Cameron: 'Public' associations must improve

Mr Cameron was responding to a question on the social housing rent cut from new Labour leader Jeremy Corbyn at prime minister’s questions this morning.

The prime minister said it is “vital we reform housing associations”, claiming social landlords “are part of the public sector that haven’t been through efficiencies, haven’t improved their performance and I think it’s about time that they did”.

The Office for National Statistics currently classifies housing associations as private bodies, and a reclassification would see around £60bn of debt added to the national balance sheet.

Mr Cameron was responding to a question from Mr Corbyn, submitted by “Stephen who works at a housing association”, warning the rent cut would force his organisation to make 150 redundancies by March.

The rent cut, announced at the Budget in July, will see landlords forced to reduce rents by 1% a year for four years, tearing up a previous agreement to increase by the consumer price index of inflation plus 1% for 10 years.

Mr Cameron said: “What I would say to Stephen and to all those working in housing associations and doing a good job is that I think for years in this country we had a merry-go-round where rents went up, housing benefit went up and so taxes had to go up to pay for that.

“I think it’s vital though that we reform housing associations and make sure they are more efficient, frankly they are part of the public sector that haven’t been through efficiencies, haven’t improved their performance and I think it’s about time that they did.”

Mr Corbyn, who asked questions submitted by members of the public, said Stephen had asked: “The cut in rents will mean the company he works for will lose 150 jobs by next March because of lack of funding to carry on with repairs, down the line it will mean worse conditions, worse maintenance and fewer people living in it.

“Does the prime minister think it’s time to reconsider the question of the funding of the administration of housing as well as the massive gap between what’s needed and what’s being built?”

The exchange came as Labour sources confirmed the party will not oppose the rent cut.

The prime minister’s press office has been contacted for comment.

UPDATE: 16.09.2015 at 4.00pm

Ruth Davison, director of policy and external affairs at the National Housing Federation, said: “Housing associations are emphatically not part of the public sector – they are the most successful partnership between state and private enterprise in the UK’s history, having brought £76bn in private investment to the table over the past 30 years… As independent organisations, they are becoming ever more efficient.”