Meeting of the Parliament

Meeting date: Tuesday, October 31, 2023

Official Report 1067KB pdf

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Rural and Islands Housing

The next item of business is a debate on motion S6M-11027, in the name of Paul McLennan, on the “Rural & Islands Housing Action Plan”.

14:22  

I am pleased to bring this debate to the chamber and to have the opportunity to provide an update on our approach to delivering the right homes in the right places for our rural and island communities. Providing access to high-quality homes that are affordable and meet the needs of people in the places where they want to be is central to the Scottish Government’s ambitions and is critical to supporting the First Minister’s three overarching and defining missions of equality, opportunity and community.

Housing of the right type, in the right place, can have a powerful and generational impact. It supports people to access the housing that they need, enables young people to stay in the communities in which they grew up and supports local businesses to retain and attract employees.

Our long-term housing strategy, “Housing to 2040”, has at its core our ambition for everyone to have a safe and high-quality home that is affordable and meets their needs, in the place where they want to be. That applies as much to rural and island areas as it does to urban areas.

Following the publication of “Housing to 2040”, we committed as part of the Bute house agreement to developing a rural and islands housing action plan. Over the summer, I met organisations including the Scottish Land Commission, Highlands and Islands Enterprise, South of Scotland Enterprise and the Scottish Council for Development and Industry. I thank them for their input and I thank everyone who participated for sharing their views. The groups and individuals who are part of rural and island communities know what works and what does not and have seen at first hand the difference that the right home in the right place makes. They have all shaped the content of our plan.

When I met some of those organisations, a key issue was the challenges of Brexit. It would be remiss of me not to talk about that, as it was mentioned on numerous occasions. We know that there are challenges ahead. Years of the United Kingdom Government’s economic mismanagement, coupled with a hard Brexit, have had a long-lasting and devastating impact on our rural and island communities. However, that will not stop our ambition, which is set out in the plan, and nor will it blemish our record of delivering thousands of affordable homes in rural and island areas.

The “Rural & Islands Housing Action Plan” provides a vital opportunity to take forward key actions to support housing and local economies and to help to accelerate inclusive economic growth. We are making available £3.5 billion over this session of Parliament to support delivery of 110,000 affordable homes by 2032, 70 per cent of which will be for social rent and 10 per cent of which will be in our rural and island areas. As part of our £752 million programme this year, we have also committed to invest £60 million in a national acquisition plan to help to increase the pace of delivering affordable homes.

A lot of good work has already been achieved through joint working and co-operation, which is delivering good housing outcomes for rural and island communities. Since 2016, the Government has supported the delivery of more than 10,000 affordable homes across our rural and island areas. During the summer, I visited housing projects in Gairloch, Fort Augustus, Shetland and Kelso and yesterday I visited a new affordable homes development in Guildtown, Perthshire, and I have heard first hand about the difference that those affordable homes have made to local communities.

Let me share some examples of how strong collaborative working has delivered more homes for our rural and island communities. Working with North Ayrshire Council, we have delivered the first new council homes on Arran for more than 20 years with 34 affordable homes in Brodick. North Ayrshire Council has let some of the homes to key workers, which helps them to live and work in the local area.

Working with Argyll and Bute Council and the Link Group, we have contributed to the delivery of a new development of more than 300 affordable homes in Dunbeg. All the homes have air-source heat pumps to provide affordable energy and to tackle fuel poverty in an off-grid area.

I have also seen first hand the 12 homes that the local community company in Fort Augustus has completed. The company is looking to deliver more community-led homes. I will touch on that later. I heard directly from a tenant what the homes meant to him: they allowed him to stay in his own home in his local community.

We have also supported Eildon Housing Association to deliver 57 energy-efficient affordable homes in Chirnside in the Scottish Borders.

Through our affordable housing supply programme, our affordable housing investment benchmark levels recognise the differential in costs to deliver affordable housing in rural and island locations, as opposed to city and urban areas. We are trying to be as flexible as possible.

I noted the minister’s point about finance. Will he share with me what activities he has been doing to ensure that the right finance with the right risk profile is available for small and medium-sized businesses, given that we want that breadth and diversity of providers?

I have been doing a number of things. About two weeks ago, I met 25 institutional investors in London to talk about opportunities to invest in housing in Scotland. The meeting was positive, and we are meeting them again very soon. That includes mid-market rent, build to rent and social housing.

I also met Scottish Financial Enterprise recently, and I have a round-table event coming up with it to talk about the opportunities to help to finance rural housing in particular and housing in general. Again, that meeting was positive, and I am happy to feed back on the round-table event.

Our demand-led rural and islands housing fund, which has been described as a game changer, has now become a recognised feature of the affordable housing supply programme, and is backed by up to £30 million funding in this session of Parliament.

I have tried to meet as many local authorities as possible since I have been in this role—I have probably met more than two thirds of them. Again, this issue is raised when I talk to councils.

On 1 September, I wrote to the minister suggesting that, in order to meet the laudable aim of delivering 11,000 affordable homes by 2032, he should work closely with farmers and landowners, and that he should use permitted development of up to five new homes per farm unit. I am not talking about simply converting existing homes but about building new homes. Given that farms cover 71 per cent of the land mass of Scotland, and that the average farm has equity of around £1 million, is that not a sleeping giant desperate to be woken up by the Scottish Government? Why is the Government not including that proposal in the plan?

