(Title Image: WLGA)
In September 2016, the Office for National Statistics (ONS) published a review of statistical classifications for registered social landlords (RSLs) – almost entirely made up of housing associations. They recommended RSLs be re-categorised as public sector bodies for economic statistics. This move proved highly controversial for more reasons that one.
Firstly, there’s an argument that as the majority of RSLs’ income comes from the public sector – in capital funding, housing benefits, grants etc. – and that government often has a direct role in their governance, then re-classifying them as public sector bodies is a valid move. RSLs in Wales are all not-for-profit too, so are not strictly motivated by commercial gains (but have undertaken moves to establish themselves in the private housing market).
The argument against – and the one supported by the Welsh Government – is that re-classification could limit RSLs access to private money and have a huge impact on their ability to deliver affordable housing as part of the Welsh Government’s own policy priorities. Also, any borrowing undertaken by RSLs (up to £200million a year) would also be counted as public borrowing against the Welsh Government’s budget.
The Lowdown: Three Key Proposals in the Bill
1. Reform procedures so the Welsh Government has a “hands-off” role
One of the main reasons the ONS decided to recategorise RSLs was the levels of influence government has on them. If passed in its current form, the Welsh Government would no longer be consulted when RSLs want to sell land, neither will it have powers over individual RSL constitutions. The threshold at which the Welsh Government can take enforcement action against an RSL will be raised and will only include matters that are contrary to law, instead of concerns over mismanagement.
2. Limit local authority involvement within RSLs
Local authorities will be limited to 24% of board members for RSLs and local authority members will no longer have to be present at board meetings for those meetings to take place. Local authority members will also be stripped of voting rights.
3. Do enough so the ONS reclassifies RSLs as private sector bodies
It’s hoped that by pulling government out of its role in RSLs, it’ll be enough for the ONS to change their mind.
How much will the Social Landlords Bill cost?
The Bill will save a modest amount of money, but – as said – could have a significant impact on the amount of private money made available to housing associations.
While the Bill itself will cost £33,000 to introduce, the Welsh Government estimate there’ll be a saving of up to £65,000 by streamlining certain processes. Re-classification of social landlords as part of the private sector should enable housing associations (and other social landlords) to access up to £200million a year in private finance – as said earlier.