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Bill threatens housing associations' charity status, Commission warns

Finance | Gemma Ware | 12 Feb 2008

The Charity Commission has issued a briefing to MPs drawing up the new Housing and Regeneration Bill warning that the proposed law could have a serious impact on the charitable status and independence of charitable housing associations.

The Bill, which is currently on its way through parliament, sets out plans to establish a new regulator, the Office for Tenants and Social Landlords, which would have the power to set compulsory government-led standards for providers of social housing.

The Commission is concerned that the new regulator could force charitable housing associations to carry out activities outside of their charitable objectives, and so threaten their charitable status.

It gave the example of a housing association set up specifically to help elderly people that could be required to provide housing for young people who cannot afford to rent or buy, which would be outside its charitable purposes.

It also said the independence of charitable providers could be undermined if the new regulator directed how they should run their organisations.

The Commission is in discussions with the Department for Communities and Local Government (DCLG) to find a solution which safeguards charities’ charitable status and independence.

Rosie Chapman, director for policy and effectiveness for the Charity Commission, said: “Independence is central to charitable status, and trustees must always be able to take decisions that are in the best interest of the charity and its beneficiaries.

“If proposals in the Bill undermine their ability to do this, it would have serious implications for charitable housing associations.”

The Commission has also recommended that charitable companies which provide social housing should be treated in the same way as charitable industrial and provident societies doing the same job.

Under the Charities Act 2006, these societies now have a ‘principal regulator’ – the Housing Corporation (or its successor, the Office of Tenants and Social Landlords), which alerts the Charity Commission if an area of charity law needs addressing.

The Commission believes the regulatory burden on charities would be reduced if this provision is extended to charitable companies providing social housing, allowing 319 organisations to benefit from the removal of dual regulation. It is exploring this proposal with DCLG and the Office of the Third Sector.

There are 1,424 charitable Registered Social Landlords or housing associations, which make up two-thirds of the social landlords registered with the Housing Corporation.

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