That is something that I think would be considered. In terms of engaging stakeholders, we met NFU Scotland and the Crofting Commission, and I also met Scottish Land & Estates to talk about those issues. Again, those things are mentioned in the plan and we will try to develop them. I agree with Fergus Ewing that there is a great opportunity to work with landowners and farmers in that regard. The discussions with them will continue as the plan moves forward.

I return to the rural and islands housing fund. I mentioned that there will be up to £30 million funding for that in this session of Parliament. The fund continues to play an important role in helping community organisations and others to deliver affordable homes, while complementing delivery through our mainstream programme by councils and housing associations in rural and island areas.

We have a strong track record, having delivered more than 10,000 affordable homes since 2016. However, we recognise that we need to do more, and the rural and islands housing plan sets out our next steps. We know that providing affordable housing in rural and island areas can be complex and that a one-size-fits-all approach does not work. Many of the actions that are included in the action plan seek to address key challenges and put in place the systems and support for the delivery of the right homes in the right places so that our rural and island communities can thrive.

I will highlight some of the key actions that are included in the plan. Issues relating to key workers have been raised by a number of members in correspondence with me. The plan recognises the importance of employers being able to attract and retain key workers in rural and island areas, not only to support service delivery in communities but to support economic growth and prosperity. I have met a number of employers to talk about some of the schemes that have come forward, and we continue to work in close partnership with them in that regard.

The plan includes an action to allocate up to £25 million from our affordable homes budget over the next five years to fund the purchase or long leasing of properties, including empty houses, so that they can be turned into homes for key workers and others who need affordable housing.

There are 67,000 unoccupied properties in Scotland right now, and we all know from our constituencies that they are unsightly and a blight on Scotland. Does the minister agree that compulsory sale orders should be introduced to ensure that such properties are given to people who need a home?

Rachael Hamilton makes a good point. A report by the Scottish Empty Homes Partnership, which was sent to the Scottish Government, touched on that issue, and it is being considered. The Empty Homes Partnership and the Government are working on the recommendations that have been made not just in rural areas but right across Scotland. It would be good to come back to Rachael Hamilton on that key issue, and I am happy to discuss it with her after the debate.

That issue is really important in relation to key workers. We are seeing economic development opportunities, but we cannot expand or maximise such opportunities without housing. When I visited Nigg and Invergordon, I heard about the number of houses that will be required to accommodate workers there. What we need to do is incredibly important. The plan recognises that employers, including those in the public sector, have a role to play in that regard, including through the better use of resources, properties and land that they own in order to meet our shared interest of supporting the provision of homes for key workers.

Will the minister take an intervention?

I am conscious of the time, but I will take one more intervention.

I thank the minister for taking the intervention. Given that 17 per cent of Scotland’s population live in rural areas, where we are seeing depopulation, should people in rural areas be satisfied with getting only 10 per cent of the 110,000 homes that have been promised for Scotland?

We have talked about 10 per cent being the minimum. That is key. I meet local authorities and economic development partners in that regard. We need to identify the right houses in the right places. We would like to deliver a minimum of 10 per cent, but if we can achieve more than that, that is fantastic. That will require closer working, as is mentioned in the action plan. The target that has been set is realistic. We have proved that through our delivery. However, if we were to deliver more than that, that would be great.

I talked about the land for housing. We know that the availability of suitable land in the right locations is vital to enable the delivery of more homes where they are required. Building on the range of activities that are already under way, the plan commits to working with public sector agencies in considering the land and building assets that they hold that might be appropriate for housing. About two or three months ago, we held a round-table meeting in Perth with about 10 stakeholders, and we discussed that key issue.

Our national planning framework 4 sets out policies that provide strong support for sustainable rural development. That includes a new national planning policy for rural homes, which will encourage, promote and facilitate the delivery of more high-quality, affordable and sustainable rural homes. The plan recognises that, alongside delivery of new homes for our rural and island communities, it is important that local authorities have the tools available to allow them to make the best use of existing housing.

I want to touch on second homes and short-term lets. I know that such issues are emotive and that we have debated them previously. Second homes and short-term lets can bring benefits to those who own and use them, as well as to the tourism businesses and local economies that they support. However, where those kinds of ownership patterns impact on the availability of homes to meet local needs and on community sustainability, we are considering what additional powers could support local areas to take action. That issue was mentioned to me on numerous occasions during the tour that I undertook in the summer. We intend to introduce legislation that will give local authorities the power to charge up to a 100 per cent premium on second homes.

There is now a new legal requirement for short-term lets to be licensed, which provides assurance to guests that short-term lets meet safety standards and that the people who provide them are suitable. That has brought the regulation of short-term lets in line with the regulation of other accommodation sectors such as hotels, caravan parks and houses in multiple occupation. The regulations also provide local areas with the option to apply additional conditions to address local issues when short-term lets cause problems for neighbours and residents.

Touching on the point that Rachael Hamilton made, I want to say a wee bit more on empty homes. We know that every empty home that is brought back into use can make a big difference to the sustainability of communities, and we are committed to working with the Scottish Empty Homes Partnership, local authorities and owners to bring more empty homes in rural and island areas back into use. The Scottish Empty Homes Partnership and local authorities’ dedicated empty homes officers continue to deliver great results, with more than 9,000 homes returned to use.

The plan recognises that community-led housing plays an incredibly important role in our broad approach to deliver more affordable homes in our rural and island communities. The enabling role of organisations such as South of Scotland Community Housing and the Communities Housing Trust—both of which I have met, among others—continues to be vital in supporting communities to bring forward housing projects. The plan includes a joint funding package with the Nationwide Foundation of almost £1 million over three years to the Communities Housing Trust and South of Scotland Community Housing to enable them to continue to support rural and island communities, to grow their knowledge and capacity and to deliver more affordable homes to meet the needs of communities.

