Wales politics

Housing associations alarm over public sector status

Housing Image copyright PA

A group representing Welsh housing associations has reacted with alarm to a move by statisticians to class them as part of the public sector.

Community Housing Cymru (CHC) said it could affect their ability to borrow money and to build new homes.

Ministers in Wales are looking into whether to change the law to resolve the issue.

But the Office for National Statistics (ONS) said there is no impact on the borrowing constraints of the groups.

At the moment not-for-profit housing associations are considered to be in the private sector and can borrow as much money as they can afford, within certain regulations.

But CHC fears if finances were overseen by the UK Treasury the associations' levels of borrowing could be restricted, meaning they would not be able to built as many houses.

Stuart Ropke, Chief Executive of CHC, said: "This may appear to a lot of people as an accounting exercise but the reality is that it could have serious consequences for housing associations and thousands of families on housing waiting lists who are in desperate need of somewhere to live."

'Purely for statistics'

The Newport-based ONS said it had made the reclassification for housing associations in Wales, Scotland and Northern Ireland "purely for the purpose of economic statistics".

"ONS uses agreed international rules to assess whether organisations should be classified to the public or private sector, based on whether government has control of, or liability for, the organisation in question," ONS head of public sector, Derek Bird, said.

"This has no direct impact on the ownership, management structures or borrowing constraints of the organisations concerned.

"It is for the devolved governments, rather than ONS, to consider the impact this classification decision may have on budgeting and fiscal management."

CHC called on the Welsh Government to intervene so that Welsh housing associations can continue to behave like businesses.

'Legislative solution'

A Welsh Government spokesman said: "We are exploring a legislative solution to the issue of reclassification, and housing associations can be confident that it will be resolved.

"This means they will be able to continue to borrow from the private sector in order to help us achieve our target of 20,000 affordable homes in this Assembly term."

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