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
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.
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