The action plan touches on what we need to do, but it is all about collaboration and partnership. The delivery of the ambitions in the action plan cannot be achieved solely by the Scottish Government; it will require commitment, collaboration and dedication by a wide range of organisations, including Government agencies, local authorities and others. Private sector organisations also have a vital role to play, as employers and businesses with land and assets, and I have met Homes for Scotland on that issue. I know that some businesses are already engaging in providing quality homes for their employees.

Please begin to conclude, minister.

I believe that the delivery of the commitments in the action plan will further enhance our commitment to addressing the key challenges and will enable the delivery of more homes across our rural and island communities, supporting them to thrive. I look forward to seeing progress on that.

I move,

That the Parliament welcomes the publication of the Rural and Islands Housing Action Plan that will support the Scottish Government’s ambition to deliver 110,000 affordable homes, of which 10% will be in rural and island areas and help attract people to, and retain people in, these communities; recognises that the action plan complements a range of other vital work being taken forward to support sustainable economic growth and to deliver for rural and island communities; considers that it marks an important step in tackling challenges to deliver and retain more homes of all tenures and puts in place the systems and support for the delivery of the right homes in the right place, and believes that achieving delivery of ambitions will require the Scottish Government to work collaboratively with a wide range of partners, including local authorities, registered social landlords, community organisations and Scottish Government agencies, to deliver committed and coordinated action that will support thriving rural and island communities.

I call Rachael Hamilton to speak to and move amendment S6M-11027.1.

14:36  

Less than one week on from the revelation that our former First Minister could spare just one slot in her diary for the whole of rural Scotland over the past two years, I start by saying that I am pleased to see rural affairs back on the agenda, firmly and squarely, here in Holyrood today. Scotland’s towns, villages, rural communities and islands will be paying attention and listening to what the Parliament can do to tackle the challenges that they face.

I know that there are few greater challenges for them than stemming the tide of rural depopulation, which poses a threat to the sustainability of so many of our communities. Rural depopulation has been driven by years of neglect and years of not using devolved powers in this place, not just by the former First Minister but by a Scottish National Party-Green coalition that has shown time and again that it does not understand the needs of rural communities.

The minister is right that housing is an important piece of the puzzle when it comes to solving that issue. Setting out a plan to support the delivery of affordable homes and homes for key workers, and to address supply chain issues in building homes in rural areas, is a genuinely positive step. A one-size-fits-all approach does not always work and is not always progress but, too often, the Government has taken a copy-and-paste approach by using urban solutions to fix rural problems.

The rural and islands housing action plan is a welcome departure from that approach, but although it is a start—and is no doubt hard won, in the face of a Government that has shown little interest in rural communities or solving the issues around rural depopulation—the facts and figures that underpin the plan show that the Government remains as out of touch as ever with rural Scotland.

Before I go into the details of that, it is important to set the debate in the right context. We must not forget that the plan is being launched on the back of a £170 million cut in Scotland’s housing budget. It is also being launched against a backdrop of damaging rent controls that have done nothing other than drive up rents, drive away investment and place a greater burden on people who want to rent a home than is the case anywhere else in the UK. The private rented sector will be key to resolving housing shortages, but the Government’s rental measures have undoubtedly had a negative effect on the market. Increasing input costs have forced landlords to put up prices between tenancies, while the disinvestment driven by the policy has reduced stock and increased competition.

I have a couple of points. On the budget, at the start of this parliamentary session, the budget was £3.5 billion, and that has not been cut.

I recognise the role of the private rented sector. I have met John Blackwood on a number of occasions to talk about that and how we work with the sector in moving forward. I agree that that is an important area.

On rent controls, the longer-term issue around that will be addressed in the forthcoming housing bill. We are working closely with the private rented sector, not only in rural areas but in other parts of Scotland. I recognise the importance of the point that the member raises.

I am looking at the Scottish Government figures for 2022, in which there is a cash-terms cut in the housing budget. That has done nothing to help the rural allocation, as highlighted by my colleague Finlay Carson.

Will the member give way on that point?

I will make some progress and perhaps take an intervention later.

Against what the minister has just said about the Government working with the private sector, it is key that we take forward the actions that we take away from rural organisations such as the Scottish Association of Landlords and Scottish Land & Estates, which have provided a briefing for the debate. It is important that we work with them and that we listen to the voices of the people who are integral to providing houses in the private rented sector. They have argued strongly that arbitrary rent freezes and eviction bans harm landlords and tenants.

That is important because, alongside making it harder to solve Scotland’s housing crisis, there is a huge impact from the red tape and bureaucracy. We have seen a £12 million underspend in rural and islands housing funds. We have also seen repeated failures to meet targets for building affordable homes, with approval rates at their lowest level in 10 years. We have seen a 25 per cent reduction in the delivery of social housing and a staggering 48,000 empty homes across the country, which the minister addressed in his response to my intervention. In my constituency in the Borders, 1,000 properties have been empty for over a year. That does not go unnoticed by my constituents. They cannot understand why those properties cannot be brought back for integral homes for them and their families in the next generation.

I am not sure how the member expects the Scottish Government to be able to deliver more homes with a £500 million cut in its capital budget, which is 9.7 per cent in real terms this year, with 7 per cent to 2028. If the Scottish Government is doing so badly at delivering affordable homes, why are we delivering 13.9 homes per 10,000 population when the UK Tory Government is managing only two thirds of that?

