Housing associations and co-operatives reclassified to private sector

Registered social landlords in Scotland have been reclassified as private organisations following the enactment of the Housing (Amendment) (Scotland) Act 2018.

The change, which has been confirmed by the Office of National Statistics (ONS), effectively reverses a previous ONS ruling in September 2016 when registered social landlords (RSLs) were classified as public for the purposes of the national accounts.

If the classification had been allowed to stand, all future net borrowing by RSLs would have counted as Scottish Government expenditure.

The ONS said: “Following passage of the Housing (Amendment) (Scotland) Act 2018 and The Regulation of Social Housing (Influence of Local Authorities) (Scotland) Regulations 2018, Office for National Statistics (ONS) has completed an assessment of registered social landlords (RSLs) in Scotland. The review has been completed in the context of international rules laid out in the European System of Accounts 2010 and the accompanying manual on Government Deficit and Debt 2016.

“ONS has concluded that RSLs in Scotland are private, market producers and as such they will be reclassified to the private non-financial corporations (S.11002) sub-sector for the purpose of national accounts and other economic statistics. This classification takes effect from 19 September 2018, the date the regulations came into force. The reclassification has been communicated in a letter sent on 26 September 2018.”

The decision follows close liaison between the Scottish Federation of Housing Associations (SFHA) and the Scottish Government.

ONS has made similar decisions in England (November 2017) and Wales (August 2018) to re-establish the sector as private in other parts of the UK.

Sally Thomas

Sally Thomas, SFHA chief executive, said: “We are delighted that ONS has reclassified housing associations and co-operatives in Scotland as private bodies once more. Had RSLs remained public, it could have meant housing association assets and liabilities would have gone onto the Scottish Government books, possibly meaning that there was an element of Government control over any future housing association borrowing.

“This decision protects the independence of the sector, ensuring an environment where our members can maximise private finance in order to develop much needed affordable housing in Scotland alongside Scottish Government.”

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