DCLG pledges measures to overturn ONS decision

The Department for Communities and Local Government (DCLG) responded to today’s Office for National Statistics (ONS) decision to reclassify associations as public bodies by stating it is committed to “ensuring associations continue to be recognised as independent organisations”.

The ONS decision means that associations’ £60bn of debt will be pushed onto the public balance sheet.

The ONS decision was based on changes introduced by the Labour government’s Housing and Regeneration Act, which introduced new powers for the regulator and a rent standard. It did not take into account recent policies announced by the Conservative government, including Pay to Stay, the Right to Buy extension or the rent cut.

Sector figures had speculated that reclassification would prompt the government to control housing association debt, or nationalise them before selling off their assets. 

However, a DCLG spokesperson said: “This statistical matter relates to an historical legislative change, made by a previous government, which came into effect over eight years ago and makes no difference at all to the way housing associations run themselves and imposes no new controls or rules.

“We will bring forward measures that seek to allow housing associations to become private sector bodies again as soon as possible.”

The government is already planning deregulatory measures as part of the Right to Buy deal with housing associations. It said it will work on a “package of measures… that aims to overcome the reasons for the ONS’s retrospective decision as quickly as possible.”

The spokesperson said the change does not make any material changes to the way associations operate nor does it give the government new powers over associations or impose borrowing controls.