The Scottish Government

Chartered Institute of Housing Conference

Minister for Communities Rhona Brankin

Chartered Institute of Housing Conference

Aberdeen Exhibition & Conference Centre

Tuesday, March 13, 2007

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Thank you for inviting me to address this year's conference, the leading event in the Scottish housing calendar.

This is an extremely important point in the political and financial cycles. It is the time when the electorate reflects on performance and considers the competing offers the different political parties offer for the future of Scotland. Central to that question is what sort of communities do we wish to build? And what will be the quality of life we secure over the next four years?

This is the right time to look forward and consider how we best build on the substantial progress we have made in the eight years since the Scottish Parliament came into being and the Executive first set out its ambitions. How we best build on milestones such as the Housing Acts, our investment programme and the Housing Policy Statement.

Making progress: building a legacy

Devolution has given us the opportunity to make a real difference to people's lives, to improve their quality of life and to change the housing landscape in Scotland. Through progressive legislation, increased and focused investment and close partnership working with local government, housing associations, tenants and developers we have begun to tackle difficult issues and brought about real change. Devolution has enabled us to frame a Scottish housing policy that meets the needs of Scotland's people. As we know housing is about more than bricks and mortar, it is about us, people, and the communities in which we live.

We have seen a number of major pieces of Scottish housing legislation come into force. Some of these, such as those on homelessness and anti-social behaviour, place us at the forefront in Europe in terms of their ambition and scope. We have also seen major increases in public investment in housing and considerable progress on tenant participation and the fight against fuel poverty. The transfer to community ownership has improved the housing conditions of tens of thousands of tenants. And our recent Planning Act represents a root and branch modernisation of our planning system - changes which will benefit land supply for housing.

All substantial changes, driven by the three major themes of securing quality housing that is both affordable and sustainable. Delivered through the hard work and ambition for the communities in which you work and represent.

And in taking these three themes forward we face a number of challenges.

One of the clearest challenges is responding to housing need. I am acutely aware of the concerns about the shortage of affordable homes in many parts of Scotland; whether that is housing for rent or for ownership. And I am certainly aware of the pressures here in Aberdeen. Both as a Minister and as an MSP in the Lothians I know the real pressures that people are facing while trying to secure one of life's most basic needs. Pressures that we are determined to tackle by ensuring that our approach to housing, regeneration and planning are consistent, complement and reinforce one another.

Investment

Increased resources have helped realise our joint ambitions. Our Affordable Housing Investment Programme has been fundamental to the delivery of quality homes that are affordable for those on modest incomes. Since 1999 we have steadily increased our funding levels to our current commitment of investing £1.2 billion in the current three year spending period.

This level of investment has enabled us to increase significantly the number of affordable homes that we were able to fund - rising from 18,000 over the period to 21,500.

Such large figures trip off the tongue, so the question is what does this really mean? The reality is that the £487 million we are spending in the current year will provide 7100 homes - real homes that will help 135 individuals and families every week to get the keys to a new home, a stake in their community, a better future.

We remain on course to meet the ambitious delivery targets that we have set ourselves and I am delighted to be able to announce that the investment programme in 2007/08 will be a record £584 million - or over £11 million every week - providing 8000 new and improved homes across Scotland. In practice, this huge increase next year will see us exceed our £1.2 billion spending commitment. The detailed breakdown of the programme is being published separately but suffice to say that levels of investment in both urban and rural Scotland will reach new heights.

Homestake

One of the major successes from the Investment Programme has been the shared equity scheme 'Homestake' which makes homes affordable, by helping those on modest incomes, including first time buyers, onto the property ladder.

We have taken a pioneering approach to this shared equity product in Scotland and, by enabling owners to select a size of stake that best suits their circumstances, we have developed the most flexible scheme of its type in the UK.

The size of demand for Homestake shows that we have found a product that offers what many people need. The response across Scotland has been tremendous and we have been able to provide 1,000 homes in the last year using this route, well above what we had originally anticipated.

The programme for 2007-08 builds on this level of demand by providing for 1,500 homes through the Homestake model - a significant increase over the current year. I hope that others will also recognise the size of untapped need in this area and I urge them to take the principle forward, expanding provision with additional investment wherever possible, and introducing imaginative shared equity products of their own.

