Housing sector sceptical over government planning and provision

Jim Strang of Parkhead Housing Association
Jim Strang of Parkhead Housing Association

With first a budget, then an election in the offing, it’s hardly surprising that the special pleading has started. The housing sector has definite grounds for concern.

The fall in house-building during the recession was worse in Scotland than elsewhere in the UK. It dropped by some 17 per cent from £2.4 billion in 2008 to £2 billion in 2009, compared with a fall of 7 per cent across England.

This was aggravated by changes in support for social housing. Last June, the Scottish government reduced the value of the Housing Association Grant (HAG) from £68,500 to £66,500 for each home. It is now looking at cutting that again, to just £40,000, and ending what is known as the “rural distinction” – which provides grants of £70,000 for house-building in rural areas.

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This morning, the Chartered Institute of Housing in Scotland (CIH Scotland) tackled the issue head-on. It warned the Scottish government that it had to be more honest about the funding of new social rented housing. In particular, it wants politicians and civil servants to “come clean” about the scale of this year’s 35 per cent budget cuts and the likely numbers of affordable homes the country can expect.

Today’s CIH Scotland conference in Glasgow, chaired by Jim Strang of Parkhead Housing Association, argued that big question-marks hung over the Scottish government’s £50m “innovation and investment fund”, announced in February. The majority of this is meant to be targeted at building new social rented homes.

In his opening address, Mr Strang said that most associations would “struggle to make even half of any new provision ‘social rented housing’, as opposed to other tenures such as shared equity or mid-market rent. We think the Scottish government knows this only too well, but doesn’t want to say it.

“We fully acknowledge that money is tight and that new tenures will be an important part of the landscape in some parts of the country, but there’s an elephant in the room here – everyone knows the reality but neither ministers nor officials are coming clean on it. With a subsidy benchmark of £40,000, you just can’t get 75 per cent or 80 per cent social rented housing out of this fund.”

Mr Strang’s comments coincide with the publication of worrying statistics from the magazine Inside Housing. It culled the figures from a range of reports, the most alarming being that there are currently 250,000 households in Scotland on council and housing association waiting-lists. There are also 11,000 households in temporary accommodation at any given time throughout the year.

Inside Housing has just launched its “House Proud – Devolved” campaign to ensure that politicians and decision-makers in the Senedd, at Holyrood and at Stormont understand housing’s importance. It matches last year’s initiative in the lead-up to the general election, which was a joint initiative with the CIH.

This week also sees the publication of a series of strategic priorities by the Scottish Building Federation (SBF). Its “manifesto” highlights the significant impact of the economic downturn on the Scottish industry. The SBF wants incoming MSPs to ensure “that the construction industry continues to make a positive contribution to a vibrant and successful Scottish economy in the years to come.”

The document points out that there are much wider economic benefits as a result of capital investment in major construction projects. It wants further action to identify the priorities for public funding and to mobilise private capital investment in this area. The SBF is also looking for further action to simplify public procurement and streamline the planning process.

In the view of SBF chief executive Michael Levack, “We are setting out a clear list of actions we think the next Holyrood administration needs to take to ensure that, over the next four years and beyond, the construction sector remains a critical contributor to a healthy Scottish economy.

“There can be no doubt that the industry has suffered considerably as a consequence of the economic downturn. Nonetheless, construction continues to make a substantial contribution to the Scottish economy, be that in terms of economic output, employment or apprenticeships.”

Mr Levack points out that, while housing is a major problem, the state of many schools in Scotland is also shocking. Figures produced last year suggested that more than one-fifth were in a “poor” or “bad” condition. So the SBF is calling for a “major programme of school building and refurbishment” to reduce the number of schools in this condition to zero by the end of the next Scottish parliament.

“In the run-up to 5 May,” said Mr Levack, “I hope Scottish parliament candidates across the political spectrum will acknowledge the strategic importance of the Scottish construction industry and commit themselves, if elected, to delivering the policies needed to help it thrive in the years to come.”

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