What a shame it is that Kenny Gibson has to devolve his responsibilities to another Government. Scotland has two Governments. This Parliament has huge devolved responsibilities and the Scottish Government has a record block grant. Unfortunately, all that the SNP has is criticism. People watching the debate will look at that and think that the party does not understand how to deal with the issues in rural Scotland, particularly around the lack of housing. It is such a shame.

It is important that we consider the housing action plan in that context. The reality of the plan is that, regardless of the context, rural areas are being short changed. As my colleague Finlay Carson said, rural Scotland accounts for 17 per cent of Scotland’s population but it has been promised only 10 per cent of the affordable housing development budget. That falls hopelessly short of its fair share.

Will the member take an intervention on that?

If the minister can tell people who live in rural communities why they are being short changed, I will.

I come back to the point that I made to Mr Carson. The 10 per cent is a minimum target. It is not around a budget. We continue to speak to local authorities on that. The 10 per cent is a minimum—it is not a budgetary spend—and, if we can get more than that and there are opportunities to deliver that within the wider programme, we will deliver more than the 10 per cent. If we have opportunities to work with local authorities, development groups and local communities on it, we will deliver more. It is not a budget impact; it is a 10 per cent target.

I am delighted to hear that the minister wants to be more ambitious, but why are we not transparent and clear about what those ambitions are, rather than misleading people and short changing rural communities?

The result for rural Scotland of the deficit that we are talking about is that it is embedding inequality and widening the gap between the SNP’s aspirations for delivering for the central belt and what it is failing to deliver for small towns, villages, rural communities and islands.

How many more ways is rural Scotland being let down by this coalition of SNP and Green members, on access to healthcare, road upgrades, broadband connectivity and ferries to name but a few? Housing is key to tackling the problems that rural Scotland is facing, but as I said, it is only one piece of the puzzle. If we cannot even tackle that with a fair allocation of resources—although we have hope for that because of what the minister has just articulated—what hope is there for tackling the rest of the challenges that people face in rural communities? We cannot keep treating rural Scotland as an afterthought in policy making or its people as second class citizens. That is why we will be bringing forward the Scottish Conservatives’ plan to bring rural Scotland to the heart of our decision making.

We will be pragmatic in our approach to housing by encouraging investment rather than stymieing its flow. We will cut red tape and bureaucracy to speed up housing delivery, and we will ensure that disincentivising legislation is assigned to the circular file. We will announce plans to overhaul the planning process to make it easier to build new homes in the right places. We will do a lot more, but first and foremost, we will ensure that at least 17 per cent of the housing budget and the building of affordable homes will be delivered in rural areas.

I move amendment S6M-11027.1, to leave out from “of which” to “marks”; and insert:

“but regrets that only 10% of these homes will be delivered in rural and island areas to help attract people to, and retain people in, these communities, which comprise 17% of Scotland’s population; recognises that depopulation has been a longstanding problem for Scotland’s rural and island communities, due to a consistent lack of government action; notes that the current rural development programmes, despite being extended, have not been fully utilised; recognises that the plan must deliver on its objectives and promote rural and island areas as good places to live and work; acknowledges that the plan is”.

14:46  

Before I begin, I draw members’ attention to my entry in the register of members’ interests, which shows that I ceased to be a landlord this summer.

Today’s debate is as much about housing as it is about the future prosperity and existence of rural communities. Although the debate is welcome, the fact that it has taken the SNP Government 16 years to produce a rural housing action plan speaks for itself. People in rural communities have waited for far too long for workable solutions to the Government’s housing crisis, and yet the Government’s motion offers little that is new. We cannot support a motion that does not face up to reality or an action plan that is short on action. It is a missed opportunity.

It is no overstatement to say that housing is a lifeline to rural communities. The shortage of rural, remote and island housing is having a devastating impact on local economies. Just like the ferries fiascos and creaking transport infrastructure, the housing shortage is both a symptom and a cause of depopulation. It is driving people away from their local areas, their families, their support networks and the jobs that they want to do.

I appreciate what the minister had to say in his opening speech, but I want to ask him whether the Government will admit that, as the Scottish Empty Homes Partnership has put it, we have a rural housing emergency. I ask that because there seems to be little urgency to address rural Scotland’s needs or the package of policies and funding that is fundamentally needed to stem the decline.

The rural housing strategy is built on a crumbling foundation. It is tacked to housing targets that the Government’s own risk register warns might be at a high risk of being missed altogether.

I have a couple of things to pick up on because they are key to give a bit of context. Kenny Gibson touched on the fact that we deliver about 40 per cent more affordable homes per 10,000 population than are delivered in England, but we also deliver 70 per cent more than are delivered in Labour-controlled Wales. I have already mentioned that the Scottish Empty Homes Partnership produced a report, and we are working closely with it. I wonder whether Labour would support that. Our budget is £3.5 billion. If I could increase that budget—if we had the authority from the UK Government to increase that borrowing to £10 billion—we could move a lot quicker. Would Labour support us if we went to the UK Government and asked for additional borrowing? Alternatively, if Labour won the next election, would it increase the borrowing powers of the Scottish Government to allow us to build more homes?

I would absolutely support more capital spending on housing, and I will come on to talk about some of the policies that we have been suggesting in the chamber for years that the SNP Government is dragging its heels on.

The reason why I talked about the numbers and about the Government’s risk register’s warning that there is a high risk that those targets might be missed is because the Government’s house-building programme is now defined by decline, with starts and approvals in 2023 being at their lowest point since 2015.

