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29 September 2016

The Office for National Statistics reclassify housing associations in Wales

The Welsh Government’s target of building 20 thousand new homes by 2021 is under threat following the decision of the Office for National Statistics (ONS) to reclassify housing associations in Wales.

Community Housing Cymru,(CHC) says Ministers need to take decisive action and put legislation in place to reverse today’s decision.

Housing association are independent organisations. However the ONS have reclassified them as public sector bodies because of the level of state involvement in the way they operate.

The decision, which also affects Scotland and Northern Ireland, comes a year after the ONS changed the classification of English housing associations.

Stuart Ropke, Chief Executive of CHC, said the sector is very concerned about the impact of the ONS’s decision. He added: “This may appear to a lot of people as an accounting exercise but the reality is that it could have serious consequences for housing associations and thousands of families on housing waiting lists who are in desperate need of somewhere to live.”

Welsh Government is looking to housing associations to help achieve its ambitious target of providing 20 thousand affordable homes. The ONS ruling could affect their ability to borrow money for future schemes while their combined debt of £2.5 billion will be added to the national accounts.

It could also lead to the UK Treasury being able to exercise control over the private borrowing of housing association, which supports their work to build new homes in Wales. This would also water down the ability of Welsh Government to determine housing policy, which is devolved in Wales.

CHC and its members are calling on Welsh Government to follow the lead of the UK Government by taking immediate steps to reverse the decision. Measures could be included in the forthcoming legislation to end the right to buy scheme in Wales.

Stuart Ropke said: “Our members provide nearly 160,000 homes to the people of Wales, and employ more than 8,800 people. Last year alone we contributed more than £2 billion to the economy of Wales.

Housing associations which up until today have operated as independent businesses are arguably the most successful public/private/third sector partnerships in the UK. They share the ambitions of Welsh Government to build 20,000 affordable homes over the assembly term. However we cannot underestimate the challenge today’s decision presents to achieving this. If we are to continue building homes for the people of Wales we need the support of Welsh Government and opposition politicians in reversing the ONS’s decision as soon as possible.”

You can read CHC's in-depth briefing on ONS's reclassification of Welsh housing associations here: