ONS take £70bn of Housing Association debt off Government Balance sheetMake Text Bigger
In 2015 the Office for National Statistics (ONS) decided that Housing Associations were under such direct levels of control by the government they could no longer be classified as charities or private businesses and so added their debt to government borrowing.
However, new regulations going through Parliament mean the government have a sufficiently ‘hands off’ approach to Housing Associations that the ONS can take the £70bn of debt off the national balance sheet.
The question is will this allow or encourage Philip Hammond in his Budget to borrow directly for building homes?
The Government has said the change will allow Housing Associations more freedom to fund new housing projects.
The National Housing Federation representing Housing Associations said: “This change will allow them to build on their strong track record and secure the long term finance needed to build even more affordable homes.”
Sajid Javid, the Communities Secretary, issued a veiled warning to the Chancellor for the budget that this would only lay the foundation for more homes to be built and said: “There are many, many faults in our housing market, dating back many many years. If you only fix one you will make some progress but not enough. This is a big problem and we have to think big.”
Jeremy Corbyn was critical of the announcement considering it just fiddling with the figures and that the government had no coherent plan to fix the housing crisis.
There are currently over 1.2 million families in England alone waiting for council housing with only 6,800 social rented homes were built in 2015-16.
It is hard to see how they can get anywhere near taking up the slack created by attacking private landlords, which the government did without plans to replace the supply in the first place.
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