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Why policy action is needed now to tackle poverty in Scotland

Scotland’s poverty problem remains a challenge with a quarter of children in this category. Housing associations can play a key role, but need certainty about policy, says Richard Jennings 

 

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Why policy action is needed now to tackle poverty in Scotland #ukhousing

“We want to commit to future investment in new social rented homes and have the financial capacity to do so,” says @CRE_MD @CastleRockEdin #ukhousing

Last week’s stark report from the Joseph Rowntree Foundation on poverty in Scotland over the past 20 years was a sobering read.

One in four children in Scotland are living in poverty and right now the numbers are rising.

A key finding for those of us working in housing is that the overall poverty rate is less in Scotland than in England after housing costs are taken in to account.

This is partly because there are more people in poverty living in the private rented sector in England with higher weekly housing costs. Also, the divergence in housing policy between Scotland and England means that social rents are lower in Scotland.


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The impact of the difference in social housing costs between England and Scotland is not driven by policy choices made in Scotland, where rent setting has remained broadly the same and rents and service charges have risen to reflect the cost of delivering the service.

It is UK government policy that has focused on convergence of social rents in England that has been the reason for their greater increase over time.

In Scotland we have benefited from a grant regime that values the role of social rented housing. Grant levels have increased during the past decade to a maximum of £72,000 today, with an average unit cost of £130,000.

Combined with clear delivery targets and planning policy supporting the delivery of mixed tenure developments, we have seen a steady supply of new social rented homes.

In addition, Scottish housing providers and the Scottish Federation of Housing Associations have worked together to develop a shared approach to evaluating housing affordability that is used to inform rent setting on an annual basis.

The Scottish Housing Regulator also pays close attention to the rent setting policy of social housing providers and this means that boards have to consider the impact on tenants.

At the same time, housing providers have invested in their stock to improve both the quality of homes and their energy efficiency to meet ever increasing statutory requirements.

“We want to commit to future investment in new social rented homes and have the financial capacity to do so”

This demonstrates that improvements in stock condition and the delivery of new homes can be achieved while rents remain fair.

In addition to the investment in social rent, the delivery of new homes in Scotland is not mono-tenure. There has been an increasing focus on the delivery of affordable homes for rent and market sale, with recent innovations such as the Mid-Market Rent Fund backed by a Scottish government loan rather than grant.

The growth of mid-market rent is a challenge to the private rented sector as it offers more affordable and higher standard homes to those on low to moderate incomes.

We want to commit to future investment in new social rented homes and have the financial capacity to do so.

This report is a timely reminder for the Scottish government that the time is now to set out a shared ambition post-2021 when the current programme comes to an end.

Richard Jennings, managing director, Castle Rock Edinvar Housing Association

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