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Investment in housing
30/05/2008
Planned investment of £1.5 billion is expected to create at least 21,500 new approved affordable homes by 2011, it was announced today.
Unveiling this year's Affordable Housing Investment Programme, Communities Minister Stewart Maxwell said the funding for the next three years was 19 per cent more than planned by the previous administration for the last three years.
He said that the present arrangements for subsidising Housing Association Grant - money from the public purse to build affordable houses - will be reformed to deliver better value for money.
He also said that, in the short term, Housing Association Grant (HAG) will be based on more realistic assumptions about the costs of housing associations and their alternative sources of extra funding.
A short-term working group will also be set up to streamline the management and operation of the existing Housing Association Grant system.
Mr Maxwell said:
"This is a mature, forward-thinking Government with a long term, strategic vision for housing provision in Scotland. We want to maximise our record planned investment of £1.5 billion over the next three years.
"Unfortunately, the previous administration's ostrich-style approach of burying its head in the sand has left this Government saddled with unsustainable inherited commitments.
"We need new and improved ways of working to achieve the 2012 target on homelessness, and in doing so, we will ensure that there will be absolutely no compromise on the quality or standards of new social housing.
"Housing associations have an important and central role in helping meet demand and they provide the majority of new affordable housing. I look forward to working with them positively to help achieve our ambitious plans for housing.
"I want to reassure the sector that what we're proposing will not mean the end to small-scale and local providers. Indeed, what matters is an organisation's ability to meet need and deliver services effectively and efficiently, not its shape or size.
"I firmly believe that housing associations can achieve these efficiencies and still deliver the quality of service for which they are renowned."
The Affordable Housing Investment Programme is allocated mainly to RSLs (Registered Social Landlords). Approximately 70 per cent of the programme is spent on helping RSLs to meet demand for new social housing for rent, on average subsidising just over two-thirds of the construction costs of each new housing unit.
Housing Association Grant per unit increased in real terms by 35 per cent in four years between 2002-03 to 2006-07.
The Scottish Government expects that at least 21,500 new affordable homes will be approved by 2011, the same number as planned by the previous Executive over the previous three years.
Subsidy levels in England, which in 2006-07 averaged £62,000 per house and less, are low compared with Scottish levels, which averaged £77,000, suggesting substantial scope to make savings, which will be used to build more houses.