For a long time now it has been the policy of the Scottish National Party-led Scottish Government to claim it is taking the moral high road of investment in the country’s economy, while its English counterparts try to drag it down the low road of cuts and stagnation.
Its approach to housing - a plan for 6,000 affordable homes to be built each year for the life of the parliament - suggested that, despite an overall budget cut of a third, Scottish politicians really were managing to make a silk purse out of a sow’s ear. Eye-catching innovations such as the National Housing Trust supported this view.
However, this week’s announcement by finance secretary John Swinney of the Scottish Budget for the next three years has put an end to all this. Spending on housing supply is to fall from £268.5 million this financial year to £155.3 million for 2012/13, a drop of 42 per cent.
The Scottish Government may insist that its 6,000 home-a-year target remains intact, but Shelter Scotland, The Scottish Federation of Housing Associations and the Chartered Institute of Housing in Scotland all question its viability.
This is a shame, although perhaps inevitable, given the similar percentage cut which has been implemented in England. What will be interesting now is which country’s approach to building something with virtually nothing proves more successful. Former Scottish housing minister Alex Neil was no fan of the English model of increasing rents in lieu of grant funding, but it is difficult to see where else Scottish social landlords can turn. They are at least able to determine their own rents north of the border, but tenants would still have to somehow foot the bill.
The spectacle we report on this week, of councils in and around London blocking housing associations’ plans to build homes for rent at, usually, up to 60 per cent of market rent on affordability grounds is not especially appealing (page 1). This imbroglio will, however, be resolved. Its legacy might actually be benign as councils, such as Islington, contribute land to ensure development continues but at more affordable levels of rent. There is a moral to this story, but it is not the return of capital grant.