The EC decision will force them to comply with protracted EU procurement regulations. In future, housing associations may have to advertise in the European Union's Official Journal and choose successful applicants according to rules laid down by Brussels.
The rules would apply to works contracts worth more than £3.8m and service contracts worth more than £153,000.
John Bryant, policy officer at the National Housing Federation, said the EC's decision was "bad news". Associations would be "forced to follow onerous procurement requirements at a time when the government is interested in speeding up the contracting process". The NHF would be looking for a legal challenge to be mounted against the decision, he said.
The government has the option of contesting the decision, issued just before Christmas, in the European Court of Justice.
An ODPM spokesman said ministers were "considering the issue" and that a decision on whether to go to the court was expected within two weeks.
But Charles Morrish, a partner at solicitor Trowers & Hamlins, said it would be a "brave move" to challenge the EC. "It would be difficult for the government to win," he said. The EC's move is part of a long-running dispute with the British government over the legal status of UK registered social landlords.
The EC considers RSLs to be "contracting authorities" that should comply with public procurement directives.
Part of its reasoning is that housing associations are subject to management supervision by a quango – the Housing Corporation – so should be subject to public law.
That view will worry the government, which deeply opposes moves for RSLs to be considered public bodies. Such a definition would result in RSLs' vast loans being added to the public borrowing figure, which the government aims to keep as low as possible.
Source
Housing Today
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