Reclassification of housing associations makes no material change: Clark

The decision by the Office for National Statistics (ONS) to reclassify housing associations as part of the public sector will make “no material change” to their operation, the Communities Secretary Greg Clark has insisted.

In a written material statement issued today [2 November] Greg Clark said: “The Office for National Statistics (ONS) has altered, with retrospective effect, how private registered providers of social housing (commonly known as housing associations) are treated in the National Accounts.

“ONS has concluded that housing associations should have been classified as public rather than private since 2008, due to several of the regulatory requirements imposed by the Housing and Regeneration Act 2008 introduced by the previous Government. ONS will now apply this change retrospectively back to 2008.”

This was purely a statistical change, the Communities Secretary argued. “Reclassification makes no material changes to the operation of housing associations, does not nationalise housing associations and the Government have no plans to impose new controls on the sector – including over spending or borrowing.”

The minister added that housing associations would continue to be able to access those existing Government programmes that have been open to them, and that the Government remained committed to delivering 275,000 new affordable homes.

“Housing associations are voluntary organisations and we are committed to reflecting their historic voluntary ethos and strongly believe they should continue to be independent of government,” Clark said.

“That belief is reflected in our decision to extend Right to Buy to housing association tenants by accepting a voluntary offer from the sector rather than implementing the policy through legislation.”

The Communities Secretary said the Government was also committed to developing deregulatory measures to help housing associations build more homes and help more people into home ownership.

A package of deregulatory measures will be brought forward to “ deliver this commitment while also aiming to return housing associations to the private sector in the future”.

The regulatory system would continue to ensure the good governance and financial viability of the housing association sector, retaining the confidence of lenders, the Communities Secretary said.

Clark added that he would work with the housing association sector, the Social Housing Regulator and other stakeholders to finalise the deregulatory measures, with a view to delivering them through the Housing and Planning Bill.

Responding to the ONS announcement last week (30 October), David Orr, chief executive at the National Housing Federation, said: “We are disappointed that the ONS has decided to reclassify housing associations as public bodies. Reclassification could mean fewer new homes are built at the time of a national housing crisis.”

“We therefore welcome the Government’s commitment to take the necessary steps through deregulatory measures in the Housing Bill to address the issues raised in this decision. Our deal on a voluntary Right to Buy is an example of how the sector and Government can work together to strengthen the independence of housing associations.”