CSO Reclassification Risks Moving the Goalposts for Housing Associations that are Delivering 1/3 of all new Social Housing

– The Joint Committee on Housing, Planning and Local Government heard from representatives from the Irish Council for Social Housing (ICSH) today who have called for a cross-departmental team to be established to work alongside housing association to ensure the CSO/Eurostat classification does not derail our social housing delivery programme –

Speaking at today’s Joint Committee on Housing, Planning and Local Government, ICSH CEO, Dr. Donal McManus, said that the recommendation by the CSO to reclassify Tier 3 bodies has caused concern within the housing association sector and risked putting in jeopardy the major development projects that are already in the pipeline, impacting on borrowing, as well as the sector’s projected delivery under the Rebuilding Ireland programme.

The CSO has made a recommendation to Eurostat to reclassify the larger Tier 3 housing associations as bodies controlled by government, and will also be reviewing the classification of the remaining housing associations (also known as ‘approved housing bodies’ or ‘AHBs’). “The Importance of clarity here cannot be overstated,” Dr McManus said.  “Eurostat needs to spell-out the criteria for ‘on-balance sheet or off-balance sheet’ assignation, so that further issues don’t arise down the line. Therefore, we need a cross-departmental team to be established to work alongside AHBs to ensure the goalposts don’t get moved. Critically, government needs to share our objective of ensuring AHBs remain off-balance sheet.”

Dr McManus told the Committee that Housing association have been responsible for 35% of new build social housing in 2017 (799 homes), and including both development and acquisition, as well as casual vacancies, the sector will have delivered close to 3,000 homes for social housing tenants in 2017. Commenting on the ongoing review of the sector, Dr McManus said “The CSO has identified risk transfer, contractual arrangements and the financing regime as key indicators of state control. The ICSH believes, however that these issues can be resolved to enable our members to further develop outside the government sector.”

Notes:

• The Irish Council for Social Housing (ICSH) is the national federation for non-profit housing associations, representing approximately 270 members that provide social housing.  The sector manages over 32,000 homes for families on a low income, older people, people with disabilities and homeless households. Representing the Irish Council for Social Housing at the Oireachtas Joint Committee on Housing, Planning and Local Government were Donal Mc Manus, CEO of the Irish Council for Social Housing (ICSH), Ms. Karen Murphy ICSH Director of Policy, and Mr. Gene Clayton, CEO of the Iveagh Trust, Chair of the ICSH Housing Development & Supply Working Group, and Chair of the Housing Europe, Finance, Governance and Internal Market Committee.
• The Central Statistics Office (CSO) is responsible under EU law for the reporting of Government finance statistics, including deficit and debt. This includes classifying organisations and transactions according to the rules for compiling national accounts [European system of national and regional accounts in the European Union (ESA 2010)] These rules lay down criteria to establish whether individual entities should be included in the Government accounts – i.e. are they ‘on-balance sheet or off-balance sheet’ for Government.  Eurostat has requested the CSO to review the classification of Housing Associations (approved housing bodies). The 2016 Guidelines for ESA Implementation (the Manual on Government Deficit and Debt) can be downloaded here http://ec.europa.eu/eurostat/documents/3859598/7203647/KS-GQ-16-001-EN-N.pdf.
• The CSO proposal currently applies to housing associations that manage 300 or more units. These are known as Tier 3 approved housing bodies (AHBs). Further information on the CSO classification recommendations can be found here: http://www.cso.ie/en/methods/nationalaccounts/classificationdecisions/classificationofapprovedhousingbodies/