S5M-11350 Housing (Amendment) (Scotland) Bill: Stage 1

The Deputy Presiding Officer (Christine Grahame): The next item of business is a stage 1 debate on motion S5M-11350, in the name of Kevin Stewart, on the Housing (Amendment) (Scotland) Bill. I invite members who want speak in the debate to press their request-to-speak button now.

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Stewart Stevenson (Banffshire and Buchan Coast) (SNP):

Through the chair, I will say a couple of words to Andy Wightman, who gave us a 40-year horizon since housing associations came into play. “The Digest of Justinian” covered the co-operative housing associations in ancient Rome, and Babylon had co-operative models 2,500 years ago, so Scotland has come to the party quite late.

Members might reasonably ask why I am speaking in the debate. I forced my way to the front of a long queue that the whips had drawn up to fill the last speaking place from the Government benches. The temptation for my part arose, of course, when I read in the committee report at paragraph 10 that

“The Bill is short and technical”.

That word “technical” inevitably drew me in.

It is fair to say that this is not the most contentious thing that we have debated since I came to Parliament in 2001, but it is quite interesting. It illustrates some of the unintended side effects of revising the way in which we do accounting—in particular, the accounting of bodies that have to report their assets, liabilities, income and expenditure. In 2001, I found that, under the old financial reporting standard 17, the accounts for the private finance initiative contractor Kilmarnock Prison Ltd—I was interested in prisons at that time—treated Kilmarnock prison as a disposal in the second year of trading because it had a commitment in the 30-year contract to pass the prison to the Government. It vanished off the contractor’s balance sheet as an asset but, as far as the Government was concerned, it did not appear as an asset on its balance sheet until 30 years hence. That asset appeared on no balance sheet for almost 30 years, under the old system.

We are now under the international financial reporting standards and have a new thing called “contingent assets”. That means that the prison now appears on the balance sheets of both Kilmarnock Prison Ltd and the Government. The bottom line of all that, in relation to the issue that is before us today, is that we need to have the right balance as to where things appear in our public accounting.

The problem that has been presented to us by the Office of National Statistics is perfectly proper. The question is whether the associations were in a place in which they had sufficient freedom of action that they could control, manage, dispose of and buy assets without the Government telling them what to do. The next question is whether they were creating assets for the Government, and the final question is whether they, by their actions, created involuntary liabilities—contingent or otherwise—for the Government. It was uncertainties in those accounting areas that properly caused the Office for National Statistics to say that those bodies are connected to the public sector—although they are private bodies, as Mr Wightman reminded us—and are really part of the public sector. If that was the case it would, of course, inhibit the Government in its spending plans and, more fundamentally for the policy that we are interested in here, inhibit the ability of those societies to borrow money and build housing. Alex Rowley is perfectly correct to say that we have to build more houses, by whatever means.

Elaine Smith (Central Scotland) (Lab): When he read about the bill, did Stewart Stevenson come across comments by UK Finance that lenders might have to “ramp-up their ... due diligence”? What does he think about that point?

Stewart Stevenson:I was very pleased that UK Finance came to a position of supporting what is proposed—I gather that there was some doubt about that initially.

Elaine Smith makes a valid point: whenever we change a system, we risk creating greater complexity. That would not be good news if it got in the way of our building more houses and made life more difficult for housing associations. However, the bill strikes the right balance and I shall be very happy to support it, come decision time.

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