Press release from SFHA: Social landlords win Minister's pledge for increased funding

Press release from The Scottish Federation of Housing Associations:

The Scottish Federation of Housing Associations (SFHA) has welcomed the announcement by the Scottish Government today (Monday 8th July) that it is accepting recommendations regarding increasing grant levels and investment in order to build new social homes in Scotland. Housing associations will be given an additional £16,000 in subsidy per home.

Deputy First Minister Nicola Sturgeon MSP confirmed that the Scottish Government is accepting the recommendations made to Ministers by the Short Life Working Group on Affordability, Financial Capacity and Subsidy Rates, convened in April by the Minister for Housing and Welfare, Margaret Burgess MSP. The working group gathered together representatives from affordable housing providers, including SFHA, Glasgow and West of Scotland Forum, Association of Local Authority Chief Housing Officers and Convention of Scottish Local Authorities, all of these bodies submitted evidence on the issues faced by housing associations, co-operatives and local authorities in delivering affordable housing for social rent in areas of greatest need in Scotland.

Susan Torrance, Policy Manager, represented SFHA on the working group. She said:

“We are delighted that the recommendations of the working group have been approved by the Scottish Government, representing as it did, the unanimous views of all of us who are working to build social rented and affordable housing for those in need in Scotland.

“New homes are needed urgently and these measures will enable our sector to continue to build new rented homes and to seek to ensure that they are affordable to those working in low paid jobs and on low incomes.”

The working group reported at the end of June and Ms Sturgeon’s announcement is a major boost for the sector, which has been hard hit by budget constraints and the impact of welfare reform.

The working group’s main recommendations included:

• Increase grant levels from an average of £40,000 to £56,000 for housing associations and co-operatives, with local authority grant levels rising in parallel. This increase means more capital funding per house to make rents affordable.
• Flexibility in dealing with higher cost projects prioritised by local authorities, such as those delivered in rural areas, on contaminated sites or to higher energy efficiency standards.

The Scottish Government set a target to build 6000 affordable homes ¬every year from 2011 to 2014, using grants and loans allocated to housing investment. However, as a result of the financial crisis and restrictions on public funding, in 2010 the Scottish Government significantly cut funding for affordable social housing. The total amount of capital funding was reduced considerably and in order to maintain the unit number targets set, less grant was available to build the same number of houses. The average grant to build new affordable social housing decreased from an average of £70,000 to an average of £40,000 per home.

The SFHA launched its Keeping Our Homes Affordable campaign in March 2013 calling for the Scottish Government to return housing subsidy to sustainable levels. Increasing the amount of grant per home will enable more affordable social housing to be built.