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NIFHA response to Proposals to seek reversal of the reclassification of registered Social Housing providers in NI

By Michael McGilligan
Published on: 5 February, 2017

NIFHA welcomes the Proposals to Seek Reversal of the Reclassification of Registered Social Housing Providers in Northern Ireland and has responded to this consultation.

On Thursday 29th September 2016, the Office for National Statistics (ONS) reclassified housing associations in Northern Ireland from ‘Private Non-Financial Corporations’ to ‘Public Non-Financial Corporations’. Reclassification could potentially have severe consequences without the timely return of housing associations to the private sector and an appropriate derogation in the interim. NIFHA supported and strongly welcomed the swift action of the Northern Ireland Executive and cross-party endorsement of the need to reverse the ONS decision and ensure the independence of the housing association sector.

The risks posed by reclassification of the housing association sector are serious and wide reaching. As the Department for Communities (DfC) notes in its consultation, this could impact on borrowing capacity, supply, community investment and regeneration. Less private finance, fewer new social homes, potentially no shared ownership homes, limited investment in communities and less emphasis on place-making. It would almost certainly change the nature of the sector with its independence, innovation and enterprise at risk if housing associations become part of the public sector.

In our response to the consultation NIFHA made the following key points.

  • The risks posed by reclassification of the housing association sector are serious and wide reaching.
  • NIFHA asks for continued focus and urgency in progressing the legislative and administrative changes necessary to reverse the reclassification decision.
  • We would strongly state that we believe all consents within the regulatory regime should be replaced by notifications.
  • We would note that some of the proposals remain relatively high level with detailed work yet to be carried out in framing what the new legislative provision will look like; it would have been helpful for new definitions or clarifications to be included within the consultation.
  • NIFHA and the housing association sector support robust and effective regulation. We welcome the Department for Communities’ commitment to implementing the new regulatory framework in 2017.
  • The power of the regulator/department to consent to the charging of housing association properties for security must be removed on principle – and as a clear state control – and practice – in that it causes significant delays to securing private finance.
  • NIFHA believes that the Disposals Proceed Fund (DPF) should be removed and housing associations given discretion over how to use funds from sales.
  • NIFHA believes that the reversal of the reclassification of housing associations provides a clear opportunity to future proof current systems by removing any remaining prescription or guidance that is no longer fit for purpose.
  • To prescribe the powers of an independent organisation through statute could justly be interpreted as a state control. It should be for the housing association board to specify its powers and objects, not the regulator or the department.
  • NIFHA believes that the regulator’s inquiry and intervention powers are limited and used only in the circumstance of a breach or possible breach of legal requirements.
  • NIFHA would advocate the removal of a compulsory house sales scheme.

To read NIFHA’s full response, click here.

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