Housing associations return to the private sector

16/11/2017

Hugo Stephens

Hugo Stephens

Partner

Today Housing 24 reported our welcome to the ONS decision to return housing associations to the private sector – but they are still not free of government control over rent levels.

This u-turn on the decision to classify housing associations in the public sector will help UK plc by removing £63bn from the national debt – and also free up housing associations to work with their local authority partners and others to build the homes the country needs.

For housing associations it means that they are, in theory, no longer bound by some of the public sector legal constraints that act like a dead weight around their necks.

The move will encourage those in the sector who want housing associations to break completely free from government control.

Unfortunately, housing associations will still be bound by their public sector past. Government will continue to control their rent setting. And (although housing associations no longer need consent to dispose of properties) if they do sell social housing homes, they will have to repay the grant relating to them.

Housing associations will also be bound by other public sector controls, including the obligation to procure goods and services via EU compliant procurement processes, and will continue to have obligations under legislation including the Freedom of Information Act.

Housing associations also need to be aware that section 93 of Housing and Planning Act (2016) affecting social housing is now effective from today (November 16).

The regulations reduce the influence local authorities have over private registered providers of social housing. They restrict the percentage level of officers that a local authority may nominate as board members of a private registered provider and remove a local authority’s ability to hold voting rights as a member of a private registered provider.

This will affect all the stock transfer associations in the country who still have their sponsoring local authorities as members and local authority nominated board members taking up more than 24% of the board.

Such associations now have six months to change their constitutions so that they are in compliance with these regulations, and it is likely that they will need their sponsoring local authorities to vote in favour of these changes at the relevant general meetings.

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