The next item of business is a statement by Paul McLennan on delivering the homes that Scotland needs. The minister will take questions at the end of his statement, so there should be no interventions or interruptions.
14:26
The future of housing in Scotland affects every constituency, every community and every family in the country. In a vibrant, cohesive and forward-looking country such as Scotland, all people should have a safe, secure and affordable place to live.
I begin by acknowledging the scale of the challenges that we face. I was deeply concerned by the statistics on homelessness and housing in Scotland that were published last week. Of course, the scale of the challenge in Scotland is mirrored across the United Kingdom, where we see that the demand for affordable and accessible housing is outstripping supply. We have made significant strides, but we are still grappling with several serious challenges.
First, housing affordability is an issue that is fuelled first by Brexit, then by inflation and the cost of living crisis. In many parts of Scotland, house prices and private rents have risen faster than wages, pushing families like never before.
Secondly, on homelessness, although we have seen progress in reducing homelessness in some areas, the root causes remain.
Thirdly, on housing supply and construction, we have a strong record on affordable housing delivery. Scotland continues to deliver 40 per cent more affordable homes per head of population than England does, and 70 per cent more than Wales. However, there is no denying that house building is challenged by the increased costs of supplies and high interest rates. Those problems have been made in Westminster and have impacted on housing supply of all tenures.
Fourthly, on quality and sustainability, as we push to meet net zero targets, we must not overlook the need for high-quality places to live or the environmental sustainability of our housing.
To tackle those challenges head on, we have significantly stepped up our response. In May, we declared a national housing emergency. In June, I set out a plan to tackle the emergency under three strategic pillars. First, we need more high-quality permanent homes. Secondly, we need to ensure that we have the right homes in the right places. Thirdly, we need everyone to have a settled home, responding to the real challenge of homelessness.
I am pleased to outline the steps that we have taken and the further action that we are taking. However, let me be clear that solutions that are bold, innovative and collaborative rely on all partners to consider how they can best support the delivery of housing for people across Scotland.
I want to talk about investment. Under the first pillar of our housing emergency response, the Government is taking steps to unlock investment to put housing on a sustainable footing for future generations, while noting that short-term decisions taken at Westminster can continue to hamper our ability to deliver. In April this year, I established the housing investment task force to take that work forward. The Scottish Government has committed £100 million as a basis that can grow, with institutional investment, to at least £500 million to support the construction of approximately 2,800 mid-market rent homes.
That approach shows that the Scottish Government is prepared to do things differently in order to deliver more efficiently and to create the structures that are needed to allow institutional investment to flow. Today, I am pleased to announce a further investment of £22 million in affordable housing through our charitable bond programme. Those bonds are issued to affordable housing providers, which then pay interest, which we invest directly in our affordable housing supply programme.
That innovative funding mechanism enabled an additional investment of £71 million of charitable bond donations last year alone. It is an example of how we can make a real difference to people’s lives when we have the levers to do so, by taking bold steps to offset budget cuts and build houses. However, Westminster has cut financial transactions. The funding that we use for that investment has been cut by 62 per cent since 2022. Let me repeat that: there has been a cut of 62 per cent since 2022. The First Minister raised the issue of financial transactions on two occasions with the Deputy Prime Minister when they recently met, and then wrote to her on the topic in August.
We will continue to do everything that we can within our powers to boost delivery, but tackling the housing emergency requires a joint approach between the Scottish Government, the new United Kingdom Labour Government and, of course, local authorities.
I want to talk a little bit more about rural areas. On the second pillar, which is about the right homes in the right places, we know that delivering increased housing supply in rural areas brings additional challenges. However, between April 2016 and March 2023, the Government delivered more than 10,000 affordable homes in rural and island areas. We published a rural and islands housing action plan at the end of 2023, and I have since worked with partners, including rural employers and local authorities, to step up our response.
This year, we will continue to fund community housing trusts jointly with the Nationwide Foundation—through a funding package that is worth almost £1 million—to bring forward community-led housing projects. As recently as 20 September, the Deputy First Minister opened the second phase of an affordable housing development at Kilbeg, which is Skye’s first new village for a century.
