Brexit: an update for housing associations

This article provides an update on Brexit taking into account the changed political environment.

In September we published a briefing for housing associations to help them prepare for Brexit, focusing on the No Deal scenario, based on the Government’s then recently published Operation Yellowhammer document.

This article provides an update following this briefing, taking into account the now very different political environment. It covers:

1. Current situation and political context.
2. Key issues facing housing associations.
3. What housing associations can do during the transition period.
4. What the Federation will do.

1. Current situation and political context

Following the general election last year, Prime Minister Boris Johnson stated that there was now a mandate to take the UK out of the EU in January, “no ifs, no buts”.

The Withdrawal Agreement Bill passed its second reading in the House of Commons with a majority of 124 votes before Christmas, and is on track to complete its passage through both houses in time to allow exit from the European Union at the end of January 2020.

Assuming the remaining stages press ahead as planned by the Government, the transition period will then begin, with the UK remaining in the customs union and single market for the duration of that period. If by 31 December the UK and the EU have negotiated a free trade deal, the transition will end and the new relationship will begin.

The No Deal scenario, though delayed, would still be possible if, by this point, the UK and EU have not reached a trade deal – the UK may have to then trade on WTO terms.

2. Key issues facing housing associations

We’ve worked with our members to map the possible longer term impacts of Brexit on housing associations, detailed in previous briefings. The main issues identified were:

• The importance of economic certainty and frictionless trade to securing the finance and materials for new housing development.
• The risk of losing access to investment from the European Investment Bank and funding from European Social Fund and the European Regional Development Fund.
• The risk of shortages in both skilled and unskilled labour in construction and social care

Though the risks associated with No Deal have been postponed, navigating and managing uncertainty remains the short-term priority for housing associations.

Below we set out some of the key things that housing associations can be doing during the transition period to manage important issues.

3. What housing associations can do during the transition period

• Support staff and tenants to apply for settled or pre-settled status where necessary. If you have staff or tenants from the EU, EEA or Switzerland, you could encourage them to apply to the EU Settlement Scheme to continue to live in the UK.
• Ensure you understand the rights and eligibility for housing and benefits for EU nationals post-Brexit, and under the EU settlement scheme. You can find guidance on the Housing Rights' website.
• Check what to do if you receive funding from an EU programme, or if you have applied for funds from one (for example, the European Social Fund and the European Regional Development Fund). UK organisations may no longer receive funding from EU programmes following Brexit, particularly if the UK leaves the UK without a deal. The Government has guaranteed that organisations will continue to receive funding for certain EU programmes if this happens. You can check whether any of your funding will be covered by this guarantee on the government’s website.
• Continue to think about contingencies if there is a No Deal Brexit at the end of the year. The major issues that housing associations will want to consider when planning for the uncertainty around Brexit and continuing possibility of a No Deal scenario were outlined in our September briefing, and remain relevant.

4. What the Federation will do

Housing associations are united by an ambition to deliver good quality, affordable homes for everyone. They are uniquely positioned to keep doing this, with the right support from the Government, whatever the final outcome of the Brexit process. 

However, the continuing uncertainty makes the operating environment for housing associations more difficult. We’re being clear about this in our conversations with the Government and making the case for as much certainty as possible over investment and support.

We will continue to work with members and the Government on the areas we have recognised as crucial to the post-Brexit transition period: funding (particularly the Shared Prosperity Fund), construction skills, and care skills.

We will continue to make the case that solving the housing crisis must remain a priority for the new Government, and that supporting housing associations remains one of the best ways to deliver the new homes and strong communities needed, whatever the outcome of the Brexit trade deal negotiations.