Cuts set to slice away at new-build aspirations

The worst case for Scotland is still a lot better than the bleak future being faced by English housing associations, who are looking at a cut of 63 per cent phased over four years, but housing investment would still be taking a disproportionate hit, says the SFHA.

The fact that the cut is as high as 30 per cent is not immediately apparent from the published figures in the draft Budget. As stated, the Housing and Regeneration Budget will fall from 488 million in 2010-11 to 393m in 2011-12, a drop of 19.4 per cent.

However, the SFHA points out that when accelerated investment from last year is taken into account, the year-on-year fall is more than 30 per cent. During 2009-10, the Scottish Government allocated an additional 120m from the final year of the three-year Affordable Housing Investment Programme as part of its plan to combat the worst effects of the recession.

The SFHA points out that the reason this was deemed a good idea at the time was because stimulating the house building sector creates real jobs in the real economy. It follows that slashing the housing budget will have very severe effects on job creation.

Commenting on the Budget, Mary Taylor, SFHA chief executive, said that the only possible outcome of these cuts would be to reduce sharply the supply of much needed new housing in Scotland.

"We commend the Finance Secretary's difficult decision to transfer money into desperately-needed capital budgets, but housing is still taking more than its fair share of the pain, when you consider the overall cut in capital spending next year is 25 per cent. Quite simply, Scotland needs new affordable homes, the jobs they support, and the vital difference they make to communities the length and breadth of the country."

She highlighted the fact that the government accepts that Scotland needs at least 10,000 new homes a year to solve its affordable housing crisis. However, the number of new affordable homes likely to be built in Scotland in 2011 looks certain to drop from the high of 8,092 achieved in 2009-10 - itself well below the target figure. The Scottish Government's own figures estimate that already some 249m has been paid upfront by housing associations to build new homes, and this money is due to be repaid by the government. As such, it may prove challenging for Scotland to achieve the target of 6,000 new affordable homes set by the Government for next year.

However, the SFHA did welcome the continuation of the Energy Assistance Package and the Home Insulation Package. Both these programmes are vital in tackling the fuel poverty faced by many tenants, it says.

The SFHA also welcomed the fact that the Scottish Government plans to continue its Wider Role Fund. This fund partially supports the community regeneration role played by housing associations. Projects included as part of community regeneration include physical regeneration of sites and areas, welfare advice and employability programmes and community based activities and training, all of which look to improve the quality of life in communities.

The money the Scottish Government has put in to the Wider Role Fund is more than justified by the fact that housing associations and cooperatives more than double that funding. In 2009-10, for every 1 spent on the fund, housing associations managed to bring in an additional 2.51.

Housing associations run a range of different projects which bring direct benefits to the wider community. The Older Persons Advice Project, for example, added more than 4m to the incomes of 2,500 Scottish pensioners in central Scotland. Many old people are not aware of the full range of entitlements available to them, so this advice can add significantly to their incomes, as the results demonstrate.

Another project, undertaken by Cassiltoun Housing Association, involved the Castlemilk Stables. The residents of Castlemilk had mounted a ten-year campaign to save the B-listed derelict 18th-century stables block and the project focused on restoring the building, keeping it in community ownership and giving it a sustainable future. Not only has it now been voted one of Glasgow's top 50 landmarks, the stables block provides a range of activities promoting social cohesion.

The whole range of projects undertaken under the aegis of the Wider Role Fund was highlighted at a parliamentary reception organised by the SFHA on 28 September. Speaking at the event, Taylor pointed out that the diverse and extremely valuable role played by housing associations and co-operatives in Scotland in community regeneration often goes unrecognised by the wider society.

"The social and economic value of these projects in local areas is vital and they often help those groups who are isolated or hard to reach," she commented.

Taylor added that the fact that so many SFHA members were willing to come to the event from all parts of Scotland showed how committed the sector was to its wider role in regeneration. She welcomed the fact that the Scottish Parliament had supported the event with both the housing minister, Alex Neil, and the shadow housing minister, Mary Mulligan, giving addresses at the event, which was also attended by many MSPs.

"While housing associations develop and provide these projects according to local need, the Scottish Government has a vital role to play in supporting them. We very much hope to see support for these activities continue in some form beyond this year," she said.

For his part, the housing minister said that the Scottish Government valued the contribution made by housing associations and co-operatives to regeneration and was keen to see that work continued.

"We are working with the housing association sector to develop and improve its approaches to wider role activity in the context of the current spending review," he said.