2005 as Newham Homes Ltd.

With the departure of many in-house staff to the ALMO, the technical finance section was strengthened by the addition of consultant Barry Stratfull from April 2005; his role being not only to support Jim but also to provide high quality accounting support to the section in the transition period.

Newham Homes Ltd first accounting period has now closed and a key task is to achieve a clean audit report. Mr King, Acting Director of Finance and Resources says “It has been a fascinating as well as a hard working year setting up and running a new organisation. It has been made easier however having our very professional consultants as opposite numbers on the Council side.”