Housing minister Kevin Stewart has confirmed his intention to bring forward legislation to reverse the reclassification of Scottish housing associations in September this year.

Following a decision by the Office for National Statistics (ONS) to classify Registered Social Landlords (RSLs) as public bodies in the national accounts with effect from 18 July 2001, the Scottish Government moved to provide reassurance to RSLs by committing to new legislation that will allow the ONS to reclassify them to the private sector.

A new Housing Amendment (Scotland) Bill will adjust the powers of the Scottish Housing Regulator and ensure RSLs can continue to borrow money privately.

It is expected that the Bill will contain measures similar to those in the Housing and Planning Act 2016, which addressed the same issue in England when the ONS reclassified housing associations there to the public sector in 2015.

Mr Stewart also revealed proposals to allow ministers to “limit the extent of local authority control over RSLs” through constitutional arrangements, for example through appointing members to their governing bodies.

In a letter to the local government and communities committee last week, the minister confirmed that September is the timetable Scottish Government is working to in order to finalise the legislation to reverse ONS reclassification and introduce this to Parliament.

Mr Stewart said: “The ONS announced on 29 September 2016 that it had indeed classified RSLs to the public sector. I am writing now to brief you on the preparation of the Bill and our plans for introducing it.

“As we had expected, the reasons for the ONS decision were based principally on the extent of some of the powers that the Scottish Housing Regulator can exercise over RSLs. Consequently, the main purpose of the Bill will be to adjust those powers, so as to make them compatible with RSLs being reclassified to the private sector.

“To help us ensure that the Bill will achieve its purpose, we have had discussions with the ONS about the adjustments the Bill will need to make to the Regulator’s powers. These discussions culminated in us submitting a policy proposal to the ONS last month, in which we described the provisions we propose for the Bill. In addition to adjusting some of the Regulator’s powers, our proposal also included a power for ministers to limit the extent of local authority control over RSLs through constitutional arrangements with RSLs, for example through local authorities appointing members to the governing bodies of RSLs.

“Whilst ONS can only make a formal decision on reclassification on the basis of legislation that has been enacted and brought into force, it indicated - subject to various points of detail being resolved - that the measures we have in mind were likely to lead it to reclassify RSLs back to the private sector.

“In view of the response from the ONS, we are now working to settle the detail of the Bill. As this may take a few more weeks, we do not expect to be able to introduce the Bill before the summer recess. However, we expect to have it ready for submission to the Presiding Officer during recess, and – subject to his clearance – to introduce it in early September.”