Homestake takes two main forms. 'New Build' Homestake adds to our overall new supply and forms the bulk of our provision. It is available right across the country - and I have already seen the real difference that it is making.

And we have also been piloting an 'Open market' version of Homestake to allow buyers to purchase existing properties in their area. The pilot has been running in Edinburgh and the Lothians. It is still too early to take a definitive opinion on the impact of the scheme, but initial analysis suggests that the pilot should be extended to test the approach in some other housing markets in Scotland.

Therefore, I am announcing today that the open market Homestake pilot will be extended with an additional £10 million of investment and that the pilot areas will now include Aberdeen and the rest of Grampian, Perth & Kinross, Stirling and Highland.

This targeted expansion will give many potential first time buyers who currently find themselves squeezed out of the market because of their financial circumstances a better opportunity to compete for a home of their own that meets their needs. I know it will be welcomed in areas facing particular pressures like here in Aberdeen.

We are rightly placing an emphasis on meeting the aspirations of the many people who want to own their own home, though we also see renting a home as valid a choice as home ownership.

Planning and Land Supply

There is more to making sure that we have sufficient affordable housing than just funding and investment. And whole market solutions are needed if we are to overcome the wider issue of affordability. An adequate supply of market housing at the right price, in the right place and of the right quality is just as essential. That is where the planning system is fundamental.

The 2006 Planning Act will revitalise the development planning system. It aims to strike a balance between the needs of communities and community involvement, with the need for development in support of a strong vibrant economy and a quicker decision making process. As a result we will have the housing and planning systems aligned together to more effectively support the provision of housing in the right places.

But the full impact of the new arrangements will take time to work through. That is why at last year's conference Malcolm Chisholm indicated that he would set up an Affordable Housing Working Group to explore what more could be done in the interim to make the housing and planning systems deliver.

I applaud the response and enthusiasm of the Working Group, it has certainly got to the heart of the issues.

Not surprisingly, access to an adequate supply of land for all sections of the housing market surfaced quickly as a key issue and the Working Group has been examining ways through which this obstacle can be overcome.

There is a strong feeling that many development plans are not reflecting adequately the true level of housing need in the area. There can be many reasons for this - from poor integration of Local Housing Strategies, housing needs assessments and development plans, to the understandable difficulties in allocating land for development in the face of local community opposition.

This issue cannot be ignored. There are many other reasons for housing pressures but this is one aspect where effective action could have beneficial results.

The review of Planning Guidance on Housing - which arose from the Working Group - will press home the message that a sufficient land supply must be identified where a housing need has been properly established. The review will also look at how guidance can speed up land release and the role of Ministers intervening when development plans do not reflect need adequately. A Stakeholders Group is steering the SPP3 review with a draft to be available for public consultation in the summer.

The Working Group has made progress on other fronts too and at our February meeting we discussed how that work will be taken forward over the coming months. It is a busy agenda but will include:

• Introducing a more consistent approach to the valuation of land
• Revising guidance on Local Housing Strategies and housing needs assessment
• Exploring mechanisms to improve the public sector's ability to assemble land and masterplan development

This is a substantial and important agenda which is already heralding major changes. For example, later this month I will be visiting some homes in my own constituency to see how efforts to transfer surplus public sector properties to social landlords are bearing fruit. The transfer of surplus Defence Estates properties in Poltonhall to Melville Housing Association will enable 20 families to find affordable homes in their own communities. While the technical changes matter, it is the improvements they make to quality of life for people and communities that count.

Sustainable Housing

In many respects, what is being built is of as much importance as how much or where and our commitment to sustainable housing is a major driver of policy, alongside questions of quality and affordability.

The publication of the draft UK Climate Change Bill, together with our own Scottish Energy Efficiency & Microgeneration Strategy will give renewed emphasis to the need for decisive action on climate change by improving energy efficiency.

The UK Climate Change Bill will enshrine into legislation the UK Government's existing commitment to cut carbon emissions by 60 per cent by 2050. Scotland will continue to play its full part in achieving this ambitious target.

From my previous post as Environment Minister I know that Scotland's homes are responsible for contributing significant carbon emissions. We need to take a leading role in ensuring that our homes produce fewer harmful emissions, while at the same time are warm and comfortable - and, indeed, lead to reduced fuel bills, particularly for those on low incomes.