On homelessness, voids and acquisitions, like all members, I am deeply concerned to read statistics on the number of households who are facing homelessness in Scotland. I do not underestimate the personal impact on every individual who is represented in those statistics. That is why we are scaling up our housing emergency response to deliver help where it is most needed. Despite homelessness pressure, in March last year, local authorities reported more than 9,000 vacant social homes, most of which could be re-let at some point. We are all agreed that those homes need to be brought back into use as a matter of priority.
Local authorities can now take direct action on that, after the Scottish Government allocated an additional £40 million in 2024-25 as part of the overall package of nearly £600 million. We asked the Convention of Scottish Local Authorities for a targeted approach to reflect the criticality of taking decisive action, which has led to 80 per cent of the funds being allocated to the five local authority areas with the most sustained temporary accommodation pressures. Those are Edinburgh, Fife, Glasgow, South Lanarkshire and West Lothian. That approach will maximise the use of existing housing stock and minimise turnaround times for vacant social homes.
Under the third pillar of our emergency response, last month’s programme for government committed to providing £2 million in additional support for local authorities to bring properties that are purchased under acquisitions funding into use as quickly as possible. We asked COSLA to target that funding at the local authorities that are facing the most significant and sustained temporary accommodation pressures, in order to accelerate the pace of change. I am pleased that COSLA has agreed and will inform local authorities of their allocations as soon as possible.
In the past year, the number of homelessness applications in Glasgow from those who have been granted refugee status or leave to remain has nearly doubled, from 1,384 to 2,709. Last week, Susan Aitken, the leader of Glasgow City Council, wrote to the UK Home Secretary to say that Glasgow has been “immeasurably enriched” by having refugees in its communities but has not received a single penny in funding from the Home Office to deal with the impact that its decisions are having locally on housing and homelessness services. The Cabinet Secretary for Social Justice has raised that issue directly with the Home Secretary.
Our Housing (Scotland) Bill underpins our entire approach by seeking to introduce new homelessness prevention duties. This morning, I had a meeting to talk about that with Crisis and actual practitioners—that was an important step forward. The bill seeks to ensure that partners act earlier, act together and prevent people from becoming homeless in the first place. To ensure that local authorities can prevent homelessness where possible and respond swiftly when it occurs, this year, we have provided more than £130 million to local authorities, in addition to funding for the delivery of homelessness services through the block grant, to support them with their statutory duties.
Discretionary housing payments are also a vital tool to reduce poverty, safeguard tenancies and prevent homelessness. This year alone, we are making more than £90 million available to local authorities to mitigate UK Government policies such as the bedroom tax and the benefit cap, and to meet shortfalls in the local housing allowance rate, which we know is one of the biggest drivers of homelessness risk. That funding could equate to more than 700 new-build social rented homes or more than 1,300 acquisitions under our supply programme.
In progressing our proposals for rent control through the Housing (Scotland) Bill, we will ensure that rents are stabilised in the private sector, helping to support households. To ensure that we have a system of rent control that works for a thriving rented sector in Scotland, we will introduce amendments at stage 2 that will clearly set out how rent increases will be capped in areas where rent controls apply. That will happen in a way that provides certainty for tenants and landlords, while also encouraging investment.
Although the Government pulls out all the stops to tackle the housing emergency, we simply cannot hide the fact that it is hampered by a legacy of disastrous Westminster decisions: a 9 per cent capital budget cut, the bedroom tax, the local housing allowance freeze, inflationary pressures from UK Government budgets driving up mortgages, workforce supply problems driven by Brexit and, of course, asylum backlog pressures driven by Home Office decisions. All of that is forced on Scotland, reducing our capacity to go further.
Just as the Scottish Government has recognised the housing emergency and the responsibility to act, so must the UK Government. In just four weeks’ time, the UK Labour Government will set out its budget. Two decisions in that budget—scrapping the bedroom tax and permanently upgrading local housing allowance—would have an immediate and significant impact on lifting people out of temporary accommodation and preventing homelessness. I call on the UK Government to do the right thing and end those Tory measures.
The minister will now take questions on the issues that have been raised in his statement. I intend to allow about 20 minutes for questions, after which we will move on to the next item of business.
