Magazine article Public Finance

Housing Associations to Become Private Again

Magazine article Public Finance

Housing Associations to Become Private Again

Article excerpt

Housing associations will be deregulated, after they were reclassified as public bodies, communities secretary Greg Clark has pledged.

The accountancy reclassification by the Office for National Statistics on 30 October increased public sector net debt by an estimated £60bn.

The ONS's move was in response to international guidance in the 2010 European System of Accounts, which came into force in September 2014, and the impact of the Housing and Regeneration Act 2008, which established the Homes and Communities Agency. It was not linked by the ONS to government plans to extend the Right to Buy to housing associations.

Because of this decision, housing associations that are private registered providers - registered with the Homes and Communities Agency - are now classified as public non-financial corporations. This is because the act gave the government consent powers over disposals of social housing assets, and power to direct the use of disposal proceeds, as well as powers over the management of a registered provider through the HCA.

Clark said the government will not impose additional spending or borrowing constraints on housing associations following the change.

Instead, the government will seek to return the classification to the private sector through "a package of deregulatory measures" to keep housing associations independent of the government. …

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