The European Commission has confirmed that housing associations should be exempted from competition rules that would have limited the size of grants they could receive and capped turnover.
Under European rules, grants would have been limited to £10m and subject to strict conditions. Limits on turnover would have been set at about £26m (HT 5 March, page 15).

But government representatives at the commission said on 20 April that they did not consider Housing Corporation-approved development programme grant to be "state aid", and that social housing is not a "service of general economic interest" where the competition rules could apply.

To ensure the sector is not brought under that definition, the government will help the Commission draft an exemption.

Bob Wilson, head of finance policy at the National Housing Federation, said: "We support the ODPM line that social housing is not a service of general economic interest because it is only provided by councils and housing associations, so their grant isn't state aid. But we believe giving grant to developers brings that into question as it widens the market."

Source

Housing Today