I would be grateful if members who wish to put a question would press their request-to-speak buttons.
The minister will know that, since his appointment, I have been trying to work constructively with him. However, I have to say that, after eight years as an MSP serving in this Parliament, I have never heard a more out-of-touch statement being delivered by a Government minister.
The minister stated that
“we have seen progress in reducing homelessness in some areas”
Progress? After 17 years of this Scottish National Party Government, 15,000 children are homeless in Scotland today, and homelessness has reached its worst levels since records began. The statement was, simply, complacent.
The minister singularly failed to mention the one negative policy intervention that housing associations, home builders and investors have told him and, I know, all the cabinet about—the Scottish National Party-Green rent controls policy. That policy has resulted in the total collapse in construction of mid-market rent homes, and in housing associations not building new homes and having to rewrite their whole investment plans—not to mention investors seeing Scotland as being closed for business.
The Scottish Property Federation estimates that £700 million in residential investment has been paused or lost due to the rent controls policy. Property developer Chris Stewart has said that Scottish Government ministers are responsible for a loss of more than £3 billion of investment, mainly in the build-to-rent sector, through the imposition of rent controls.
We need change and action. I therefore ask the minister whether he will take forward two changes. Will he agree to review national planning framework 4, which is now slowing down investment? Every house builder is saying that they cannot get access to land and are moving out of Scotland. Many Scottish home builders are now building more homes in England.
We also need the minister and the Government to accept that rent controls have failed Scotland and are failing renters. Will the minister make sure that the Housing (Scotland) Bill addresses that and, if need be, that rent controls are removed?
I come back to my statement. I think that, when I made the statement and talked about setting up the housing investment task force, I recognised the role of institutional investment. That work is incredibly important and will continue. Miles Briggs and I had a chat about that when we met last week. The member is also aware from the chat that we had last week that discussions are still on-going on that particular point.
I come back to the point that I made in my statement: in order to ensure that we have a system of rent control that works for a thriving rented sector in Scotland, we will introduce amendments at stage 2 of the Housing (Scotland) Bill that will clearly set out how rent increases will be capped in areas where rent controls apply. That will happen in a way that provides certainty for tenants and landlords while also encouraging investment.
I take the member’s point and we will continue to have discussions, as I promised him last week. I will also continue to have discussions with investors.
The programme for government also mentioned the investment of £100 million in homes for mid-market rent, which will bring forward £500 million in institutional investment. We have a proven record on that and will continue doing it.
The minister said that he is “deeply concerned by” the devastating “statistics on homelessness”. I remind members that the minister is not a social commentator; he is the minister who is responsible for those devastating statistics. The minister has presided over 40,685 homelessness applications in a year and 10,110 children are in temporary accommodation. The number of children living in bed and breakfasts has risen tenfold in three years and we have seen the worst yearly start on record for housebuilding, with completions down by 17 per cent in a year. Housebuilding starts in both the social and private sectors are the lowest they have been since the year to the end of June 2013.
Last week, the minister said that he accepted responsibility for the level of homelessness in Scotland. In the light of the shocking failure to get a grip of the housing emergency that is engulfing Scotland, and with more than 10,000 children living in temporary accommodation, will the minister take actual responsibility, stop blaming others and resign?
I take my responsibilities very seriously, but there must be a partnership approach with the UK Labour Government, which has promised change and has a role to play.
First, I will speak about the actions that we have taken. I mentioned the £22 million in charitable donations, which bring forward additional funding—[Interruption.]
Give me a moment, minister.
It would be much appreciated if members would cease speaking across the aisles and instead let us hear the minister.
I also spoke about the role of acquisitions. For example, last July we announced additional funding for acquisitions, which brought forward more than 1,500 properties in areas across Scotland. I also spoke about the additional £40 million this year and touched on the targeted approach in Glasgow, Edinburgh, Fife and other local authorities. There will be £40 million this year and next. I spoke about the £100 million commitment in the programme for government, which will bring forward an additional £500 million.
One key thing that I spoke about was work with partners. That targeted approach was a key part of our discussions with the Convention of Scottish Local Authorities. We had discussions last year and wanted to spread that out across other parts of Scotland. It is really important to me that we have that targeted approach.
