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Interim measures to prevent housing associations in Northern Ireland being reclassified as public bodies will be extended for another year as the coronavirus crisis delays legislation.
This week the UK Treasury agreed to extend a derogation of postponing the sector’s debt being shifted to the public sector balance sheet until March 2021, Northern Ireland’s Department for Communities (DfC) has said.
Ministers in Northern Ireland previously announced plans to bring forward a bill reducing state influence over housing associations enough to remove the threat of reclassification by the summer.
But with governments now focused on tackling the COVID-19 pandemic, temporary measures have been prolonged until the Northern Ireland Assembly is able to pass the legislation.
A spokesperson for the DfC told Inside Housing: “The Department for Communities was informed on 31 March 2020 that HM Treasury has agreed to the extension of the arrangement to 2020/21, whereby annual housing association borrowing does not impact on the department’s budget.”
Housing associations in Northern Ireland have been threatened with reclassification since the Office for National Statistics (ONS) announced its intention to move the entire UK-wide sector to the public balance sheet for government accounting purposes in 2016.
If it went ahead, the £1bn of debt held by housing associations in Northern Ireland would be scored against the region’s budget, severely hampering their ability to borrow for development.
Ministers in England, Scotland and Wales quickly moved to pass legislation to deregulate housing associations enough for the ONS to reverse its decision, but no such action was taken in Northern Ireland because of a three-year political deadlock that ended in January.
The Treasury put in place a derogation – a mechanism to delay laws taking effect – to postpone the ONS’ reclassification of Northern Irish housing associations, which was initially set to expire at the end of March.
Ben Collins, chief executive of the Northern Ireland Federation of Housing Associations (NIFHA), said: “This is a welcome development, as the minister understandably is fully focused currently on dealing with COVID-19.
“The department has assured us that they remain committed to passing the legislation to enable reclassification to be reversed.
“However, we appreciate that this will have to wait until the immediate COVID-19 crisis is over.”
NIFHA said the DfC also confirmed that interim measures to extend welfare mitigation payments insulating the region’s social tenants from the bedroom tax will be put in place.
Communities minister Deirdre Hargey has promised to introduce legislation formally extending the payments but the 31 March deadline was missed amid the coronavirus emergency.
Patrick Thompson, deputy chief executive of NIFHA, said: “Thousands of people who are already struggling to keep a roof over their heads faced the prospect of having to make up the shortfall in their rent, for example if the mitigation payments ended.
“NIFHA welcomes the interim measures, which will ensure that these people continue to be supported.”