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ONS provisionally reverses reclassification decision
The Office for National Statistics (ONS) has provisionally reversed its decision to reclassify English housing associations as public sector organisations.
However, the ONS is waiting for the UK parliament to pass legislation on the regulation of social housing before it will permanently reclassify housing associations as private sector organisations.
Once the UK has taken steps to deregulate housing associations – included in a current draft bill – the ONS will move £63.5bn of housing association debt back off the public sector balance sheet.
In a letter to the Treasury sent on 31 August and published this week, the ONS said that after looking at draft regulations proposed by the government, it will provisionally reclassify housing associations as private bodies. It said its decision had been endorsed by the Economic Statistics Classification Committee and the director of national accounts and economic statistics.
The government pledged to reverse the ONS’s 2015 decision to classify housing associations as public sector bodies for debt purposes, and has already passed some pieces of deregulation legislation including measures to allow housing associations to sell housing stock and merge with other associations without requiring the regulator’s permission.
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The ONS is now waiting for the UK parliament to pass legislation that will remove council voting rights from the boards of stock transfer housing associations before it will make the reclassification permanent.
Inside Housing has asked the Treasury when this legislation will be passed.
In 60 seconds: the deregulation of English housing associations
The ONS sent a similar letter to the Welsh Government on 31 August, which confirmed that the devolved nation’s own draft bill for regulating social landlords would also result in housing associations being reclassified as private bodies.
The letter stated: “If the bill receives royal assent in its current form, the totality of public sector influence exercised through central government, local authorities and the existence of nomination agreements would not constitute public sector control.”
The situation in Scotland is less advanced, but the ONS has said that it will reassess the classification of housing associations north of the border once certain regulations are passed through Holyrood. The relevant bill is currently at committee stage in the Scottish Parliament, and the committee should make its recommendations in December.
Gavin Smart, deputy chief executive of the Chartered Institute of Housing, said: “Although we have been expecting this decision for some time, it is welcome news. It’s important that housing associations retain their independent status, not least because it means they can secure significant amounts of private finance to bolster public investment in housing.
“We hope this provisional decision is confirmed once the relevant legislation is passed by parliament and for Scotland, Wales and Northern Ireland to see the same outcome.”
