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Housing association status change 'could hit social housing plans'

Published 25/09/2016

The Office for National Statistics is expected to reclassify housing associations in Northern Ireland, Scotland and Wales from independent social businesses to
The Office for National Statistics is expected to reclassify housing associations in Northern Ireland, Scotland and Wales from independent social businesses to "public bodies" later this week

A target to deliver 2,000 new so cial homes every year in Northern Ireland could be dealt a major blow if Stormont does not act swiftly to reverse an anticipated change to the official status of the region's housing associations, the sector's representative body has warned.

The Office for National Statistics (ONS) is expected to reclassify housing associations in Northern Ireland, Scotland and Wales from independent social businesses to "public bodies" later this week. The ONS made the same reclassification with English housing associations last year.

The Northern Ireland Federation of Housing Associations (NIFHA) said the expected move, which will reflect the level of state involvement in the associations, could have major ramifications for the associations and the Stormont Executive.

There are currently 22 associations in Northern Ireland which together own and manage around 47,000 social and shared ownership homes.

The NIFHA said turning associations into public bodies will limit their ability to access the private finance they rely on to build new homes, while it highlighted that the £1 billion of private debt already on their books will automatically be added to the Executive's balance sheet - an addition that would drastically reduce the administration's capacity to borrow money for other initiatives across Stormont departments.

The Government's response to reclassification in England was to changes laws to reduce regulation of the associations, so they could once again be considered independent businesses.

Cameron Watt, chief executive of the NIFHA, said the Executive would have to take a similar approach.

But he warned that the timeframe to make the legislative changes was tight. Mr Watt said he hoped the Treasury would give Stormont a year's grace before registering the associations' accounts on the public balance sheet.

"On September 29, the Office of National Statistics is likely to reclassify local housing associations as public bodies," he said.

"Housing associations are the sole builders of new social homes in Northern Ireland. With 22,000 households in housing stress, the NI Executive is looking to our sector to significantly increase delivery to 2,000-plus starts a year.

"To maximise house building, our sector needs to be independent and able to continue borrowing to match and multiply government funding for new homes.

"Reclassification threatens this and without swift action to reverse it, there could be a significant reduction in the number of new homes housing associations can deliver.

"Therefore, if our sector is reclassified this week, we will be calling on the NI Executive to quickly take the necessary steps to reverse it.

"This will mean promptly bringing forward legislation, and negotiating a derogation with HM Treasury to enable the sector to function normally in the interim period.

"Having engaged extensively with ministers and civil servants ahead of the ONS decision, we recognise they are fully aware of the issues.

"We will work closely with the NI Executive and NI Assembly in addressing the challenges that arise from any sector reclassification. Together, we must protect housing associations' ability to keep providing great homes and thriving communities."

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