The representatives of housing associations in England, Scotland, Wales and Northern Ireland have warned the government that a European Commission ruling threatens investment in social housing.

Onerous new European regulations will frustrate efforts to boost affordable housing supply through efficiency gains in the sector, says the National Housing Federation.

The ruling would force the UK’s 2000 plus housing associations, housing approximately 3.6 million people, to put service contracts out for tender across the entire European Union (EU) after a long-running dispute between the UK and Brussels.

The four representative bodies for housing associations in the UK have appealed in a joint letter to the Chancellor to fight the decision in the European Court of Justice if necessary, rather than accepting the commission’s controversial ruling that has been subject of negotiations over the past three years.

At present, public bodies, such as local authorities, are subject to EU procurement rules obliging them to advertise and accept tenders for public service contracts from across Europe, in an often time-consuming and overly bureaucratic process. The new Commission decision rules that independent, not-for-profit housing associations should also be regarded as public bodies, on the basis they are “bodies governed by public law” and must obey the same rules.

The group disputes the Commission’s decision and claims it will:

• Divert investment earmarked for social housing into costly and unnecessary bureaucratic activities for no additional benefit.
• Threaten local job creation strategies by preventing targeted investment in local areas.
• Frustrate the government’s efficiency agenda for the sector.
• Undermine the independent status of the housing association sector.