1. Why is the Scottish Government proposing Investment Reform?
Reforming the way we invest in housing associations is a big part of getting better value from our investment and increasing the supply of new affordable homes.
We propose to concentrate the majority of development in the hands of specialist Lead Developers, to enable them to take a more strategic and longer term view and develop more efficient ways of working.
2. What happens after the consultation closes?
After the consultation closes, the Scottish Government will consider the responses and publish a summary. It will meet both COSLA and the SFHA to further discuss the responses and the implications.
3. Why propose Investment Reform now, in the middle of the credit crunch?
The consultation invites views on whether structural reform should be delayed because of the credit crunch. However, demand for affordable housing is rising and our resources are limited. It's important to make sure that tenants and taxpayers are getting the best value possible for their money as soon as possible.
The introduction of Lead Developers, and longer-term plans for investment, will aid the Scottish construction industry by providing greater certainty for individual firms. We will also look to Lead Developers and consortium members to improve the use of financial assets and increase the sector's resilience to risk, both very important in the current economic environment.
4. What will the changes mean for Housing Associations?
We have consulted the Scottish Federation of Housing Associations and individual associations in developing our proposals, which are designed to build on the strengths of the sector in Scotland.
We want RSLs to group into consortia for development purposes. All members of consortia will be able to access a future supply of new affordable homes, though some RSLs may choose instead to concentrate on providing a top-class service to their existing tenants.
Those RSLs who become Lead Developers will have a guarantee of 5-year funding, more flexibility in the way they manage their business, and more freedom to pursue quality and efficiency.
5. How can this support the construction industry?
Our proposals include 5-year programmes by Lead Developers, who in turn will be able to make longer term commitments to constructors. This will help the construction industry plan ahead, maximise opportunities to realise economies of scale for example through applying modern methods of construction, and retain employment and skills in Scotland.
6. Won't many Housing Associations simply stop building new houses, jeopardising the Government's aim to maximise supply?
By realising efficiency savings and drawing on resources more effectively, Housing Associations who become Lead Developers or form part of development consortia will help to increase, rather than reduce, the overall supply of new affordable homes. Following investment reform some RSLs will choose instead to concentrate on providing a top-class service to their existing tenants.
7. Does this mean you're going to build lots of small, identical houses or even new high rises?
No. We want Lead Developers to increase the standard of housing they develop. We want to see houses that are cheap to heat, easy to live in and that don't hurt the environment. New homes that help to create and support communities, and developments which take account of tenants' needs and priorities.
8. How can these changes work if housing associations have to borrow more money?
We need to apply all the resources at our disposal more effectively than we have in the past. For housing associations, this means making their cash work harder, better cost control and not just borrowing more.
9. Won't these reforms mean the end for small, community-based Housing Associations?
No. Small housing associations will still be able, in some cases, to build new homes under the reformed approach to investment. But working with a Lead Developer will allow them to build more. Consortia will be expected to reach agreement on how the views of tenants and local communities are taken into account in new investment proposals.
And the key role of associations remains providing quality services to tenants in the existing stock and supporting their communities.
10. Will my rent go up?
We propose offering guidance on maximum rent levels in order to protect tenants from unaffordable increases.
There is no reason why rents should rise above the levels already planned by Housing Associations.
11. What will be the role of Local Authorities?
The proposals are intended to strengthen the strategic role of Local Authorities within the reformed housing and planning delivery framework which has been implemented over the last year. The priorities for investment will be set out in a series of regional prospectuses, based on Local Authorities' Strategic Housing Investment Plans. This will ensure a direct link between Local Authorities' strategic plans and the subsequent allocation of funding for developments.
12. Can Councils be Lead Developers?
Our proposed reforms are focussed on the housing association sector, and the Lead Developers will be Housing Associations. However, an option for the future would be to invite Local Authorities to become members of development consortia led by Housing Associations.
13. Can Councils get money to build new homes?
We welcome recent moves by some Local Authorities to develop new affordable housing. The Government has announced £25 million in funding to encourage those in a position to do so to build new council houses.