Clarissa Corbisiero-Peters raises concerns about the reclassification of Welsh housing associations.
If I were to talk to you about the role of the Office for National Statistics (ONS) in classifying various sectors of the economy, I’d forgive you for not paying much attention. But if I were to tell you that the outcome of their decision to reclassify Welsh housing associations would mean endangering Wales’ ability to tackle the housing crisis, I’d hope you’ve take notice.
The ONS confirmed today what those of us working in the housing sector had been expecting for many months; Welsh housing associations, along with our counterparts in Scotland and Northern Ireland, have been reclassified as public sector organisations. The decision follows a similar announcement last year by the ONS to reclassify English housing associations. Their decision relates to the amount of control Welsh government can exercise upon the business of housing associations.
The decision refers in particular to Welsh Ministers’ powers to influence the day-to-day running of housing associations, including their powers relating to management and their constitution.
With 90,000 people on housing waiting lists across Wales, housing associations are at the heart of Welsh Government’s housing policy, and the key to delivering the 20,000 affordable homes and tackling the housing crisis. Our sector is about so much more than bricks and mortar. Last year our members contributed more than £2billion to the Welsh economy and provided more than 8,800 full time equivalent jobs across Wales.
I would argue that there has not been a more successful private /public partnership in Wales, with associations leveraging in private investment to deliver the affordable homes we need. Last year, of the 1,923 affordable homes provided by our members, 517 were delivered without any grant from Welsh Government. As a result of the ONS’ decision today, the £2.3bn of borrowing that sits on Welsh housing association balance sheets will now become part of the national debt.
This additional debt, along with debt of Northern Irish and Scottish associations, is a serious enough consideration in itself, but the impacts of the decision could be far more wide ranging.
The housing association sector called for an ambitious plan to tackle the housing crisis in Wales, and we are committed to ensuring Welsh Government can deliver their 20,000 target. But the crux of the reclassification decision means that this target could be in danger. If housing associations remain in the public sector in the long term, it opens the door for Treasury control over borrowing.
Not only should this concern those of us who want to tackle the housing crisis, but those of us who believe that devolution should allow us to continue to make decisions specific to our own needs as a nation.
Housing has followed a distinctly Welsh path since the advent of devolution, with successive Welsh Governments continuing to invest heavily in social housing, but today Wales and the other devolved nations must all look to England for how to clear the latest hurdle in the housing crisis.
The UK Government used a piece of already formed legislation to address the reclassification of English housing associations and while we disagree with other elements of the Housing and Planning Act such as the damaging rent cut, and the introduction of the controversial ‘Pay to Stay’ policy, we would like to see Welsh Government learn lessons from England and act quickly and decisively and to use the bill to end the right to buy in Wales as a vehicle to reverse today’s reclassification decision.