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Treasury delays reclassification of NI housing associations until 2020
The UK Treasury has agreed to delay legislation that would shift the debt of Northern Irish housing associations onto the public balance sheet until March 2020, Inside Housing understands.
The move is intended to provide enough time for politicians in Westminster to pass a bill that would permanently prevent the Office for National Statistics (ONS) from reclassifying the sector as public for accounting purposes.
Inside Housing revealed in February that the UK government had agreed to intervene in the continuing absence of a functioning Northern Irish government.
It is understood that Karen Bradley, secretary of state for Northern Ireland, will need to decide whether to abolish the Right to Buy – known in Northern Ireland as the House Sales Scheme – for the Northern Ireland Housing Executive as well as for housing associations.
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The ONS announced in 2016 that UK-wide housing associations would be reclassified as public sector organisations from November 2017.
Ministers in England, Scotland and Wales moved to pass legislation to deregulate housing associations enough for the ONS to reverse its decision, allowing them to remain private bodies.
But Northern Ireland has been without a functioning government for over two years, meaning no such legislation has come forward in the region and so the threat of reclassification is still unresolved.
If reclassification went ahead in Northern Ireland, housing associations’ £1bn of borrowing would be scored against the region’s budget, which civil servants have previously warned could lead to significant cuts in funding for social housebuilding.
Treasury put a derogation – a mechanism to delay laws taking effect – in place to postpone the ONS reclassification of Northern Irish housing associations which expired last month and has now been extended for another year.
A spokesperson for the Department for Communities in Northern Ireland said: “[Northern Ireland Civil Service (NICS)] have drafted legislation to address the issues identified by ONS and which should facilitate a review of the ONS decision to classify the NI housing associations to the public sector.
“Alongside this, the UK government are considering when this legislation could be introduced in parliament on behalf of NICS.”
