The Office for National Statistics (ONS) yesterday confirmed that Housing Associations in Scotland, Wales and Northern Ireland are to be reclassified from private sector bodies to Public Non-Financial Corporations.

The reclassification would result in the debt of Housing Associations being counted as public borrowing and could raise concerns over government-imposed restrictions on the borrowing ability of these bodies.

This issue has been foreseen in Scotland with the Scottish Government setting out in their Programme for Government 2016/17 plans to introduce the Housing (Amendment) Bill. The Bill would reduce government controls over Housing Associations, allowing ONS to revisit their decision and protect the private sector classification of these bodies. Similar provisions were made in light of the ONS reclassification of Housing Associations in England last year through the Housing and Planning Act 2016.

There will be no immediate impact of the decision on Housing Associations as the Scottish Government is in the early stages of considering the proposed Bill. Meanwhile, the Bill is expected to make the following changes:

  • Remove the need for the Scottish Housing Regulator's consent for the disposal of assets
  • Limit the Regulator's ability to appoint members and managers
  • Remove the need for the Regulator's consent to the restructuring, winding-up and dissolution

Interesting questions arise, as to whether, depending on the final terms of the proposed legislation, the changes being brought in to ensure the protection of private sector classification would impact upon the treatment of a Housing Association as a "body governed by public law" for public procurement purposes.

Further updates will follow as matters develop.

© MacRoberts 2016

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