Industry news


Government awaits ONS decision on deregulation changes


not set a formal date for completing a review of the sector’s public sector status. ONS reclassified associations as public sector


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bodies in 2015, a decision that moved their £60bn of loans onto the national balance sheet. The Government has been desperate to change the classification of HAs so their borrowings can be treated as private sector debts. The Homes & Communities Agency has taken


various measures to lighten the regulatory burden on associations but the ONS has refused to say when a review will be undertaken.


Complications


What could make the eventual outcome difficult to predict is that while associations no longer have to obtain the HCA’s prior consent for actions like rule changes, mergers and property disposals, they still have to advise the regulator after actions have taken place.


he Office for National Statistics is monitoring the changes made to housing association regulation, but has


HAs are also very reliant on the public purse


with housing benefit paying roughly half of all rental income. The HCA is also issuing strongly worded general advice over such issues as the need to consult tenants prior to property disposals and the importance of strong oversight by boards. In a further complication, the Charity


Commission has publicly stated that charitable housing associations – roughly one third of the total – will now have to obtain their prior consent instead. Previously this was not necessary if another organisation had oversight responsibilities.


Benefits


The National Housing Federation is lobbying for the administrative burden of regulation to be removed completely, with HA boards left in charge. In a briefing sent to members, the NHF said:


“The Federation is concerned that this has the potential to increase the regulatory burden on affected organisations, delay the implementation of active asset management strategies, and overwhelm the resources available to the Charity Commission.” The trade body said it is seeking a solution


that would protect charitable assets while also ensuring all housing associations benefit from deregulation. As the Charity Commission may be looking at


a self-certificating system, the NHF position is potentially an over-reaction. Many HAs sought charitable status to reduce their tax liabilities and to gain other advantages, such as exemption from enforced asset sales.


Government opens talks on future rent policies


Civil servants are talking with representatives of the social housing sector over possible rent setting policies from 2020, once the current round of annual cuts comes to an end. Informal meetings have taken place with


various groups, with the emphasis on listening to what housing associations think could work. While the National Housing Federation is


asking for complete freedom in rent setting, the Government is fearful of the impact this could have on the welfare budget. However, it appears there is recognition that


the current policy needs to be relaxed, with housing associations given greater incentives to increase their output of new homes. DCLG and the Treasury are understood to not share a


common view at present. Options discussed are understood to have


included a continuing freeze, a straightforward inflation link, a more complex productivity and rental increase formula.


“There is recognition that the current policy needs to be relaxed, with housing associations given greater incentives to increase their housing output“


Cabinet rejects recommendation over RTB funding


The Government has rejected a select committee’s recommendation that the Right to Buy for housing association tenants should be funded from taxation rather than by a levy on local councils. Under current policy, HA tenants are able


to purchase their homes at a discount funded by the sale of high-value council properties in the area. This has put a considerable strain on the relationships between councils and housing associations, with less co-operative working on new housebuilding deals. Council leaders have been critical of


housing associations for being too keen to cut deals with the Government, while ignoring the impact of cuts on the incomes of both councils and their residents. The problem has been compounded by low rates of replacement to date with only about one new affordable home built for seven homes sold under the RTB. The Communities and Local Government


Select Committee published a report earlier this year calling for funding for the Right to Buy extension to housing association tenants.


Asset sales


But in its response to the committee, the Department for Communities and Local Government has said it “does not accept this recommendation”. “We believe in the principle that public


policy should usually be funded by central government, rather than through a levy on local authorities, especially as the impact of this levy will fall only on some local authorities, yet will be applied nationally,” the CLG Committee report said. It argued that because only councils with


retained housing stock would be eligible to pay the levy by selling off these assets, the effects of the extension will be “far greater” in some areas than others. London in particular is seen as a problem area. However in its response, the DCLG said:


“We made a clear commitment to fund the extension of RTB discounts to HA tenants by requiring councils to manage their housing assets more efficiently, with the most expensive properties being sold off and replaced as they fall vacant. When there is an increased need for


housing across the country, it makes no sense for a local authority to keep hold of higher-value vacant council homes when it could sell them to fund additional housing and the extension of Right to Buy discounts to housing association tenants, which will also create more affordable homes.”


www.housingmmonline.co.uk | HMM May 2017 | 5


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