Minister for Housing Eoghan Murphy has said that he will not permit a reclassification of the State’s housing associations as holding public rather than private debt impede their future house-building plans.
Mr Murphy was responding to the Central Statistics Office’s recommendation that a large number of housing associations be reclassified as Government bodies as they are directly funded by the government.
The move could shift millions of euro of debt onto the State’s balance sheet and jeopardise plans to build thousands of public housing and rental units through so-called approved housing bodies (AHB).
The Minister said he was reviewing the decision but would have to wait and see whether the EU’s statistics office, Eurostat, agrees to the recommendation, and that would take a few months.
He did not think the ruling would have “much of an impact retrospectively” as most lending to the housing bodies has been through the Housing Finance Agency, which is on the State’s balance sheet.
“But we have ambitious targets for the AHB sector as part of our State-funded building programme and I am not going to let a classification issue stand in the way of building those homes,” he said.
The CSO has said that most debt borrowed by housing bodies is already on the Government’s books, though the reclassification could add an additional €17 million to the State’s balance sheet.
Housing associations have warned that the decision could lead to fewer social housing being built as the scope of Government borrowing is limited by fiscal constraints.
Mr Murphy said he was working with the Departments of Finance and Public Expenditure and Reform on what they “can do to avoid this funding coming onto the balance sheet for the future or to avoid it closing down new potential avenues of funding which we have been exploring”.
“My responsibility as housing Minister is to get those houses built and we will be using the AHBs to do that and we won’t be curtailing their ambition,” he said.
