Freedom of Information: Housing Associations – Parliamentary Written Answer

Mr Stewart Jackson:  To ask the Minister for the Cabinet Office, whether reclassification by the Office of National Statistics of housing associations as public entities will entail their carrying the legislative obligations contained in the Freedom of Information Act 2000; and if he will make a statement.

Matthew Hancock: Registered providers of social housing will not automatically become subject to the Freedom of Information Act as a result of their reclassification.

Housing Associations: Public Sector – Parliamentary Written Answer

Stephen Timms: To ask the Secretary of State for Communities and Local Government, what assessment he has made of the likely effect on house building of the Office of National Statistics reclassifying housing associations as public sector bodies. 

Brandon Lewis: The Office of National Statistics has concluded that housing associations should have been classified as public rather than private since 2008, due to several of the regulatory requirements imposed by the Housing and Regeneration Act 2008 introduced by the last Labour Government. This decision is purely a statistical change. Reclassification makes no material changes to the operation of housing associations. The Government is committed to developing deregulatory measures to help housing associations build more homes and help more people into home ownership.

RIPsnorter of a Housing Debate

On 2 November, The Housing and Planning Bill received its second reading in the House of Commons. The Right To Buy extension, while in the Bill, is subject to a “voluntary” deal offered by NHF and so avoids parliamentary scrutiny and, significantly, Greg Clark the Minister stated that this applied to ALL housing associations including those who voted against the deal despite assurances from David Orr saying they would not!  Yet far more important was the announcement on Friday that the ONS had reclassified housing associations as public sector bodies. Healey asked Clark twice as to when he knew about the ONS reclassification – and twice Clark refused to answer. The NHF was stitched up like a kipper and David Orr sold them down the river with his assurances on independence, on the discretion he claimed they would have and on those voting No to his deal would not have to sell their properties. Read more on the Speye blog.

Housing Associations: Written Statement

The Office for National Statistics (ONS) has altered, with retrospective effect, how private registered providers of social housing (commonly known as housing associations) are treated in the National Accounts. ONS has concluded that housing associations should have been classified as public rather than private since 2008, due to several of the regulatory requirements imposed by the Housing and Regeneration Act 2008 introduced by the previous Government. ONS will now apply this change retrospectively back to 2008. This is purely a statistical change. Reclassification makes no material changes to the operation of housing associations, does not nationalise housing associations and the Government have no plans to impose new controls on the sector – including over spending or borrowing. Housing associations will continue to be able to access those existing Government programmes that have been open to them. Read the full statement on the Parliament website.

'Regulator's RTB Powers May Need Reviewing After ONS Decision'

The government may need to “look again” at the regulator’s proposed powers over Right to Buy to ensure housing associations do not remain public bodies, David Orr has said. This would be to ensure housing associations can escape their public sector reclassification.  He said the powers included in the Housing and Planning Bill would now need to be “looked at very closely”. It follows the ONS decision to reclassify housing associations as part of the public sector, based on regulatory changes introduced in 2008. Mr Orr said he was confident the issues raised by the ONS, particularly the regulator’s power to consent to sales, “would go” in the bill. However, he added that the introduction of a new regulatory standard for home ownership introduced to help enforce the Right to Buy extension would also have to be analysed. Read more on Inside Housing.

Reclassification 'Could Lead To Repricing'

Lenders could push for a repricing of historic loans after the reclassification of housing associations as public bodies, a consultancy has warned. Property consultancy Savills said the Office for National Statistics’ (ONS) decision to bring housing associations onto the national balance sheet last week could constitute “a material change in the market”. This could give lenders an opening to push for a repricing of loss-making, long-term loans signed before the recession, it warned. A briefing note produced after the ONS decision on Friday also warned landlords would likely face controls on new debt from the 2016 Budget onwards. Read more on the Savills website.

