Thank you, Llywydd, for the opportunity to make this statement on the Regulation of Registered Social Landlords (Wales) Bill, which I introduced yesterday.

This Bill addresses issues as a result of a classification decision by the Office for National Statistics. The decision to reclassify registered social landlords as public non-financial corporations effectively brings RSL private borrowing into the public accounts. The Bill sets out provisions that will allow this decision to be reviewed by ONS in order to maintain the current funding arrangements for RSLs here in Wales. RSLs in Wales provide around 141,000 affordable social rented homes in total and played a vital role in meeting the previous Welsh Government’s target of 10,000 new affordable homes. A significant proportion of their development programme is funded through borrowing from the private sector to supplement funding received from Welsh Government. The Welsh Government has committed to providing 20,000 much needed, new, affordable homes during the current Assembly term. RSLs have committed to deliver at least 12,500 of these new homes.

Llywydd, in September 2016, the Office for National Statistics reclassified RSLs in the national accounts as public non-financial corporations. What, at first, might be thought of as a technical, accounting decision, could, in fact, have serious and far-reaching consequences. It means that RSL private borrowing, currently on average £200 million per year or £1 billion over the period, will be classified as public sector net borrowing and score as a charge against Welsh Government budgets. The impact of the ONS decision is significant, and if we don’t bring forward legislation and RSLs remain classified as public sector organisations, funding for them to build homes would have to compete with other Welsh Government priorities. We would need to either increase Welsh Government spend on social housing by around £1 billion during this Assembly term, with serious effects on our existing spending commitments, or to accept that RSLs would be able to provide significantly fewer new affordable homes and not be able to borrow to invest in existing stock. RSL borrowing also supports the positive contributions they make to the communities in which they work, including significant local training, employment, social and economic benefits. There will also be uncertainty for funders who have made long-term commitments to funding an independent RSL sector.