The Institute, the professional body for Scotland’s housing sector, says big question marks hang over the Scottish Government’s £50m ‘innovation and investment fund’ announced in February. The majority of this is meant to be targeted at building new social rented homes.
Housing associations have been told their £20m part of the fund is primarily for social rented housing, but CIH Scotland says that with a £40,000 per house grant benchmark compared to around £77,000 subsidy in recent years, the money will not go far in building for people in serious housing need.
“Most associations will struggle to make even half of any new provision ‘social rented housing’, as opposed to other tenures such as shared equity or mid market rent,” says Strang.
“We think the Scottish Government knows this only too well, but doesn’t want to say it.
“We fully acknowledge that money is tight and that new tenures will be an important part of the landscape in some parts of the country, but there’s an elephant in the room here – everyone knows the reality but neither Ministers nor officials are coming clean on it.
“With a subsidy benchmark of £40,000 per unit, you just can’t get 75% or 80% social rented housing out of this fund,” said Strang, the chief executive of Parkhead Housing Association in the east end of Glasgow.
“Other question marks over the fund include the fact little or nothing will actually be paid out in 2011/12 as the grant is not paid until completion – so is this a commitment rather than actual funding for next year?
“And in areas where associations have worked in partnership to develop, they will now be bidding directly against each other.
“Ironically, the fund could also mean less mixed tenure developments, because in some areas the social rented housing will have to be focused on locations where other types of housing just won’t sell.”
Strang, sharing a platform with Housing and Communities Minister Alex Neil, added: “There is now huge uncertainty over how we’re going to develop new, genuinely affordable social rented housing. The future funding of housing – either by councils or housing associations – will be significantly lower and it calls into question both the provision of housing and long term affordability at these subsidy levels.
“Yes, where possible we can cross-subsidise from mid-market rent and shared equity, but that is only if there is a local market for these, and in a large number of areas there might not be.
“The Scottish Government really needs to come off the fence and commit to research and set out criteria for what an affordable rent is. We are not asking for a straightjacket, but the Government must set a realistic benchmark. Then when it funds new development, it can ensure the funding packages allow affordability to be met.”
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