Housing Associations Reclassified As Public Sector

English housing associations are part of the public sector for the purposes of national accounts, an Office for National Statistics review has concluded. The reclassification means that housing association debt will be counted as public borrowing, pushing £60bn on to the government’s balance sheet. The decision does not in itself lead to a material change in the way housing associations operate, but it will spark fears that the government would seek to limit or control their borrowing. The ONS review looked at changes introduced over recent years, including the Housing and Regeneration Act 2008 but not recent government policies – including the rent cut, Pay to Stay and the Right to Buy – as they are yet to come into force. Experts have suggested reclassification would remove a potential barrier to the government nationalising associations. Download the report from the ONS website.

CLG Pledges Measures To Overturn ONS Decision

The government has pledged to deregulate housing associations in order to allow them to become private bodies again “as soon as possible”. The CLG responded to the 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. A CLG spokesperson said: “This 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.” Read more on Inside Housing.

Think Tank Issues Association Privatisation Warning

Privatising housing associations would be “the most obvious” government reaction to £60bn of debt being added to the national balance sheet, an influential think tank has warned. Chris Walker, head of housing and planning at Policy Exchange, said nationalisation of housing associations followed by a state sell-off into the private sector could become “a serious option” if the Office for National Statistics (ONS) decides to reclassify housing associations as public bodies. Mr Walker said: “The government does not want to be in a position where it is keeping that debt on its balance sheet. If it is relaxed, it must feel it has got potential to move that money off the balance sheet, which suggests it has got a plan.” Read more on Inside Housing.

ONS Housing Association Status Review Underway

The Office for National Statistics has started a review of whether housing associations should be reclassified as public bodies – a decision which threatens to add £60bn to the national debt.  Most housing associations are currently classified as private corporations, meaning their combined £60bn of borrowing is not reflected on the national balance sheet. But an Office for National Statistics spokesperson has confirmed that a review of this classification is underway – with further detail and a completion date to be published at the end of September. It follows Prime Minister David Cameron describing housing associations as “part of the public sector” in Parliament. Read more on Inside Housing.

ONS Confirms It Will Examine Associations' Status

The Office for National Statistics (ONS) has confirmed it will examine whether to reclassify housing associations as public bodies once the government has released details of its Right to Buy extension. If the ONS decides on reclassification, housing association debt would be counted as public borrowing, pushing £60bn on to the government’s balance sheet.  Jonathan Athow, deputy national statistician for economic statistics at the ONS, said the ONS would ‘certainly’ consider implications for the ownership of associations’ assets and liabilities. In a letter to Labour MP Clive Betts, Mr Athow said the government can submit fully-formed policy proposals to ask the ONS how they would affect the recording of official statistics. Read the letter sent by ONS.

Bedroom Reclassification Could Lead To Refinancing

A top housing barrister warned landlords could trigger a repricing of their stock by reclassifying the number of bedrooms in their property. Dean Underwood, head of the housing team at Hardwicke Chambers said the move, which had been considered by some landlords to prevent tenants under-occupying, was not without risk. ‘Financial institutions are looking for any excuse to refinance loans they have with social landlords, and reclassifying could be one,’ he said. Mr Underwood cast doubt on the strength of recent successful bedroom tax tribunals to survive appeal. Read more on Inside Housing.

When Is a Bedroom Not a Bedroom?

When it’s in a Welwyn Hatfield Council area.  Welwyn Hatfield Council lies in the Constituency of Grant Shapps, former Housing Minister. The Cabinet of Welwyn Hatfield Council have decided to ‘Reclassify Bedrooms’.  According to the minutes of a recent Welwyn Hatfield Community Housing Trust Panel meeting “The Panel recommended that Council homes with one bedroom which was less than 50 square feet (4.65 square metres) be reclassified so that a room of this size or smaller was not classed as a bedroom for welfare reform purposes.

RESOLVED:

That the Panel’s recommendation be approved and Council homes with

one bedroom which was less than 50 square feet (4.65 square metres) be reclassified so that a room of this size or smaller”   Read more on the Michelle Kent blog.

