Wednesday, 24 June 2009

Housing Associations Are 'Hybrid-Public Authorities'

Big stuff in the housing world - and potentially in the world of government strategy for 'choice and the small state' as well. Housing Associations, it seems, are 'hybrid-public authorities' according to the Court of Appeal. So they have obligations under the Human Rights Act. Why? Because:
  • Their significant reliance on public funding.
  • Their close working relationship with local authorities in the allocation of their stock.
  • Their provision of subsidised housing should be properly regarded as a governmental activity.
  • They act in the public interest.
  • They are regulated by a Government agency in such a way as to promote governmental policy objectives.
  • They have some functions of a public nature e.g. in relation to anti-social behaviour.
Which strikes me as potentially also being true of quite a lot of other charities and so called third sector organisations in other fields, such as social care or even health and education. A world of Judicial Review against such bodies might be about to emerge. ( Perhaps with Mr. Coates leading the charge?)

At least as interesting to me, however, is the link that the Housing Associations own trade body make to a 'separate, but allied, cause for concern': are they public bodies? Because, if they are, then their borrowing will count against public sector borrowing requirements - and their relative attractiveness compared to Councils as agents of housing development will lessen to governments of any colour. The NHF say:
" seems likely that carrying out a “function of a public nature” for the purposes of the Human Rights Act does not necessarily give rise to reclassification as a “public body”. However, it is stressed that classification as a “public body” does not depend on any single factor, but it based on the totality of an organisation’s relationship with the state. In this context a decision such as Weaver is certainly unhelpful even if not determinative in itself."
But its getting closer by the day, you can feel it can't you?


  1. Interesting.

    Would this chnage the national accounts treatment?

    I remember that back at the Bank we used to do a series of data on lending to different industries. One of which was 'real estate' which included both housing associations and commercial developers - on the grounds both were non-governmental. (Construction was seperate).

  2. The decision re human rights doesn't change the accounting treatment - but a clear decision that housing associations were 'public bodies' most certainly would. Associations borrow large sums to build new homes and only bid for partial public grant subsidy. If they were public bodies all that private borrowing would count as public debt. Or so everyone thinks in the sector.