We need a renewed commitment that those homes will be delivered. Rural communities need to know that the Government is focused on securing homes for them. Labour’s amendment calls for the Government to cement its ambition and to set an interim target of 5,500 rural homes to be delivered by 2026. It is just not credible to say that it will do it by 2032—when it might be long out of office. That is just kicking the can down the road.

Regardless, the Government proposes to undercut rural communities, which could in itself accelerate the depopulation that the action plan is meant to tackle. As Rachael Hamilton and Finlay Carson pointed out, rural, remote and island communities comprise 17 per cent of Scotland’s population. In 2021-22, a sixth—that is, 16 per cent—of the affordable homes that the Government supported were built in rural communities. Given that the Government said that it has delivered 10,000 rural homes since 2016, why will it take almost a decade to deliver almost the same number? To judge from the minister’s contribution, it seems that the 10 per cent target is just a figure plucked out of the air so that the Government can say, “We hit our target” when, in fact, it has performed better than that in 2021-22 and in the past seven years. It seems that it is just an easy target to hit—paying lip service to our rural communities rather than delivering the real ambition that they deserve and need.

More can be done to raise funds directly for rural housing and give those communities a chance to grow and succeed. I recently met Salmon Scotland, not to talk about salmon but to hear about how badly wrong the basics of the housing market are. The lack of affordable housing is stopping the Highlands and Islands from becoming a northern economic powerhouse. Workers are unable to live near their work and their families, which causes depopulation.

If ever we needed an example of how bad something is for business, jobs, growth and the economy, it is the housing crisis that we are experiencing in rural Scotland.

I, too, met Salmon Scotland, and discussions are on-going about the proposals that it made, which Mark Griffin knows about. I think that it met us on the same day. I remember having that discussion.

Obviously, I have seen the amendment. I fully recognise the importance of housing and the role that it plays in economic development. I mentioned the visit to Nigg and Invergordon, where I met employers to talk about what we can do to work more closely in that regard. Of course there is that contact, and we will continue it.

We are encouraging local authorities to apply to the key workers fund. At the moment, there are some discussions, but no proposals have come forward. Again, we are working with the Convention of Scottish Local Authorities on that and we are asking it to make sure that proposals come forward for that fund.

Mark Griffin, I can give you the time back.

It is good to hear that the Government is doing some thinking. I submitted written questions about what the Government was doing with the estimated £20 million in additional funding that Crown Estate Scotland expects to raise from increased fees from finfish tenants. It seems to have no plans. That is an example of a pot of funding that could aid rural house building.

Our amendment also calls for a council tax surcharge escalator on long-term empty homes. We estimate that giving councils the powers to increase council tax for each year that a home is empty could raise up to £30 million. Better still, it could be a catalyst to help owners of empty homes—of which there are around 28,000—to bring those properties back to the market so that they are lived in as homes and are valued again. As the plan says, it is better to use the stock that we have. I endorse the points that have been made by Conservative members about the need to introduce compulsory sale—and compulsory rental—orders to get those empty homes back into use.

The Government’s recent consultation backed increasing the council tax on empty homes, and a stepped approach. Again, that is another revenue stream that the Government could have put to good use, but it seems to be dragging its heels on that, whereas urgency is key.

Although we welcome the Government’s backing for our call to give councils the powers to apply a surcharge on second homes, had those powers been introduced when the First Minister came out in support of those proposals, councils could have raised £35 million this financial year.

I return to the minister’s initial intervention. A package that abolished small business rate relief for short-term lets and included powers for surcharges on empty homes and second homes could have raised £85 million per year. That is a substantial sum of money that could have gone towards addressing the housing market failure that affects rural areas.

The depopulation of rural areas should not be seen as the status quo, and economic prosperity should be at the front and centre of ensuring that rural communities can survive and thrive.

Today has been a missed opportunity—and worse—for us. The long-awaited “Rural & Islands Housing Action Plan” is desperately short on action.

I move amendment S6M-11027.2, to leave out from “welcomes” to end and insert:

“notes the publication of the Rural and Islands Housing Action Plan, which aims to support the Scottish Government’s ambition to deliver 110,000 affordable homes, of which 10% will be in rural and island areas; believes that an interim target should be set for 5,500 houses to be completed in rural areas by 2026; is concerned that, without sufficient economic support from the Scottish Government, the strategy will not provide the infrastructure needed to allow local authorities, registered social landlords, community organisations and Scottish Government agencies to successfully attract people to, and retain people in, these communities; considers that the depopulation of rural areas should not be seen as the status quo, and notes the Scottish Labour Party’s commitment to put economic prosperity at the front and centre of ensuring that Gaelic-speaking communities can survive and thrive; notes that this rural housing crisis is, in some part, due to local people being priced out of the area by the acquisition of second homes; calls on the Scottish Government to take further action to ensure that houses in rural areas are affordable and good quality, and that existing homes are a vital part of the housing stock; agrees that the Scottish Government should give local authorities powers to introduce an escalating council tax surcharge on empty homes in the next Budget, to be launched in 2024-25, as was supported by the responses to the Scottish Government’s recent consultation on Council Tax for Second and Empty Homes, and calls on the Scottish Government to take decisive action to tackle fuel poverty and damp, poor quality housing in rural areas, to improve transport infrastructure, and to support the economic lifeblood of small rural communities by delivering skilled workforces, supporting small businesses and ensuring a just transition that delivers community energy benefits.”

14:55  

It gives me great pleasure to speak for the Liberal Democrats in the debate on this important subject, and I am grateful to the Government for making time for it.