Tackling climate change is central to our belief that sustainability must be at the core of everything we do. We are building the housing and communities of the future today - and we must ensure these are sustainable.

The revised building regulations which we will introduce in May will give Scotland the most demanding energy efficiency standards for new homes in the UK. Since 2002 our building regulations will have reduced carbon dioxide emissions from new buildings by over 40 per cent. A major achievement, while our new emissions targets will go much further and are set at a level that will encourage designers to make use of low or zero carbon technologies, such as heat pumps and biomass boilers.

Housing associations are often at the forefront of innovation in this area. For example, Communities Scotland will be supporting a partnership between the Highlands and Islands Community Energy Company and seven housing associations located across the country in the development of small scale wind farms. This project will pilot a new method of creating community owned assets and help to reduce the carbon footprint of the participating RSLs.

These projects are vital and I want them to be an inspiration to others. But the challenge of climate change means we must look ahead and achieve still more. My aim is that over the course of the next Parliament, to ensure we plan for sustainable housing to become the norm, with step by step targets and new codes and standards where appropriate - to make new zero carbon homes a reality by the middle of the next decade.

Achieving such high standards will have implications for existing construction practice and we recognise that we need to move at a rate that is achievable for the building industry and other stakeholders. I applaud the developers and Councils who are already actively engaged in pushing frontiers in this area - their trail blazing role will help us to develop a route-map to ensure that all new homes are low carbon.

This will be challenging - but we know it must be done.

Sustainability isn't just about energy though. It's about the social justice dimension too; of making homes that can accommodate our different needs. So our new building regulations will also include requirements to make homes more accessible now and easier to adapt in the future.

The Executive will move to requiring new housing developed with public funding to meet high standards of energy efficiency and sustainability.

We have already consulted on Communities Scotland's draft Sustainable Development Policy, which includes commitments to a low carbon approach to housing; proposals to incorporate sustainability into procurement; and research into carbon costing across the building programme. It proposes that we implement the 'EcoHomes' standard in new social housing from 2008. We have had a good response to this ambitious set of proposals and will publish a final version of the Policy very shortly.

We will also not ignore the challenges posed by carbon emissions generated by our existing housing stock - both in the social and private sector.

We have made significant progress towards our commitment to uprate the energy efficiency of the 615,000 homes in the social sector by 2015, as part of our work to implement the Social Housing Quality Standard. But we know we need to go further and make more progress.

Many older and vulnerable people have already benefited from our Warm Deal and Central Heating Programmes that make an important contribution to carbon saving. We have now provided free central heating to over 78,000 homes and insulated more than 315,000 properties and the work undertaken for these programmes, in a single year, could achieve an annual carbon saving of 48,000 tonnes.

From 2008, Energy Performance Certificates will be provided to all home buyers which will - for the first time - providing important information on the carbon and energy emission characteristics of every home on the market. This will provide a clear market signal in favour of more energy efficient properties.

Action on energy efficiency across the housing system will also go a long way to helping us meet our objective of ensuring safe, warm, affordable housing for Scotland's people.

SHQS & Stock Transfer

I mentioned that energy efficiency was one of the aspects of the Scottish Housing Quality Standard and I should re-emphasise at this point our full commitment to ensuring that all social housing meets the Quality Standard by 2015. During a Parliamentary debate last month there was a suggestion that the Executive was not resolute on this so let me make our position absolutely clear.

Our commitment to the 2015 target is solid. Quality housing is one of our main housing themes and our goal is to ensure that existing social rented stock meets a non-negotiable, decent, minimum standard.

The best way to improve the lives of tenants and their families, regardless of where they live, is to secure the decent, dry homes they need. This is essential if we are to regenerate our most deprived neighbourhoods, close the opportunity gap and build sustainable communities.

Conference, I am not dogmatic about how that investment should be achieved. There is no hidden Executive agenda to relieve councils of their landlord role. Quite the contrary, I want to go further. I want to work with Councils to use their housing and borrowing powers, working in partnership with other bodies to tackle the housing needs in their areas. I will listen to all ideas that help ensure that housing quality is improved to meet the Scottish Housing Quality Standard.

