Scottish Budget 2021/22 members' briefing

Finance Secretary Kate Forbes laid out the details of the Scottish Budget on 28 January. 

Ms Forbes said the budget was based on a partial settlement from the UK Government, as the UK Budget would not take place until March. 

A summary of the announcements and any subsequent actions are outlined below.

SFHA will update members as the legislation makes its way through the legislative process in the Scottish Parliament. 

Housing 

SFHA has been in regular discussions with the Scottish Government regarding housing’s role in the economic and social recovery from the pandemic. As a result, we were pleased to see the following statement within the budget document: “As we rethink how we live, and the communities we live in, housing will be central to our ambitions for a strong recovery and fairer Scotland – creating jobs, tackling social and health inequalities, and ensuring strong, sustainable communities... Our housing investment will make a vital contribution to Scotland’s recovery, leveraging significant economic output, supporting over 10,000 jobs a year, and producing social and environmental benefits.” 

The budget provides capital grant funding of £667.6 million for affordable housebuilding in 2021/22, including £575.4 million through the Affordable Housing Supply Programme, and £92.2 million through local government.  

Alongside this grant funding, the Scottish Government will also utilise £142 million of financial transactions (FT) – capital funding that must be used in the form of loans outwith the public sector – to support housing, including shared equity schemes. It is possible there may be more FT funds made available to Scotland following the UK Budget.

SFHA has cautiously welcomed the funding announcement on the basis that, if the same level of investment – amended in line with any changes to subsidy levels – was committed throughout the duration of the next parliament, it could deliver the 53,000 affordable homes Scotland needs. 

 The subsidy level is, however, fundamental to this. We are urgently calling on the Scottish Government to carry out a review of grant subsidy levels in order to ensure social landlords can deliver the affordable homes Scotland needs between 2021 to 2026 – and to the required building and energy standards. With costs of construction rising and social landlords expected to meet new higher standards, the money announced in this budget must be increased throughout the next parliament to ensure housing need is met. 

Fuel poverty 

The budget includes a small increase in funding for fuel poverty and energy efficiency programmes, £145.6 million for 2021/22, significantly short of the £244 million SFHA, and our partners in the Existing Homes Alliance (EHA), calculate is needed. This is a missed opportunity – not only to transform peoples’ homes and tackle fuel poverty, but also to create up to 17,000 jobs and cut the cost of heat decarbonisation. SFHA will continue to pursue this through our work as part of EHA. 

Adaptations 

The annual budget for RSL adaptations has increased to £11 million from £10 million. While an increase is welcome, our research has identified that £17 million is required per year, if savings to the health budget are to be maximised and a preventative approach embedded. The increase does not go far enough to support this vital work. We will continue to press for this in our ongoing discussions with government as well as the comprehensive review of the system and financing that the government acknowledged was required in the Programme for Government. 

Social justice 

The experience of the pandemic has demonstrated the need to rethink how we live, work, learn and shop, and ensure local spaces are green, vibrant and safe – for this reason, SFHA welcomes the government commitment to the 20-minute neighbourhood. 

The premise is people can meet their needs within a 20-minute walk from their house – bringing together a number of priority policies and investments. These include active travel, regeneration, town centres, air quality, infrastructure investment, climate change, Community Wealth Building, access to greenspace and local services.  

To support this, the Scottish Government will establish a new Place Based Investment Programme which will be backed with initial investment of £55 million in 202122. This is included in an overall commitment to invest £275 million-plus, over the next five years, in support of community-led regeneration, town centres and 20-minute neighbourhoods ambitions.  

In 2021/22, the government will provide £81.6 million for regeneration programmes, including the Empowering Communities Programme which funds communities to undertake projects which tackle poverty and inequality on their own terms, in turn, supporting community regeneration and inclusive growth. As community anchor organisations, housing associations are perfectly placed to play a central role in enabling, supporting and delivering this work.