I turn to the role of the new United Kingdom Labour Government, which can make a difference. We spoke about the 9 per cent cut in the capital budget. Scotland suffered a 62 per cent cut in its financial transactions—62 per cent—but Labour can change that in the budget. The bedroom tax—[Interruption.] Mr Griffin, you now have responsibility. It is not the Tory Party in Government now. You have responsibility now. It is up to your Government to do that.
Please always speak through the chair.
I apologise.
In a matter of weeks, you have responsibility to end the freeze on the local housing allowance. We spoke about asylum. You know about the pressures in Glasgow, where the number of asylum seekers increased from 1,384 to 2,709—almost doubling, with a 96 per cent increase.
I have highlighted the actions that we have taken, but the UK Labour Government must look at the issues and you must play your part. You cannot go back to talking about the Tories: it is time for your choices and your decisions. Now that you have that choice, we hope to see a difference in a number of weeks.
I remind members of the requirement to speak through the chair at all times.
Today’s announcement is yet another example of the SNP Scottish Government’s determination to do all that it can, within the powers that it has, to deliver for the people of Scotland. Will the minister elaborate on the detail of what was set out in his statement?
I mentioned the £22 million investment in the charitable bond programme to increase investment in affordable homes and to deliver more housing. That has enabled the Scottish Government to invest in two new bonds, thereby providing loan funding to Link Housing and to Cairn Housing Association to support the development of 159 new homes.
Since 2014, the Scottish Government has invested more than £482 million in 40 charitable bonds, which have generated almost £140 million in charitable donations. The new investment will generate a further £7 million in charitable donations, which will be used in addition to investment via the affordable housing supply programme.
Last year, we were able to use more than £71 million-worth of charitable bond donations to supplement our affordable housing supply programme budget, which will support delivery of more than 600 housing association and social rented homes.
I come back to the point that the way that we fund that is through financial transactions, and that budget was cut by 62 per cent. Labour has the chance to reverse that in its budget in three or four weeks. Let us hope that it does.
The minister will be aware that house building is down by 15 per cent here in the Lothians. Each property that is built in the Lothians now costs an extra £30,000. One of the reasons for that is the inefficiency of the planning system. In Manchester, the average planning application takes 16 weeks, but in Glasgow it takes 60 weeks, which is because your Government has stopped funding local government properly. Will the minister discuss that with his colleagues and fund councils properly, so that a number of the planning officers who have lost their jobs can be re-employed?
Always speak through the chair, Mr Balfour.
A couple of points were made there. One was about planning—Mr Balfour will be aware that Mr McKee is responsible for planning. I will certainly raise that issue with him. He has been talking to Homes for Scotland about the proposed planning hub, for example, and discussions continue on that.
If Mr Balfour is talking about the increased cost of building, can I remind him of Brexit and its impact on that cost?
It is nothing to do with that.
It is everything to do with Brexit. If he spoke to contractors, Jeremy Balfour would know that it is everything to do with that. I remind him of Liz Truss’s disastrous budget, which she still stands by, that pushed interest rates up to where they are. That has had the biggest impact on house building, and we are still suffering in that regard. Mr Balfour has a cheek to bring up these issues when his party brought forward Brexit and the disastrous Liz Truss budget.
Scotland’s capital budget, which is used to build affordable homes, faces a 9 per cent cut from the UK Labour Government. Will the minister set out in real terms the impact and pressure that that is placing on our ambitions to build affordable homes?
As Jackie Dunbar has said, Scotland’s capital budget, which builds affordable homes, faces a 9 per cent cut from the UK Labour Government. Previous capital cuts to the Scottish budget meant that difficult choices had to be made, and contractual legal commitments were prioritised. The impact on the housing budget is clear to see, and that has stymied the pace and scale at which we can deliver affordable homes.
In my previous answer, I mentioned interest rates, which are still at a high. We know from our local authority and health partners that there is capacity for more investment to deliver identified local strategic priorities, should we receive additional capital and financial transactions funding—again, I come back to the 62 per cent cut in the financial transactions budget, which Labour could change in a number of weeks. We continue to call on the UK Government to recognise that and to increase our allocation.
