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Northern Ireland Office

Answer

Mr. McNamara: To ask the Secretary of State for Northern Ireland what arrangements are in place to ensure that housing associations under the direction of the Housing Executive reinvest their operation profits back into the provision of housing. [219325] Mr. Spellar: Housing associations are not under the direction of the Housing Executive. They are regulated by the Department for Social Development. As such, they are restricted in their permissible purposes or objects by the Housing (Northern Ireland) Order 1992. They are not for profit organisations and generate reserves from their surpluses and all such reserves have to be employed in the business. Their boards of management are accountable for the stewardship of the reserves and are duty bound to use them effectively in the pursuit of the associations' objectives. Reserves are used to: (i) subsidise the development of properties and diversified activities; (ii) enable future major repairs requirements to be met; (iii) satisfy the loan covenant requirements of lenders, (who often require surpluses to be generated to develop services to meet rising customer expectations); and (iv) provide a cushion against uncertainty regarding assumptions in medium to longer term business plans. Their expenditure is subject to scrutiny by internal and external auditors, the Department for Social Development and the Northern Ireland Audit Office to ensure that the association's behaviour is proper and regular.

Secondary information

Type

Written question

Reference

431 c1328-9W;431 c1322-3W; 219325

Session

2004-05

Subjects

Accountability Construction Housing Investment Housing associations Northern Ireland Profits Repairs and maintenance Social enterprises

Link

View this Written question on www.publications.parliament.uk