Housing association change adds £59bn to UK debt

The UK's debt is to rise by around £59 billion thanks to a change in the status of most housing associations in England.

More than 1,500 providers of social housing have been reclassified as belonging to the public sector, the Office for National Statistics (ONS) has confirmed.

It means their debt will be transferred to the Government's accounts - a move the ONS estimates will add just under £60 billion to the UK's net level of debt in the year to March 2015.

The reclassification of housing associations from the private to public sector was first announced in October 2015.

At the time, a Government spokesperson indicated that the ruling would make "no difference at all to the way housing associations run themselves and imposes no new controls or rules".

He added: "We will bring forward measures that seek to allow housing associations to become private sector bodies again as soon as possible."

The ONS has changed its classification of housing associations following the introduction last year of new European Union guidelines on the presentation of national accounts.

From early 2016, all "private-registered providers" of housing in England are to be treated as belonging to the public sector.

This will apply to all organisations registered with the Homes and Communities Agency - many of which are non-profit housing associations. The reclassification will be backdated to July 2008.

The ONS said its estimates of the rise in the level of public debt and borrowing may be revised once full data for the financial year ending 2015 is available.