Between March 2023 and March 2022, construction began on just more than 6,900 affordable homes, which represents a decrease of 15 per cent on the previous year. It is the lowest annual figure since 2015, which was before I was in Parliament. Those disappointing figures come amid what is undeniably a housing crisis in Scotland right now. It is a crisis that is well documented—we have heard about it already today. It is deeply felt across this country but no more so than in our remote, rural and island communities. I see the impact of housing issues every day in my Edinburgh Western constituency. In fact, the bulk of my casework relates to that. That is why, next week, I will convene a summit in the Parliament on the housing issues that affect people who live in the capital. However, the learning points from that will also have ramifications for remote and rural communities.

I will provide a couple of points to give us a bit of context. First, completions were at a 20-year high just recently. Secondly, not just in rural areas but in Edinburgh and other parts of the country, the biggest barriers to house building at the moment are the cost of borrowing and the cost of construction inflation. I speak to housing associations, developers and Homes for Scotland, and I hear that the biggest barriers that we face are the cost of borrowing, due to where interest rates are, and the cost of construction inflation. We cannot do anything about that, because we do not have the powers here to do so.

I hope that I can get some of that time back.

The minister is not wrong. The cost of borrowing has increased, but there is still a competitive development market out there. Indeed, in my constituency, many applications come in all the time. The issue is about developers choosing to put their investment in places other than where the need is greatest. We need to reset and recalibrate that urgently.

As I have said, there are serious issues right now across the country. We have accumulated a shortfall of 114,000 homes since 2008, which was before the credit crunch, the cost of living emergency and the increase in interest rates to which the minister alludes. Nowhere can that shortage be felt more acutely than in our rural and island communities. In those areas, it is leading to extreme pressures on affordability, which the figures bear out. In 2007, more than 8,500 new homes were delivered. By 2022, the annual number had fallen to 6,500, which is a fall of 24 per cent. Some local authorities have it even worse than others—it is a postcode lottery. There has been a 39 per cent decline in Shetland, and the shortfall of new housing in the Borders has reached a staggering 65 per cent. Our rural and island communities are further suffering from a lack of new, high-quality, energy-efficient homes, which is impacting on their long-term sustainability and marketability.

Although I am grateful that the Government is finally giving the issue the attention that it so desperately needs with the publication of the “Rural & Islands Housing Action Plan”, which we are discussing today, I am concerned by a lack of focus on the quality of new housing. Liberal Democrats would like more attention to be given to fuel poverty, which is an issue that has an outsized impact on rural and island communities but gets only the very briefest of mentions in relation to the existing housing stock.

Fuel poverty is a major issue. It exacerbates poverty and stretches tight incomes. Apart from the lack of rural and island housing, which threatens depopulation and the viability of those communities, fuel poverty is perhaps the most persistent and pernicious issue when it comes to discussing rural and island housing.

The latest local authority data shows that our rural and island communities consistently top the list for fuel poverty, sitting way above the national average. In the Deputy Presiding Officer’s constituency of Orkney, and in Shetland, fuel poverty is at 31 per cent. It is at 32 per cent in Argyll and Bute and 33 per cent in Highland and a whopping 40 per cent of homes in the Western Isles are in fuel poverty.

Those figures are not even up to date: they are from 2019. The Scottish Government does not actually know how many people in our rural and island areas are currently fuel poor, but, if national modelling released earlier this year is anything to go by, and coupled with the cost of living emergency and the energy crisis, the figures can only be far higher.

It should go without saying in the 21st century that heating your home should not cause or exacerbate poverty. Scottish Liberal Democrats therefore want to see a programme of Scottish Government support for emergency home insulation that would reduce energy costs by improving efficiency and would have a positive impact on our climate targets and our objectives for the climate emergency in the process.

Will the member accept an intervention?

If I have time.

I can give you the time back.

The member makes a really important point. Each local authority, including the authorities that the member mentions, must produce a local heat and energy efficiency strategy by the end of the year. I am working closely with Patrick Harvie and with local authorities on that particular issue. I am cognisant of that incredibly important issue and I give the member that reassurance. That issue has not been forgotten in the action plan, which goes broader than just rural housing. I reassure the member.

Mr Cole-Hamilton, I can give you back the time for both interventions.

I am grateful for the intervention and take the minister’s remarks in good faith. That said, his predecessors have not measured up to the task. This Government has been in charge for 16 years and in all that time we have not seen the mitigation measures that we need to address remote and rural fuel poverty. It is high time that we took that seriously. I am glad to hear the minister’s rhetoric, but that must be met with action.

We also want to see a new and substantial Scottish housing standard that would be a proper Scottish equivalent to the Passivhaus standard for environmentally friendly buildings made using climate-friendly materials and design. This Government must listen to the concerns that have been raised and must ensure that the standard does not impede efforts to build the number of houses that we desperately need. My colleague Willie Rennie has met with the Donaldson Group in Fife to discuss its work on a standard that uses lower-carbon materials and leads to lower running costs than for houses made to the original Passivhaus standard. I encourage the Government to look in detail at that work. It goes without saying that, as we tackle this crisis, it is absolutely critical that we do so in a sustainable and environmentally coherent way, by building homes that will remain affordable and are designed and built to last.

We must also consistently highlight the negative impact of planning delays on housing delivery, because delays to planning often result in increased costs and fewer housing sites being opened. Last year, the average processing time for major housing applications was more than 42 weeks, while the statutory target is just 16. That is nowhere near good enough and it is getting in the way. If the Government is to take meaningful action on rural and island development, we must improve that now.

We move to the open debate.

