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Councils to lose voting rights and have board membership limited
Councils will lose voting rights at stock transfer housing associations and have their board member representation limited to less than a quarter, under new deregulation measures introduced by government.
The government quietly put legislation introducing the changes to parliament last week. They will affect dozens of stock transfer housing associations.
They are among the last of a package of measures that the government is bringing forward to reduce government control and remove housing associations from the public sector balance sheet.
Under the proposals, dubbed The Regulation of Social Housing (Influence of Local Authorities) Regulations 2017, councils will lose powers of veto over housing associations and the right to vote at general meetings.
They will also have board membership limited to a maximum of 24% of the associations’ boards.
This second change will force boardroom reshuffles at many housing associations up and down the country which were established with a third of local authority membership.
Councils also often held powers of veto over mergers and restructures which will disappear under the new regulations.
While a move to restrict council influence over stock transfer housing associations has long been trailed, the announcement of these regulations is the first time details have been revealed.
Ian Davis, a partner in the housing and regeneration team at law firm Trowers & Hamlins, said the changes were “at the fuller end” of what had been expected.
“With the exception of some who already made alterations in anticipation of the regulations coming through, most [stock transfer] housing associations are going to have to make changes to their constitution as a result of this,” he said.
Councils have previously described the proposals as a “backward step” which risks “breaking the fundamental relationship with tenants”.
The government has been seeking to reduce state control over housing associations after the Office for National Statistics reclassified them as part of the public sector in 2015 due to the level of government control over the sector, adding £60bn of debt to the national books.
To reverse this, changes to the housing regulator’s powers came into force in April. These latest regulations, introduced under powers in the Housing and Planning Act, mark the final step.
The regulations require approval from both houses of parliament and will come into force the day after they are approved.