Council Ignores Freud Threat

A council has pledged to legally challenge the government over its stance on bedroom tax reclassifications. Lord Freud said councils found to have reclassified properties without reducing the rent charged would face a cut in their housing benefit subsidy.  Leeds Council has reclassified 837 homes as having one fewer bedroom each, but is refusing to reduce the rent. Peter Gruen, deputy leader of Leeds Council, said: ‘We have taken all the legal advice we have and what we are doing is perfectly legitimate.’  Read more on Inside Housing.

A Hertfordshire council is considering reclassifying small bedrooms in at least 100 homes to help tenants avoid the bedroom tax.

Welwyn Hatfield councillors agreed last week to move the proposal forward as a recommendation to the council’s cabinet for a decision early next month. Welwyn Hatfield Community Housing Trust, which manages the council’s homes for 9,300 tenants, has been visiting all the council’s properties to measure bedrooms. The plan is to reclassify bedrooms which are less than 4.65 square metres in size as a ‘box’ room so tenants will not be liable for the under-occupancy penalty .So far it has identified 100 of the council’s properties that are eligible for ‘reclassification’.

Lord David Freud has threatened to withdraw or restrict housing benefit subsidy to councils which ‘inappropriately’ reclassify properties for bedroom tax purposes

The welfare reform minister, in a letter to council chief executives today, said there have been cases of councils redesignating properties without reducing their rent to reflect a loss of a bedroom. Lord Freud said he expects ‘the designation of a property to be consistent for both housing benefit and rent purposes’. The letter said: ‘Blanket redesignations without a clear and justifiable reason and without reductions in rent, are inappropriate and do not fall within the spirit of the policy. ‘If it is shown properties are being redesignated inappropriately this will be viewed very seriously,’ the letter said. Lord Freud said that where the Department for Work and Pensions suspects properties are being re-designated inappropriately it will commission an independent audit to ‘ascertain whether correct and appropriate procedures have been followed.’ He said redesignating properties without reducing the rent would lead to incorrect housing benefit subsidy claims being submitted to the DWP. 

Council reclassifies homes and offers refunds to help residents hit by bedroom tax

More than 800 homes in Leeds are being reclassified by the city council to help residents cope with the bedroom tax. The local authority has sent 837 letters to households making them aware that the number of bedrooms in their properties are to be redesignated. The council says the welfare changes along with the need to ensure its stock is sustainable has prompted the move. Just under a third of the people in the properties that will be changed are affected by under occupation. Properties have been selected for re-designation on the basis of their build type, design and layout. In addition, any tenants that have lost out on their housing benefits through under occupation of these properties will get a refund backdated to 1 April 2013.

Council Tackles Bedroom Tax With Semantic Solution

Leeds council has come up with a novel way of sidestepping the controversial bedroom tax: reclassifying more than 800 "spare" rooms in its social homes as "non-specific rooms".  The creative wordplay means tenants in affected properties are not classed as underoccupying their homes and do not have to pay a surcharge as a result.   Councillor Peter Gruen said it would cost the council more to evict tenants and rehouse them than it would to simply accept that many could not pay for the underoccupation charge.  Council officials had inspected the housing stock and reclassified any unoccupied ground floor bedrooms as non-specific as well as very small bedrooms, or those which acted as a thoroughfare to another room. He said he hoped that all "fair-minded politicians" across the country would implement the same changes.

Read more on the Guardian website.

Reclassifying Property Size to Avoid the ‘Bedroom Tax’

CIH consider reclassifying bedroom size as a way of avoiding the ‘bedroom tax’.  In the form of Frequently Asked Questions.  Click on the link below.

Reclassification ‘Will Not Hit Rent Hard’

A leading academic has claimed that landlords reclassifying their properties to protect tenants from the bedroom tax would only suffer ‘very limited’ losses.

Professor Steve Wilcox, associate at the University of York, speaking at the Social Housing finance conference in London last week, said he is ‘surprised’ more landlords are not re-designating homes.  Under the bedroom tax, landlords can reclassify properties as having fewer bedrooms so tenants avoid the average £14-a-week under-occupation penalty.  To date, the majority of landlords have ruled this out, citing the resulting loss in rental income and concerns about how it would affect existing lending agreements.  Read more on Inside Housing.