Stock transfer remains a key means for councils to obtain substantial new housing investment in their area. It is the only way to deliver debt write off, which could be the single greatest step a council can take to obtain substantial new housing investment locally. But whether councils choose to retain ownership of their stock and meet the Standard using their own resources, or opt for the community ownership route in partnership with an RSL, is a matter for councils and their tenants to decide.

Many councils can afford to retain ownership of their housing stock and meet the Standard using the new financial flexibility we have given them. That's fine by us - we do not support transfer for transfer's sake.

Since 2004 councils have been able to retain all capital receipts and, along with their new prudential borrowing powers, this means that they are able to prioritise investment to where it is needed most and make the most effective use of the resources available to them.

I know some councils are considering running their own building programmes. Indeed just last week Midlothian handed over the keys of the first house under their building programme. These have the potential to make a valuable contribution in some places. Local authorities must look strategically at local housing needs and work with local housing providers to deliver the best value solutions - regardless of whoever the housing provider happens to be.

However, for most councils investment must focus on achieving the Standard. And for those with high debt and high investment needs, our Community Ownership Programme is still the best route to securing substantial new investment. Five councils have now transferred ownership of all of their houses to RSLs, and another - Inverclyde - is due to do so later this year.

The early transfers are now delivering significant new housing investment on the ground and they are helping to keep rents affordable to those on low incomes, as Audit Scotland has confirmed.

For those councils who were unable to convince their tenants that transfer was in their best interests they still have to meet the Standard and for some, particularly those with high debt and high investment needs, this will be a challenging task. They are unlikely to be able to match the investment programmes and rental guarantees promised by the new landlords; but this was made clear to tenants before the ballot. There is no magic wand. Neither the Treasury which determines the funding rules, nor the Executive, will be able to write off councils' historic housing debt as suggested by those campaigners against Community Ownership.

I know some councils face a great deal of work in assessing how best to meet the Standard and the Executive will assist in identifying and assessing potential options. Solutions that may require tough decisions.

These councils will need to examine issues like the scale and timing of investment programmes, rents, procurement practices, prudential borrowing, the general efficiency of their housing management and DLO operations.

I encourage them to explore every option. We must work together to benefit tenants as it is the ends not the means that matter. What we are committed to is delivering a decent home for every tenant.

The Standard Delivery Plans of these councils are due to be submitted over the next few months and we will be discussing the contents of these plans with each council. I do not rule out any affordable options that could effectively secure improvements in tenants' living conditions in Scotland. We will be looking for signs of innovative approaches and genuine public sector reform.

Future of Social Housing

Of the many challenges social landlords face, perhaps the greatest is adapting to people's changing housing aspirations. Tenants today are very different to the tenants of thirty years ago, and the pace of change is not slowing. This change brings opportunities as well as challenges. It is for the sector to embrace this opportunity by offering more diversity and choice of affordable housing.

There is room for many different models and I know the good work and dedication of community based housing associations, providing a local service attuned to the needs of specific neighbourhoods.

There are also larger providers who are seeking to vary the housing they offer, and shaping a new dynamic future for the sector. For example, I welcome the contribution of providers like Dunedin Canmore, who are involved across the spectrum of affordable housing, providing social housing, for mid-market or market rent, and housing for low cost home ownership including Homestake.

This not only offers people the choice they aspire to, but by bringing in private finance helps deliver more affordable housing for limited resources. A lesson for us all.

Private Sector Housing

Devolution allowed us to move quickly to reform social rented housing in Scotland via the 2001 Housing Act. The 2006 Act now brings big improvements to private sector housing to ensure that the 70 per cent of stock in that sector plays its part in meeting housing needs in the 21st century.

Responsibility for housing condition rests with the owner, but local authorities are also essential to improving the stock - supporting those who need help and where necessary forcing specific repairs in the interest of the local community.

The Act also moves from a grant culture to an imaginative Scheme of Assistance approach that will help many more people break down the barriers that stop them carrying out repairs and adaptations to their homes. This will help more older, disabled and vulnerable people live in better quality, decent conditions, in their own homes.

The Act requires local authorities to state their strategies for improving private sector housing conditions in their areas. I know, from the work we are doing to develop guidance and regulations, that they are keen to make use of the powers that the Act gives them and that their strategic thinking is already moving in the right direction. I applaud their enthusiasm, as we develop the detail for implementation of these provisions next year.

