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Housing associations' reclassification to be reversed amid social homes concerns

Published 29/09/2016

The Executive agreed to reverse housing associations' status reclassification
The Executive agreed to reverse housing associations' status reclassification

The Stormont Executive has agreed to reverse a reclassification of housing associations' status amid fears the change could slash the number of new social homes built every year.

The Office for National Statistics (ONS) has reclassified housing associations in Northern Ireland, Scotland and Wales from independent social businesses to "public bodies".

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

Turning associations into public bodies would put tighter limits on their ability to access the private finance they rely on to build new homes.

The move would also see the £1 billion of private debt already on the associations' books 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.

English housing associations were reclassified as public bodies last year and the Government's response was to change laws to reduce regulation of the bodies, so they could potentially be once again classified as independent businesses.

Stormont Communities Minister Paul Givan and Finance Minister Mairtin O Muilleoir have signalled a willingness to adopt the same approach in Northern Ireland.

In the meantime, the Executive will ask the Treasury for an interim derogation on the reclassification to give them time to act.

"Housing associations make an invaluable contribution to the social housing sector in Northern Ireland and it is vital that they continue to do so," said Mr Givan.

"This is why the Finance Minister and I presented a joint paper at today's Executive meeting, which they have approved, seeking a reversal of the ONS decision to reclassify NI housing associations, including amending legislation where appropriate.

"The Executive is committed to providing suitable homes for all and we will now work together to find the best way forward to allow investment to continue."

Mr O Muilleoir added: "Having a secure and stable social housing sector is a key cornerstone of our civic society. We need to take all measures necessary to ensure that the sector has stability to invest and grow.

"Today's decision, if left unaddressed by the Executive, would change the budgeting rules and could result in an annual shortfall of almost £100 million in relation to social and affordable housing. That's why we plan to seek a derogation to prevent this. "

The Northern Ireland Federation of Housing Associations (NIFHA), which warned that reclassification could threaten the 2,000 per year target of new social home builds, welcomed the Executive decision.

Cameron Watt, NIFHA chief executive, said: "NIFHA is delighted that the NI Executive has acted swiftly and decisively to seek a reversal of the ONS decision to reclassify NI housing associations as public bodies.

"Together, government and housing associations have a strong track record of delivering social and affordable homes. The Executive's decision is vitally important in sustaining this successful partnership."

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