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Extending Right-To-Buy Could Add £60Bn To The National Debt

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Extension of right-to-buy prompts ONS review of housing association status.

http://www.telegraph.co.uk/finance/economics/11870981/Housing-associations-could-add-60bn-to-national-debt.html

Britain's statistical authority is carrying out a review of the country's housing associations, in a move that could add £60bn to the national debt pile.

The Office for National Statistics is in the "early stages" of a possible reclassification of the bodies - which are currently considered part of the private sector, according to an ONS spokesman.

The move could pile an extra 4pc of national debt on to the government's balance sheet. Britain's current debt pile stands at £1.5 trillion. Total borrowings for more than 300 of the biggest housing associations were £59.3bn in 2014.

"We are undertaking preliminary work looking at the structure of housing associations," said the ONS.

The change is being considered after the Government increased its involvement in the way the bodies are run in a bid to improve their efficiency. In his summer Budget, the Chancellor George Osborne announced plans to reduce rents for housing association tenants by 1pc over the next four years.

The government has also extended its flagship Right To Buy scheme to housing associations, a move that could force them to sell their homes at a discount. An update on the review is due to be announced by the ONS at the end of September.

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Telegraph 17/9/15

'Britain's statistical authority is carrying out a review of the country's housing associations, in a move that could add £60bn to the national debt pile.

The move could pile an extra 4pc of national debt on to the government's balance sheet. Britain's current debt pile stands at £1.5 trillion. Total borrowings for more than 300 of the biggest housing associations were £59.3bn in 2014

The government has also extended its flagship Right To Buy scheme to housing associations, a move that could force them to sell their homes at a discount.

Last year, the ONS changed the way public finances are calculated to bring the UK in line with European accounting standards. The shift added £127bn to the government's balance sheet by including the cost of bank bail-outs, quantitative easing, and Network Rail as part of central government rather than the private sector.'

Be interesting to see how RTB will affect the balance sheets of the HA's.

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Lol,exact same time as well.

The whole HA thing has always struck me as an attempt-similar to PFI-to shift debt off the national balance sheet.

Extending RTB to HA's is just perverse if all we're going to have to do is get them to borrow more money to build social housing.

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Where do you draw the line....

University debt should be automatically given a 60% + hair cut as soon as the right of passage nonsense is done and dusted at graduation.

Public sector pension deficits are kept off balance sheet.

Accumulating state pension rights aren't even considered off balance sheet.

Trillions of pounds in retirement health liabilities also accumulating.

Meanwhile on here we seem to be obsessed with the 1.5 trillion of debt on household balkance sheets, that after a 20% real deleveraging since 2007 and 10 trillion in gross assets values. Even writing down houses the leverage is historically small.

What about the elephant in the room that is about to consume us all...the public sector with trilions upon trillions of debt and accumulated promises. Talk about watching the wrong target. You can print away the debt but you can't print away the burden of promises.

Edited by crashmonitor

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Where do you draw the line....

University debt should be automatically given a 60% + hair cut as soon as the right of passage nonsense is done and dusted at graduation.

Public sector pension deficits are kept off balance sheet.

Accumulating state pension rights aren't even considered off balance sheet.

Trillions of pounds in retirement health liabilities also accumulating.

Meanwhile on here we seem to be obsessed with the 1.5 trillion of debt on household balkance sheets, that after a 20% real deleveraging since 2007 and 10 trillion in gross assets values. Even writing down houses the leverage is historically small.

What about the elephant in the room that is about to consume us all...the public sector with trilions upon trillions of debt and accumulated promises. Talk about watching the wrong target. You can print away the debt but you can't print away the burden of promises.

Nail on head!

This is the unsolvable problem that will bring the whole thing crashing down and exactly why I will not sink my money into anything that has any counter party risk. The whole world is completely insolvent.

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Sixty Billion well spent in keeping VIs cushty!

Anyway, 'tis but a month or so's QE-ing. Corbyn may well be labelled a looney by the mainstream media for wanting to print money to fund infrastructure and investment but the Tories will have no problem doing likewise to buy votes and buoy up their banking chums and large builders - and the same media will hail it as the best idea since sliced bread.

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Nail on head!

This is the unsolvable problem that will bring the whole thing crashing down and exactly why I will not sink my money into anything that has any counter party risk. The whole world is completely insolvent.

Clearly the promises will never be fulfilled. The default however, is likely to be 'soft' through money printing eroding away the real world value of the debt repayment promises whilst also shredding regular people's savings and incomes. A massive wealth transfer from the productive masses to the well connected insiders who load up on debt to buy assets.

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Clearly the promises will never be fulfilled. The default however, is likely to be 'soft' through money printing eroding away the real world value of the debt repayment promises whilst also shredding regular people's savings and incomes. A massive wealth transfer from the productive masses to the well connected insiders who load up on debt to buy assets.

I'm not sure it's going to be that easy.Sure over the short term it papers over the cracks.But the reality will soon set in when we sterling start to sell off if it doesn't before.

I've been a doom monger for years,but it does seem to me that more and more of the general public are starting to look at the NHS/pensions/welfare etc and realise that their expectations for old age are at odds with the reality they're seeing.

Same in education.We're running massive fiscal deficits and yet there are still cities in the UK where the schools are full to the brim.

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