- Part of:
Housing Bill to be introduced.
Legislation which will help support the delivery of 50,000 new affordable homes is to be introduced by the Scottish Government.
By ensuring Registered Social Landlords (RSLs) can be classified as private bodies, the bill will ensure that RSLs can borrow money privately in addition to the Scottish Government’s committed investment of £3 billion in affordable housing.
The announcement follows today’s decision by the Office for National Statistics (ONS) to classify RSLs as public bodies in the national accounts. The ONS came to this decision in light of a number of powers that the Scottish Housing Regulator can exercise over RSLs. The ONS came to the same decision in regard to England’s RSLs last year and similar legislation was introduced at Westminster.
Commenting on this decision, Housing Minister Kevin Stewart said:
“The First Minister made clear in Programme for Government that we are committed to RSLs remaining classified as private bodies in the national accounts. In light of today’s announcement by the ONS, the Government will bring forward a Bill to adjust the powers of the Scottish Housing Regulator. This will allow the ONS to reclassify RSLs to the private sector
“Reclassifying RSLs to the private sector is important as it will ensure their borrowing continues to be treated as private borrowing, which can be used to augment the £3 billion of public investment that the Government is providing to support the delivery of 50,000 new affordable homes in the next five years.
“I am pleased that the Scottish Government has reached an agreement with the HM Treasury that will allow progress in delivering this programme to continue whilst the position on classification is being resolved.”
The Scottish Government has discussed its plans to legislate with the Regulator, and bodies representing RSLs, their tenants and lenders, and confirmed that it would continue discussions with them during the development of the Bill.
A registered social landlord (RSL) is a housing association or housing cooperative that is registered with the Scottish Housing Regulator. RSLs are not-for-profit organisations that aim to provide quality, low cost accommodation for people who need it the most.
The ONS announced today that RSLs should be classified as public bodies in the national accounts. At present, RSLs are classified as private sector bodies.
If this classification is allowed to stand, all future net borrowing by RSLs would count as Scottish Government expenditure. The Scottish Government is committed to providing over £3 billion over five years to support delivery of 50,000 new affordable homes. RSLs are estimated to borrow around £300 million a year as private bodies, to support their house building programmes.
The Scottish Government will study the reasons behind the ONS decision and draft a Bill that will allow the ONS to reclassify RSLs to the private sector. It expects that its Bill will contain measures similar to those in the Housing and Planning Act 2016, which addressed the same issue in England when the ONS reclassified housing associations there to the public sector. As foreshadowed in the PfG, these measures are likely to:
- Remove the need for the Regulator’s consent to the disposal of assets by RSLs;
- Limit the Regulator’s ability to appoint members and managers to RSLs;
- Remove the need for the Regulator’s consent to the restructuring, voluntary winding up and dissolution of RSLs.