A senior Whitehall source has indicated that Treasury officials fear an increase in targets and "direct influences" threatens RSLs' independence.
As a result the Treasury is anxious that the £30.6bn in private finance borrowed by associations could be reclassified as public rather than private debt by the Office for National Statistics, thus hitting government borrowing.
Central government powers over the sector will now be scrutinised by the Treasury during the coming 12 months, it is understood.
The concerns have increased in the wake of the end-to-end review of the Housing Corporation, which concluded that the quango should be more closely involved in ODPM policy formulation (HT 2 July, page 7).
The Whitehall source said: "The Treasury will monitor proposals for new powers for the corporation. The ODPM and corporation must look at how they influence RSLs, perhaps reining in some areas or doing things differently.
"It won't be targeting anything in particular – it is simply that direct influences and an accumulation of powers that could tip the balance are to be avoided.
"The fear is that at some point you tip that balance too far and the Treasury is worried that this point is fast being reached."
The corporation is expected to receive a substantial funding boost to invest in social housing from next week's comprehensive spending review.
As part of this – and in the wake of the end-to-end review – the corporation hopes to increase the powers at its disposal.
In an interview with Housing Today last month the corporation's chief executive, Jon Rouse, called for the quango to have intermediate powers of intervention in troubled RSLs (HT 11 June, page 22).
A spokesman for the ODPM said: "We are aware that the Treasury has an issue with this, but we believe the Housing Corporation has a sufficient balance of powers to ensure RSLs continue to operate in the private sector."
This will focus it more tightly on influencing housing policy and working more effectively with the nine English regions.
The changes – to be up and running by the autumn – will also include the establishment of five regional directors who will take overall charge of investment and regulation for London, the South-east, the South-west, the Midlands and the North.
Source
Housing Today
No comments yet