Scotland mulls rise in new build grants

It is believed the government will make an announcement soon and it is rumoured the grant will rise to £30,000 a property. Last year it allocated £50 million to help councils build 2,300 homes for rent. In 2007 it said it planned to spend £1.65 billion on housing over the next three years.

Andrew Field, deputy chief executive of the Scottish Federation of Housing Associations, explained that at present councils have to take money from other budgets.

He said: ‘It’s a simple fact that a good quality home, which meets all the necessary building and energy efficiency regulations, cannot be built for the current subsidy of £25,000 per unit. The actual cost of building a house is in the region of £100,000, and councils are therefore cross-subsidising the extra cost from other budgets.’

Alan Ferguson, director of the Chartered Institute of Housing in Scotland, explained that councils had been subsidising house building and increasing tenants’ rents to pay for it.

‘It’s positive in that it should result in more housing and recognises that the programme of giving money to local authorities has been quite successful,’ he said. ‘Tenants’ rents have been put up to pay for new build so by increasing it [the grant], it will have less of an impact on other tenants.’

Michael Levack, chief executive of the Scottish Building Federation, believes it would not work if planned housing budget cuts went ahead.

‘On the surface, reports that the Scottish Government is looking to increase the level of grant per unit to encourage council house building is to be welcomed,’ he said.

‘But it will cut little ice if the total budget available to fund affordable housing doesn’t increase as a consequence. We’re facing a £200 million shortfall in funding for affordable housing in next year’s budget.’

Gordon MacRae, head of communications and policy at Shelter Scotland, the housing and homelessness charity, said ‘further details’ were needed to know if the cash would come from extra money or re-allocated funds.

‘We are aware of the ongoing discussions regarding raising the grant level for council housing,’ he added. ‘Any increase in subsidy must deliver for the thousands of people on house waiting lists.’

The Scottish Government is likely to pay the grant after the homes are built. A government spokesperson declined to comment.

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