Will the government’s Economic Crime Levy actually hurt our ability to give people homes?

At Clarion, we support the principle behind the levy. Economic crime harms communities and undermines public trust. But the levy’s current design, based on total turnover regardless of where it comes from, fails to distinguish between financial institutions and charitable housing providers.

The National Housing Federation (NHF) has shown that some providers will see their levy payments rise 14 times over, forcing them to consider cutting back vital resident support services.

“A measure aimed at tackling criminal activity instead risks redirecting scarce resources away from building new homes, investing in existing buildings and supporting residents”

Housing associations are brought into scope through small but essential services like limited forms of credit support for leaseholders in difficulty or managing the sales of new homes. These activities make up a tiny fraction of our operations, yet attract the same levy rate as major financial institutions purely because the calculation is tied to total turnover rather than risk or purpose.

The unintended consequences are clear. A measure aimed at tackling criminal activity instead risks redirecting scarce resources away from building new homes, investing in existing buildings and supporting residents.

At a time when the sector faces rising costs, building safety requirements and increasing demand, the levy risks becoming yet another pressure point on already stretched budgets.

The way the levy is currently applied simply does not reflect the reality of how housing associations operate or the social purpose we fulfil.

“The fight against economic crime is essential. But so too is the fight to ensure every family has a safe place to call home”

That is why we are calling, alongside the NHF, for proportionate reform. A sector exemption or reduced flat rate would recognise our charitable status and prevent organisations from being penalised for offering low-risk, resident-focused services.

Equally important is replacing turnover as the basis for liability. It is a blunt measure that says nothing about risk, nothing about the purpose of the regulated activities and nothing about the social value created by the organisations it captures.

We are ready to work with government on a solution that maintains the levy’s intent while preventing collateral damage to the affordable housing sector. With revision, the levy can remain effective without hampering the delivery of new homes or the services residents rely on.

The fight against economic crime is essential. But so too is the fight to ensure every family has a safe place to call home. We see daily the difference that secure housing makes by improving health, boosting opportunity and strengthening communities.

Every pound that is inadvertently diverted from this mission and social purpose has real-world consequences. A policy designed to protect society should not come at the expense of those who need that protection most.

Mark Hattersley, chief financial officer, Clarion Housing Group