English | Cymraeg Tel: 029 2076 5760 Connect: Twitter

Rents, reclassification and a ‘test of devolution’

The two Rs dominated the opening of the Community Housing Cymru conference on Thursday as housing associations debated the implications for housing and the devolution settlement of recent events across the border.

UntitledCHC chief executive Stuart Ropke called for urgent decisions on rents and reclassification. However, those will not come until after the other event hanging over this week’s annual conference. The UK spending review on Wednesday, November 25 will mean cuts imposed from London but with implications for Wales.

Stuart said Westminster’s attempts to make Wales cut its social rents represent a test not just of housing policy but of devolution itself. And called for urgent decisions on: rents and reclassification. ‘I have to confess I’m quite simple when it comes to rents and rents policy. Housing policy is devolved to Wales. We’ve made some decisions here, welcome decisions, that we will invest capital to deliver affordable rents. To be in a position where we might have to move policy because of changes over the border I think is slightly perverse.’

In the Budget in July, the UK government cut social rents by 1% a year for the next four years. It is already imposing this in England but is also pressurising other UK nations to follow suit or find the savings elsewhere. Stuart raised comments by the finance director of an English housing association at the innovative finance conference last week that it will respond by building more expensive homes and converting existing ones to more expensive ‘affordable rents’ as an indication that it may not deliver welfare savings across the border.

He went on: ‘Furthermore I think it’s slightly cheeky actually that we’re being asked by England to look at our rents policy. Because we’ve invested capital our rents are lower. We’ve made a conscious decision to keep our rents lower and save on the welfare bill. This is no longer a question of just housing policy to me, it’s a question of where devolution is going and the direction of travel, who is in control here.

On the second R, the Office for National Statistics (ONS) has reclassified English housing associations as public rather than private sector for the purposes of the national accounts. The Westminster Department for Communities and Local Government has said it will deregulate the sector to get the decision reversed but newspaper speculation continues that some parts of government would like to go further and find a way to privatise associations.

Stuart said: ‘I’ve heard a lot of people argue even this week that that doesn’t actually mean very much, it’s just a technical definition. I’m sorry I can’t agree on that.’ The DCLG has said it would act quickly. ‘But for anybody who read the Financial Times last Friday what you will have seen is a battle going on within the IK government. There are clearly conflicting views of the direction that should be taken next.’

He said that if the ONS looked at Welsh housing associations it would take the same decision as in England because or the regulator’s powers over consents and the appointment of board members in extremis. And he pledged to work with Welsh Government: ‘They will find us constructive partners in coming up with a regime that avoids reclassification but protects the interests of a variety of stakeholders in our sector which include Welsh Government, local authorities, tenants and lenders.’

Earlier communities and tackling poverty minister Lesley Griffiths stressed the importance of social rents and ‘independent housing associations’ but said she was not yet in a position to announce anything on rents. She explained that she had said previously that she was keen to maintain the status quo on rents but that there were wider issues that need careful consideration. ‘It does remain my intention to confirm our policy in a few weeks time.’

On reclassification, the minister said:

‘I see very little to be gained by having a situation where another area of crucial public expenditure is subject to broadbrush Treasury control. Neither am I attracted to any change in policy being brought about by changes being contemplated over the border. Rather it will be a conscious decisions made here in Wales.

‘It is increasingly clear we have a very different policy on social housing and I see no reason why those differences should not extend to technical decisions about whether RSLs are public or private sector.’

Sign up to our email newsletter

Every two months we'll email you a summary of the latest news & articles on the WHQ website. Better still, if you're a fully paid up magazine subscriber, you'll get access to the latest members-only articles as well.

Sign up for the email newsletter »

Looking to advertise in our magazine?

Advertising and sponsored features are a great way to raise your profile with our readership of housing and regeneration decision makers in Wales.

Find out more »