Extra funding is welcome, but investment must rise in line with increasing costs

The Scottish Federation of Housing Associations has welcomed the extra £100 million funding announced by the Scottish Government for affordable housing during 2021–2022. 

The new funding brings the Scottish Government’s proposed investment for 2021–2026 to £3.4 billion, which SFHA said could deliver the 53,000 affordable homes Scotland needs during the next parliament – as long as the current level of grant subsidy is reviewed and there is a commitment to increasing it in line with development costs over the next five years. (1) 

Together with the Chartered Institute of Housing (CIH) Scotland and Shelter Scotland, SFHA had campaigned for the Scottish Government to commit to delivering 53,000 affordable homes, including 37,100 for social rent, between 2021 and 2026. The three housing organisations had also called for this to be backed up by funding of at least £3.4 billion – which was based on existing grant levels. (2) 

SFHA said that while it welcomed the Scottish Government’s commitment of £3.4 billion investment at current levels of building costs, it added that the government’s upcoming review of grant subsidy levels must result in investment rising in line with increasing development costs during the next parliament. SFHA added this is vital in order to allow social landlords to build the homes to the required building and energy efficiency standards, while keeping rents affordable. 

Sally Thomas, SFHA Chief Executive, said: 

“This further increase in funding for affordable housing is a welcome acknowledgement from the Scottish Government that investing in the social housing sector and building affordable homes is a vital part of Scotland’s recovery from Covid. 

“The commitment of £3.4 billion must go hand in hand with the grant subsidy rising in line with costs over the next five years. With costs of construction rising and social landlords expected to meet new higher building and energy standards, this commitment will be critical to ensuring the homes can be built to the scale, type and quality needed as well as in the locations required, with rents that remain affordable. 

“We look forward to working with the government, and our members, as part of the upcoming subsidy review group, so we can realise our shared ambition of ensuring everyone in Scotland has a safe, warm, energy efficient, affordable home.”