15:03  

In the interest of transparency, I draw members’ attention to my declaration in the register of members’ interests regarding my ownership of privately rented properties.

I am delighted to speak in this debate on the importance of housing supply to rural and island communities, not least because housing supply is critical to realising our economic ambitions. We cannot grow the economy without people and we cannot grow the population—or our tax base—without housing. It is necessary for Scotland’s rural economy to meet its potential if we are to deliver the potential of Scotland’s economy as a whole, whether that is in our tourism sector, in renewable energy, food and drink, aquaculture, fishing or our rapidly growing and potentially world-leading space sector. For all those reasons, the supply of housing stock is absolutely critical, not only because of its social impact but because of its economic impact. That is particularly true in rural and island communities, but it is true across the whole country.

Does Ivan McKee agree that any proposals have to be the right proposals for the right location?

That is absolutely true. Scotland is wide and varied and each location will have a different emphasis and focus on what is required to tackle the problem. I welcome the rural and island housing action plan, but much of what it proposes applies right across the country.

There is a focus on affordable housing, but I believe that there needs to be a broader focus right across all tenures. The only sustainable way to keep housing affordable is to have significant build across all tenures and not just in what is traditionally defined as affordable housing. If the supply is there to meet or exceed the demand it helps to keep all prices affordable.

As I said, the economy needs people, and Scotland has had success in attracting talent from the rest of the UK. We are an attractive location to come to live and work in. The Scottish Government has made it clear that we want more inward migration into Scotland, and has argued for powers to do that. However, we need to face up to the reality that, at the moment, even if we had those powers, we would struggle to house everyone who might want to come and live and work here. I ask the Government to be ambitious, to get ahead of the curve and to ensure that supply is ahead of not just current demand but potential future demand, which is absolutely critical to our population and economy ambitions.

It is good to hear that the minister is having discussions with SFE and investors on expanding investment, particularly into build-to-rent housing. I would be interested to know how much of that potential lies in rural areas. I welcome the focus in the action plan on identifying land for housing in the context of NPF4, the work on land reform legislation to increase transparency around ownership, and the work that is happening to look at the public sector estate and understand how much of that can be used to address local housing needs.

Local housing assessments are important to enable us to improve understanding of housing requirements, but I say again that we need to get ahead of the curve. Population trends can be driven by policy, and it is not just a question of responding to them, whether they relate to Scotland’s population as a whole, or the drift from west to east and from rural to urban.

The focus on local economies is hugely important, and it is good to see effective engagement with local employers. However, working with potential inward investors to align housing supply with skills supply in those key rural and island sectors is hugely important. I know that employers are very much up for that conversation. The plan identifies the critical work to be done to address skills, capacity and supply chains—particularly for small and medium-sized builders in the rural economy.

The plan mentions modern methods of construction, and I am delighted to see the close working that is going on with what was Construction Scotland Innovation Centre, and is now Built Environment—Smarter Transformation or BE-ST. I urge the minister to make sure that we have a thorough look at the potential for off-site factory-build units that could be dropped into place to help to tackle labour shortages in rural areas, at least initially.

The focus on bringing more empty homes into use or, indeed, second homes into residential use, is hugely welcome. It is good to see the 100 per cent premium on second home council tax, but my question for the minister is: why have a cap on that at all? Why not just leave it to local authorities to decide how high that premium should be, to suit local circumstances? .

I am glad to see the important work on compulsory purchase orders, alongside work on compulsory sales orders, which have an urban as well as a rural applicability. That will make the process clearer, fairer and faster, as defined in the action plan.

Planning times have already been mentioned, as has the fact that, for major projects, the time lag is 42 to 43 weeks, versus a 16-week statutory timeframe. Even for smaller projects, it can be a 14-week lag versus a 12-week statutory timeframe. That absolutely needs to be addressed. I know that the minister understands that, but I would be interested to know what work is being done to address those excessive times.

Will the member take an intervention?

Mr McKee is just winding up.

I am indeed.

My colleague Fergus Ewing raised a point about permitted development rights to enable farmers and others to build small numbers of houses on land where that is required, and that absolutely needs to be looked at.

I would like to ask the minister whether work on other tax levers—such as land value tax and capturing land value uplift—will be considered in the land reform bill. Progressively broadening out that tax base and ensuring that communities benefit from the uplift in land value could increase the scope for delivering more homes as a consequence.

15:10  

I refer members to my entry in the register of members’ interests, which states that I am the owner of a croft, a partner in a farming partnership that owns a rental property, and a member of NFU Scotland and Scottish Land & Estates.

Today’s debate, which I welcome, is on an extremely important subject for my Highlands and Islands region and for rural and island Scotland more generally. Housing and the lack of its availability is an issue that we can all agree impacts on those whom we represent, our local economies and the delivery of local public services, so I give a cautious welcome to the Scottish Government’s “Rural & Islands Housing Action Plan”. I do so because I question, as does the amendment in the name of my colleague Rachael Hamilton, how ambitious it really is.

The action plan makes promises on delivering new affordable homes but, as Finlay Carson rightly highlighted, only 10 per cent will be built in the rural and island areas where 17 per cent of Scotland’s population actually live. One might ask, as do many of my constituents, who regularly raise housing concerns with me, why the new plan, coming as it does after 16 years of SNP Government, will be any more successful than the previous efforts. Is it just that SNP ministers are finally recognising the seriousness of the situation and the failure of those previous efforts to rectify it?