The minister has noted the pressure that the granting of refugee status to 2,709 people has put on homelessness services in Glasgow over the past year. However, I note that there are 2,641 long-term empty homes in Glasgow at present. Will the Government therefore introduce emergency legislation to force the compulsory sale of those unused homes and accelerate the mass compulsory purchase orders on those properties?
I have mentioned the funding that goes to Glasgow, and I will come back to a number of Mr Sweeney’s points. On empty homes, we have contributed £11 million to bring 9,000 empty homes back into circulation, including in Glasgow. We have talked about the funding that Glasgow gets and the additional funding in relation to dealing with homelessness issues.
On acquisitions, Glasgow’s increased allocation will make a difference in that regard. There are two ways in which we can look at the issue. There is flexibility through the additional funding, which can now be used to tackle voids. Previously, it was just for acquisitions, but now it can be used for voids. Glasgow City Council has the ability to pick that up with the housing associations, which I know it is doing at the moment.
We have tried to be as flexible as possible with the funding. We are doing work on empty homes. As Paul Sweeney will know, empty homes and voids are quite separate things. We are doing work on empty homes, as I have said, including through the additional funding, which gives Glasgow the flexibility to look at voids as well as acquisitions.
The Scottish Government spends more than £90 million every year on mitigating the bedroom tax, alongside the welfare cap, thanks to the Tories, and now thanks to Labour. Will the minister tell us how many one-bedroom, two-bedroom and three-bedroom homes could be built for that sum of money if we did not have to spend it on protecting Scotland from Tory—and now Labour—policies?
The member makes a point about the £90 million. I note that it is £90 million this year, but it was also £90 million last year, the year before that, the year before that and the year before that. As I said, we are spending £90 million to mitigate the welfare cap. I am unable to break down the figures by house size but, on average grant investment levels, we would expect £90 million to deliver at least 700 new-build social rented homes or more than 1,300 acquisitions.
Those are not just numbers; they represent 700 or 1,300 households who could be benefiting from safe, warm homes in which to raise their families. We could have had 700 new homes last year, 700 new homes the year before and 700 new homes the year before that. I note again that Labour has the ability to change the situation in its budget in three or four weeks’ time.
I thank the minister for providing advance sight of his statement. Given that it is possible to create three homes from existing properties for the price of one new build, we should certainly be prioritising the 9,000 vacant social homes. It is good to hear what the Scottish Government is doing in that regard, but what about the more than 40,000 empty properties and vacant spaces above commercial properties that could be homes? I would appreciate hearing from the minister on what the Scottish Government is doing to support communities and councils to create three homes for the price of one.
That is a really important question. The member and I have discussed that issue previously. I will comment first from a city point of view and then from the point of view of rural communities.
Our cities are going through a period of change, and there is a real opportunity to look at how we can maximise housing opportunities there. That can be done through looking at the local housing strategy and how we break that down.
In rural communities, we have talked about Midsteeple Quarter in Dumfries, which is a prime example of how that process has worked in the past. Again, it is a case of working closely with local authorities, but it is also about encouraging them to look at such opportunities. There is flexibility in the funding, whether that is from the rural housing fund or the affordable housing supply programme. We encourage local authorities to look at opportunities in their town centres. The issue is not just about housing; it is about broader economic development and placemaking.
Will the minister expand on the impact of the freeze in the rates of local housing allowance? What effect has that had on those private sector tenants who need support most? How are inflation, merciless budget cuts from Westminster and the looming prospect of continued austerity under Labour affecting, and how will they continue to affect, our ambition to ensure that everyone has a warm, safe home?
The freeze in local housing allowance rates ended in April 2024 and rates have now been realigned with the cheapest 30 per cent of local rents. However, the Scottish Government and others, including homelessness and anti-poverty organisations, would like clarity on what will happen at the end of 2024-25. The cycle of freezing and unfreezing local housing allowance rates is unhelpful to renters. It leaves low-income private renters living in uncertainty about whether they will be able to afford to pay rent in the future, which affects their ability to plan and put down roots. We would like local housing allowance rates to permanently increase in line with at least the cheapest 30 per cent of local private rents every year.
