The Scottish Federation of Housing Associations (SFHA) has responded to the Scottish Government’s Draft Infrastructure Investment Plan 2021–2022 to 2025–2026 (1) by welcoming its proposed capital funding increase. Warning, at the same time, that the proposed ‘investment hierarchy’ — which would prioritise maintaining and enhancing existing assets over new-build — will not deliver the homes Scotland needs, if applied to affordable housing. Instead, SFHA said a “significant programme” of housebuilding is required during the next parliament.
SFHA is calling for 53,000 affordable homes, including 37,100 for social rent, to be delivered between 2021–2026 (2) — and for the vast majority to comprise new-build properties. The federation said that while homes can be provided by bringing existing stock back into the social rented sector, it cannot be done at the scale and pace needed to tackle Scotland’s existing and future housing need.
The Draft Infrastructure Investment Plan 2021–2022 to 2025–2026 announced £2.8bn in direct capital funding for the delivery of affordable housing during the next parliamentary term. The Scottish Government recently confirmed this is a planned increase of 16% on the current £2.4bn capital funding, and it anticipates this will be increased through Financial Transactions and Transfer of Management of Development Funding. SFHA said it is essential that the total amount of funding for 2021–2026 is at least £3.4bn — the funding total identified in its joint research with CIH Scotland and Shelter Scotland that is required to deliver the 53,000 affordable homes Scotland needs during this period — otherwise, the country will continue to have a backlog of demand (3).
SFHA also welcomed the Government’s ambition to deliver sustainable green homes that contribute to Scotland’s transition to net zero greenhouse gas emissions, along with the current and planned funding for social landlords. However, further support will be required if housing associations are to meet the Energy Efficiency Standard for Social Housing (EESSH) Two and the New Build Heat Standard. The majority of the funding (91%) to meet the current EESSH standard came from housing associations’ own reserves, at a cost of over £400m (4), and the investment costs required to meet EESSH2 are forecast to be significantly higher.
The federation is also calling for:
- An increase to adaptations funding. SFHA welcomes the government planning to increase funding for housing associations and co-operatives to deliver adaptations to their homes to £11.6m a year, but detailed research, carried out by the federation, has identified that £17m is required per year, if savings to the health budget are to be maximised and a preventative approach embedded.
- A review of subsidy levels. SFHA is calling for the government to review the current level of grant subsidy within the Affordable Housing Supply Programme and allow for flexibility for local circumstances, such as higher development costs in rural areas, and to commit to an increase in line with CPI, as a minimum, over the course of the next parliament, in order to keep housing costs affordable for tenants.
Sally Thomas, SFHA Chief Executive, said: “The Scottish Government has made progress towards tackling housing need in Scotland, and it is vital that this is maintained during the next parliament. If we are to deliver the 53,000 affordable homes which Scotland needs — and at the pace they are required — we must see a significant programme of building. Not only will this deliver much-needed homes, it will also drive economic growth, tackle poverty, create jobs and reinvigorate communities — and this social and economic stimulus will be required more than ever as we look to Scotland’s post-pandemic recovery.
“We welcome the Government’s planned increase for capital funding during the next Affordable Housing Supply Programme and look forward to seeing the full details of the remaining support. It is critical that our sector is supported to build the homes Scotland needs, and to the required energy and building standards, while being able to maintain affordable rents for tenants.
“We look forward to continuing our discussions with the Government regarding how we realise our shared ambition of ensuring that everyone in Scotland has a safe, warm, energy-efficient and affordable home.”
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