Bill 'breaches Compact and threatens independence'

The Government is breaching the Compact and threatening the independence of charities with new legislation, a social housing umbrella body has claimed.

The National Housing Federation, the trade body for housing associations in England, has warned that the Housing and Regeneration Bill breaks the terms of the Compact.

The federation claims that elements of the bill, which will be discussed in a parliamentary committee today, open the way for government interference in housing association business. This would breach Compact guidelines that say government will respect the independence of third sector organisations.

A proposed new regulator, the Office for Tenants and Social Landlords, could force associations to use up “dangerous” levels of financial reserves to meet government targets, the federation warned.

David Orr, chief executive of the federation, has written to third sector minister Phil Hope and housing minister Yvette Cooper calling for changes to the bill to avoid a “dangerous precedent in its relationship with charities and similar organisations”.

The letter says: “The measures contained in the housing bill would effectively place housing associations under the direction of the secretary of state."

“The fact that the Government, through the new regulator, would be able to fine housing associations for failing to implement central government directives is simply unacceptable.”

The federation also said the Government had flouted Compact guidelines on consultation because it had failed to gather views on the bill before it was introduced to Parliament.

A spokeswoman for the NCVO said it had advised the federation that the bill breached the Compact.

She said the bill was a “heavy-handed approach” and was “effectively trying to make housing associations an arm of government”.

“We will be continuing to discuss with the federation what support we can provide,” she added.

About half of England’s 1,300 housing associations are registered charities.

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