A cruel squeeze

The Scottish Budget was announced on 3 February and included the 2010/11 spend on housing. It was, as we predicted here at the Scottish Federation of Housing Associations, a Budget containing a significant cut in the amount of money available for new homes in Scotland.

As the effects of the recession really start to bite, all housing associations in Scotland need to take the temperature of how the public spending squeeze will affect the communities they serve.

While the Scottish Government maintains, quite reasonably, that it has stuck to its planned three-year spending commitments for housing, the bottom line is that with this level of spending, we will not achieve the 10,000 new affordable homes that Scotland needs, this year or next.

At present, Scotland spends around 1.6 per cent of its budget on homes - the SFHA would like that increased to around 2 per cent.

The most recent figures from the Scottish Government show that just 4,913 new homes were built by housing associations and local authorities in Scotland in 2008/09. That’s only half the new homes we need to tackle demand - the same government statistics show more than 200,000 applicants languishing on local authority waiting lists.

We face the prospect that the way we fund housing in this country may have to change radically. Unless the Scottish Government can build more homes for the same budget, the situation wherein 200,000 people are on waiting lists and we are building less than half the number of houses that so many commentators agree are needed will continue in Scotland.

So what do we do? The housing association grant model has been with us for such a long time that it can be difficult to see past it. This, though, is what we must do if we are to be part of the solution of working in more straitened times.

The SFHA is already engaged with the Scottish Government and policy makers on how to frame these questions. A paper will be launched at the Chartered Institute of Housing Scotland conference in March, laying out the current state of business development in the sector. It will also point to some options for change.

I would urge every chair, chief executive officer and finance director working in the sector to consider the implications of this report.
Key questions include: how do we continue to provide the highest level of housing, landlord and associated services? How could the funding models change to enable us to get more for less? How do we ensure that the needs of tenants and communities remain at the forefront of our work?

The SFHA is pleased to support Inside Housing’s House Proud campaign which makes the case for investment in housing. For all that’s been said about the need for change to funding models, we are in great danger of knowing the price of everything and the value of nothing. It is imperative that we find ways of demonstrating the value of the housing association product and proving our worth in areas of public policy.

Jacqui Watt, chief executive, Scottish Federation of Housing Associations