Housing and Planning Bill — House of Lords, 2016-04-18
Topic: Housing
James Younger (Conservative, Centre-right): My Lords, I think we are all agreed that it is imperative that housing associations have the freedom to continue to deliver our country’s much-needed homes. Classification back to the private sector provides them with the ability to access private finance to allow them to continue with their development. These amendments support this aim. Amendments 78A and 133B seek to reduce local authority control over housing associations. The amendments have one aim: to enable the removal of housing associations from the public accounts. As noble Lords will know, the Office for National Statistics took the decision to reclassify housing associations as public bodies, meaning that £64 billion was added to the national debt and the housing association sector was classified as public in the national accounts. Local authority control over housing associations was not one of the reasons why the Office for National Statistics reclassified the sector last year. However, we believe that certain governance arrangements may be seen as public sector control and could jeopardise the reclassification of housing associations I would briefly like to set the scene. Housing associations build around 40% of new homes each year and provide 2.7 million homes for around 5 million people, including for our most vulnerable households. Building new homes and helping people meet their aspirations for home ownership cannot be achieved without access to private finance. I shall now turn to the details of these amendments Amendment 78A relates to the rights of local authorities to nominate housing association board members and act as shareholders. This could allow local authorities, in a minority of housing associations, to block major constitutional changes. Such arrangements are typical in organisations which hold stock that was previously owned by the local authority. Housing associations’ constitutions and the way they are run differ between organisations. Officials in the Department for Communities and Local Government are considering these governance arrangements to assess whether they constitute public sector control. This work is continuing, with the expectation of bringing forward regulations in the autumn. It is for this reason that my noble friend the Minister is seeking secondary powers for the Secretary of State to reduce local authority control over housing associations, where it exists. The final content of these regulations will be informed by the work being undertaken by the Department for Communities and Local Government. Through Amendment 133B, such powers will be subject to the affirmative procedure, so both this House and the other place will have an opportunity to scrutinise the detail of the proposed measures These amendments will not impact on the core objectives of housing associations. We are making these changes to ensure that the Office for National Statistics can move housing associations back to the private sector, where they belong. It is vital that housing associations continue to develop much-needed homes and fulfil their social objectives. To do this, access to private finance is essential. If we do not act now by taking this provision, there is a risk that some housing associations will remain on the public balance sheet. I commend these amendments to the House.