Housing associations fight ONS reclassification decision

October 3, 2016 / Isla MacFarlane
Housing associations fight ONS reclassification decision

Housing associations in Scotland, Wales and Northern Ireland have all been mulling the potential impact of the Office for National Statistics (ONS) decision to reclassify housing associations as public sector bodies.

“We are calling for a timely and measured response from the NI Executive and NI Assembly to reverse the decision, ensuring that work to provide new homes in the social sector is not negatively impacted in the interim,” said Nicola McCrudden, Director of CIH Northern Ireland. “However, any response must be proportionate and seek to protect the good work the Department for Communities have already undertaken on the new regulatory framework.

“We believe that any response should look to protect as far as possible the stated intentions for a regulatory system that protects tenants’ interests and provides them with an empowered voice, whilst enabling housing associations to innovate and continue to contribute more homes to communities in Northern Ireland.”

Housing associations in Wales believe that the Welsh Government’s target of building 20,000 new homes by 2021 is under threat following the decision. Community Housing Cymru (CHC) says that Ministers need to take decisive action and put legislation in place to reverse the decision.

Housing associations believe that the ONS ruling could affect their ability to borrow money for future schemes while their combined debt of £2.5 billion will be added to the national accounts.

It could also lead to the UK Treasury being able to exercise control over the private borrowing of housing association, which supports their work to build new homes in Wales.  This would also water down the ability of Welsh Government to determine housing policy, which is devolved in Wales.

“Our members provide nearly 160,000 homes to the people of Wales, and employ more than 8,800 people,” said Stuart Ropke, CEO of CHC. “Last year alone we contributed more than £2 billion to the economy of Wales. Housing associations which up until today have operated as independent businesses are arguably the most successful public/private/third sector partnerships in the UK.”

Meanwhile, in Scotland, Legislation which will help support the delivery of 50,000 new affordable homes is to be introduced by the Scottish Government. By ensuring Registered Social Landlords (RSLs) can be classified as private bodies, the bill will ensure that RSLs can borrow money privately in addition to the Scottish government’s committed investment of £3 billion in affordable housing.

“The First Minister made clear in Programme for Government that we are committed to RSLs remaining classified as private bodies in the national accounts,” Housing Minister Kevin Stewart said. “In light of the by the ONS, the Government will bring forward a Bill to adjust the powers of the Scottish Housing Regulator. This will allow the ONS to reclassify RSLs to the private sector.

“Reclassifying RSLs to the private sector is important as it will ensure their borrowing continues to be treated as private borrowing, which can be used to augment the £3 billion of public investment that the Government is providing to support the delivery of 50,000 new affordable homes in the next five years.”

In September, the ONS undertook a review of the statistical classification of registered social landlords and housing associations in Scotland, Wales and Northern Ireland. This followed a similar review into private registered providers (PRPs) of social housing in England, concluded in 2015. The ONS concluded that registered providers of social housing in Scotland, Wales and Northern Ireland are public, market producers and as such will be reclassified to the Public Non-Financial Corporations sub-sector for the purpose of national accounts and other ONS economic statistics.

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