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Scottish registered social landlords will regain private body status, says Scottish Government

The Scottish Government will legislate to reclassify registered social landlords (RSLs) as private bodies, following the recent decision by the Office for National Statistics (ONS) to give them public body status.04 Oct 2016

Without this reclassification, RSLs would be unable to borrow money for future development without this appearing on the Scottish Government's balance sheet, according to housing minister Kevin Stewart.

The decision by the ONS to reclassify Scottish RSLs as public bodies was based on the nature of the powers that the Scottish Housing Regulator is able to exercise over them. The decision also applies to RSLs in Wales and Northern Ireland.

The ONS made a similar decision in relation to RSLs in England last year. In response, the UK government made some changes to the powers of the Homes and Communities Agency (HCA) over RSLs as part of this year's Housing and Planning Act.

The Scottish Government intends to "study the reasons behind the ONS decision" before drafting a bill that would similarly adjust the powers of the Scottish Housing Regulator. It anticipates removing the need for the regulator to consent to the disposal of assets by an RSL, or to the restructuring, voluntary winding up or dissolution of an RSL; as well as limiting the regulator's ability to appoint members and managers to RSLs.

The Scottish Government has committed £3 billion in public investment as part of its target to deliver 50,000 new affordable homes in the next five years. However, RSLs will need to be able to supplement this investment with around £300 million in private borrowing each year if this target is to be met, according to official estimates.

"The First Minister made clear in Programme for Government that we are committed to RSLs remaining classified as private bodies in the national accounts," said Kevin Stewart, the housing minister.

"Reclassifying RSLs to the private sector is important as it will ensure their borrowing continues to be treated as private borrowing, which can be used to augment the £3bn of public investment that the government is providing to support the delivery of 50,000 new affordable homes in the next five years. I am pleased that the Scottish Government has reached an agreement with HM Treasury that will allow progress in delivering this programme to continue whilst the position on classification is being resolved," he said.

RSLs are not-for-profit housing associations or housing cooperatives that aim to provide quality, low cost accommodation to those that need it the most. In Scotland, RSLs must be registered with the Scottish Housing Regulator.

The total number of homes in Scotland has increased by 11% since 1999, from 2.19 million to 2.43 million last year, according to the 2015 Scottish Household Survey. Of these, 14% were leased from a private landlord, family member, friend or employer; compared to 5% in 1999.