Going solo may be winner
The social housing sector may benefit from an independent Scotland, says Ruth McNaught, solicitor at Harper Macleod
Scotland’s housing profile is distinct from that of the rest of the UK for a number of social, legal and environmental reasons. For example, there is less private housing in Scotland and a higher proportion of socially rented stock. Also, Scotland’s climate impacts upon the range of options available to tackle issues of energy efficiency and fuel poverty, and there is, of course, a different legal system.
Under the current devolution settlement, responsibilities for housing and regeneration policy already lie with the Scottish ministers. These include: grant funding; utilisation of planning powers; regulating the tenant and landlord relationship; setting the standards of quality for rented housing; and legislating on matters relating to land and property.
The underlying mechanisms for providing social security - the taxation (including inheritance tax and stamp duty) and benefits systems - are, however, reserved to the UK. This, in effect, creates two distinct streams of housing policy being implemented in Scotland: one devised and operated at a UK level through the social security system, and one at a Scottish level.
There is significant overlap between the Westminster and Holyrood operations in terms of housing and regeneration policy. Traditionally, the Scottish Government has subsidised the development of the social housing sector by providing grants to develop low-cost rental properties. These grants come from a pool of money, the amount of which is determined and allocated to Scotland through the Scottish block grant by UK government.
We are now seeing a move towards alternative funding mechanisms, which can involve private sector debt finance being underpinned by a Scottish Government guarantee. To fund the loan repayments, social housing providers look to their rental income: a source of funds which is underpinned by housing benefit - a UK government subsidy.
In an independent Scotland, the Scottish Government would have full and sole responsibility for the economy, including investment in infrastructure such as housing, and the taxation and benefits system. Housing initiatives rely heavily on housing benefit to fund schemes; consequently, responsibility for housing benefit would likely have a significant impact on housing policy in Scotland.
Regardless of the political arguments in favour for and against the independence motion, it is clear that a ‘yes’ vote for Scottish independence will have considerable implications for the way Scotland’s social housing infrastructure operates. One system for funding social housing and its rents, as opposed to two interlinked systems, might well deliver benefits for Scotland, by providing a holistic service and a more joined-up approach.
It may also present Scotland with the opportunity to diverge more from practice in England, to best meet Scottish needs and interests. Of course, the proof of the pudding is in the eating - we cannot definitively predict the quality of the social housing landscape in an independent Scotland, we can merely hypothesise.