We are bringing together good practice across the country, such as broad-based, one-stop assistance through Care and Repair as in Shetland and elsewhere, schemes to facilitate the management of common repairs like Edinburgh's Stair Partnership and the best approaches taken by councils to identify the issues and drive internal change - such as in East Dunbartonshire. We will also be working with local authorities to develop and pilot new approaches such as wider access to lending and helping owners identify contractors they can trust.

I encourage authorities to think more widely about the private sector and join up the opportunities offered by other parts of our private housing agenda. Let me give three examples.

The first is the opportunity provided by private landlord registration to revitalise the private rented sector. For the first time this gives local authorities a potent means of tackling the worst private rented housing. Landlord accreditation offers scope to raise letting standards and build a sector that will work with local authorities to contribute to meeting housing need. At the same time, the revised repairing standard and the Private Rented Housing Panel open the way for tenants themselves to ensure they have decent quality housing.

Secondly, there is the scope to deal with pockets of decaying tenements that can spiral into decline. The Tenement (Scotland) Act at last resolves many long-standing uncertainties about owners' responsibilities for common works.

And my third example is the opportunity offered by the Single Survey. Every year, the 10 per cent of owners who buy and sell will have a proper professional assessment of the condition and value of their property before they market it and will have similar quality information about the house they want to buy, before they budget for the purchase and decide what to offer.

This will be a powerful factor in making owners more aware of the condition of their property and their responsibility for its maintenance and repair. The Executive and local authorities will build on this increasing awareness, using the Scheme of Assistance and other tools to encourage a culture change amongst owners that will bring the desired outcome of good housing in the private sector.

Homelessness

Our commitment to ensuring that every unintentionally homeless person is entitled to permanent accommodation by 2012 remains resolute. We recognise the strong links between a sufficient housing supply and ensuring better outcomes for all homeless people.

We have already improved outcomes for many homeless people - and increased rights has inevitably meant more people coming forward for assistance. The most recent data indicates that this increase may be levelling out and I am encouraged by the success of measures taken to prevent homelessness and to find long-term solutions. We continue to work with local authorities to identify and share good practice on the wide range of activity which can impact positively on homelessness.

We know that the 2012 target is proving challenging to deliver but we have a moral obligation to meet this challenge and the interest shown by other European countries in our approach is testimony to what we have taken on. But, I do appreciate that some local authorities are facing real pressures as 2012 approaches and we are ready to support them wherever we can.

Spending Review 2007

I know from the experience in my own constituency how important our record spending on housing over recent years has been, and I am delighted to have been able to announce further investment in next year's programme. However, I cannot conceal that spending at this level is unlikely to continue. The forthcoming Spending Review will take place in a tighter fiscal climate and the reality is that public sector expenditure cannot continue to grow.

It is vital that we all meet the challenge of tighter resources with honesty and innovation. I know public sector reform is not easy, but it is the key to meet the changing needs of Scotland and deliver better outcomes for those with housing needs and delivering warm and affordable homes. It means maximising the benefit of public sector investment, taking whatever steps are necessary to deliver improved value. It will require tough decisions and clear leadership.

In setting the framework we are committed to working with you, across the housing sector, to ensure that there are no barriers to identifying the best response. In future, this may mean that more will be done to reward performance, linking support clearly to performance improvements.

I know that as housing professionals you are all dedicated and highly qualified, delivering high standards to some of the most vulnerable people in society. For us, public sector reform must have at its heart simplifying and rationalising services for those in need of affordable homes. It is about taking down traditional barriers and making it easier for you to do your job. It is about making a real difference for users by concentrating on the outcomes you can achieve and being flexible about the processes that deliver best.

Conclusion

This morning I have outlined some of our progress since Devolution began and set out the direction in which our housing policies are taking us. Scotland's housing needs are diverse, complex and constantly changing.

We are making a visible difference and that the policies we have in place are making a real difference to people's lives.

Investment is a major responding to changing housing needs and the record resources I am announcing today will play an important part. But we need fresh thinking and innovation too.

Our successes are the foundation for realising our ambitions. Significant challenges lie ahead which cannot be avoided but by working together we will ensure all housing in Scotland is of high quality, affordable and sustainable.

I wish you an enjoyable and productive conference.