Seventeen years on, the minister has the temerity to come here today, pretending to have a plan to match the scale of the housing emergency that his Government created. He spends time investing in excuses and blames everybody else rather than finding solutions and building homes here. The Housing (Scotland) Bill has the potential to further stifle investment. When exactly is he going to tell us what the amendments to that bill, which he talks about endlessly, are actually going to be?
First, I come back to the point that I take responsibility for that. However, I say to Mr Rennie that it comes down to partners as well. Local authorities have their part to play, as do the UK Government and organisations such as the housing coalition that we are working with at present. Mr Rennie mentioned the amendments. We talked about them last week, and I gave him an approximate timescale in that regard. I take responsibility, but others need to do that, too.
I talked about the action that we are taking, including the provision of the £22 million of funding that we announced today, the £80 million acquisition, the £100 million commitment to mid-market rent and the additional funding for local authorities to tackle that specific issue. I take responsibility for that, but we need help from partners to deliver it, too.
I remind members of my entry in the register of members’ interests: I provide well-maintained and tenanted housing in Moray.
Given that Patrick Harvie, in his misguided legislation regarding landlords, forced up to 10 firms to move south of the border to build houses for let, what specifically will the Government do to arrest the decline in the private rented sector, which has seen the number of privately rented homes fall from 360,000 to 300,000?
I will pick up on a couple of points. One is about the housing investment task force, which is an important part of how we bring institutional investment back into Scotland. We have institutional investors who are part of that group.
I mentioned the opportunities that we are considering in relation to mid-market rent—we have committed £100 million to that, which will grow to £500 million.
On the rural aspect, we spoke to Scottish Land & Estates, which has submitted some thoughts and proposals on how the rural issue can be addressed, and, last week, I met Mr Briggs to discuss the Housing (Scotland) Bill and where rent controls are. I mentioned that we are still looking at the issue at the moment, and we will come back to him in due course. I am happy to meet Mr Mountain or to discuss that point with him through Mr Briggs.
On 8 July, the Chancellor of the Exchequer, Rachel Reeves, said:
“We need the private sector to build homes. We’re not going to be in the business of building those homes directly.”
The Deputy Prime Minister contradicted that to some extent three weeks later. Amid the UK Government’s confusion, has the minister been advised of any Barnett consequentials that would accrue to this Parliament should the UK Labour Government take forward a coherent affordable housing strategy?
No—not at this point. That comes back to the point that I made before about some of our budget asks, which are incredibly important. I will repeat them. They relate to local housing allowance, the 9 per cent budget cut and the 62 per cent cut in the financial transactions budget. Those are the only issues that we have raised at the moment, but, at this stage, I have had no update on or any requests about consequentials from the UK Government.
Given the limited amount of capital funding that is available and the fact that we have a housing emergency, will the minister and his colleagues consider moving money from the roads budget—especially the budget for the A9—to housing? It seems that housing is much more important than improving that road.
That is an interesting comment. That would be for the Cabinet to discuss. As I said, one of the key things that I have been looking at is how we can bring additional capital into the system.
I talked about the housing investment task force, the £100 million mid-market rent proposal that we are looking at and today’s announcement of the £22 million charitable bonds.
We have heard quite a lot of blame this afternoon, but that will be cold comfort to the 17,000 wheelchair users who are in unsuitable homes and the 40,000 disabled people who are on social housing lists. Despite that, the Government is relying on 25-year-old accessibility standards and has cut the adaptation budget by 25 per cent.
Thousands of disabled people across Scotland are stuck in unsuitable homes because the Government is failing to act. Is the Government still committed to a new cross-tenure design standard? If so, when will it be delivered? What assessment has it made of the impact of the most recent budget cut to stage 3 adaptations funding?
First, it is not blame; we are taking responsibility. We share that responsibility and take ownership of it, along with the other key partners that I mentioned, such as local authorities and the UK Government.
One of the key things that we are trying to do is to ensure that local authorities pick up on adaptations and that the issue is included in their local housing strategies. On my visits to different parts of Scotland, I have found that some local authorities are better than others in that respect. We cannot have a postcode lottery, so we need to ensure that that is part of the local housing strategies.
I can come back to the member on the other points that she raised.
That concludes the ministerial statement.
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