When the Scottish Government announced that £30 million would be made available for the rural and islands housing funds that were originally planned to run from 2016-17 to 2021, it suggested that the funds would help it to hit its 50,000 affordable homes target. Well, it missed that target.

When questioned by my colleague Miles Briggs, the Scottish Government claimed that the rural and islands housing funds play

“an important role in offering support to community organisations and others to deliver affordable homes”.—[Written Answers, 31 January 2023; S6W-14348.]

Yet, because of poor uptake, the application period for both funds had to be extended and they were still being allocated in 2022-23. Despite that extension, between 2016-17 and 2022-23, the Scottish Government had spent less than £18 million of that combined £30 million funding pot.

Surely, with what I hope the minister will accept are serious pressures on housing availability in our rural and island areas, the lack of uptake of those funds clearly demonstrates that there were issues with how they were delivered. In 2018-19, two years into the scheme, they funded only one property in the whole of Scotland. In 2020-21, the last year that the schemes were originally intended to run, they funded only 20 properties. That is despite millions of pounds of available funding still sitting in Scottish Government coffers in Edinburgh, when it should have been used to deliver much-needed homes in rural and island communities.

Will the member take an intervention?

I will be happy to take an intervention from the minister to answer these questions. What went wrong with the rural and islands housing funds? What lessons has the Scottish Government learned to ensure that those mistakes, whether they were to do with eligibility issues or a lack of awareness of the schemes, will not be made again with any new schemes? Is the £45 million that the Scottish Government has claimed will be allocated to the new remote rural and island housing fund all new funding, or will it include reallocation of unspent funds from the existing rural and islands housing funds? Finally, why should we have any confidence that any new schemes will deliver the homes that are needed, when the old one clearly did not?

I am happy to pick up on the questions that Mr Halcro Johnston asked, and I will write to him on the specific points that he raised.

I cannot comment on the past. The funding was always there. When I was going around the Highlands, one of the key things that was raised with me was infrastructure, which is incredibly important. We need to look at how we can use infrastructure to bring housing forward. I was also up in Shetland, for example, where we provided £30 million of infrastructure funding that will deliver 300 homes, which will make a real difference. It is about getting down to that level of detail.

Looking at the context, the issue was not about funding; it was about working with local authorities. One of the key things for me is how we link broader economic development opportunities to housing. In discussions with employers and local authorities, that is a key point that comes across.

I will be happy to address Mr Halcro Johnston’s more specific points if he writes to me on those matters.

I am grateful for that. I think that the minister said that he could not comment on matters from the past, but if proposals are to work in the future, we must surely listen, learn, find out what went wrong in the past and comment on that.

The SNP has had 16 years to get things right on this issue, and it has failed. On its website, the party still boasts that the funding will help

“young people and families to stay or make their lives in rural, remote and island communities.”

However, in a survey conducted by Ipsos for Highlands and Islands Enterprise, nearly half of the young people from the area who were questioned said that they planned to move away in the next five years, with 76 per cent saying that there were not enough affordable homes to rent or buy.

I would genuinely love to believe that finally, and belatedly, although many years too late, the SNP has recognised the need for action, but I cannot. This still does not feel like a revolutionary new approach to delivering what it has failed to deliver for so long. It feels like more of the same, but a revolution is what is needed. That is why the Scottish Conservatives would create a Scottish housing delivery agency to work with local authorities and developers to deliver and build new houses, and why we would allow permitted development for rural homes, giving more freedom to farms and other businesses to play their part in addressing rural and island housing shortages, as well as helping to accommodate workers. I am glad that it sounds as though we have some support from SNP back benchers for that.

As Mark Griffin highlighted, employers such as Salmon Scotland have said that the lack of affordable housing is preventing my Highlands and Islands region from becoming a powerhouse. Scottish Land & Estates has said that the SNP’s “Rural & Islands Housing Action Plan” is not ambitious or radical enough to deliver the step change that is needed to meet rural housing needs. Housing charity Shelter has said that the Government’s approach does not indicate that it recognises the severity of the situation.

Getting housing right is vital for my region, but not enough homes are being built. Such a lack of housing, in both the public and private sectors, seriously impacts on the delivery of public services, the ability of local businesses to thrive and people’s ability to stay in the communities in which they were brought up. A lack of homes threatens the very future of some of our most fragile communities. Our rural and island communities cannot afford the SNP to get this wrong again.

Will the member give way?

The member is winding up—in fact, he has wound up.

15:17  

I draw members’ attention to my entry in the register of members’ interests as someone who rents out a property, albeit that it is not in rural or island Scotland.

I welcome the publication of the action plan and the dedicated support that is being provided to tackle the lack of affordable housing in rural and island areas. I have no doubt that my Arran and Cumbrae constituents, and the businesses that operate on those islands, will welcome it, too.

In 2021, 18 affordable, energy-efficient council homes were built on Cumbrae, supported by a Scottish Government grant of £1.32 million. Last year, a mix of 34 general needs amenity bungalows and accessible council houses was built on Arran, backed by a £2.38 million grant. That represents £70,000 per council house, which is three and a half times the grant that is available for council housing in England.

That is in stark contrast to the mere six council houses that were built by the previous Labour-Liberal Democrat Administration across all Scotland over four years. Despite the financial crash, Tory austerity and the pandemic, in the past financial year alone, 1,947 council homes were completed across Scotland, as the minister strives to ensure that everyone has a warm, safe and affordable home.

Despite the Scottish Government’s ambitious targets, it is evident that our rural and island communities have experienced economic hardship, particularly due to economically active people’s difficulty in being able to afford island housing costs. Community-led housing projects such as Arran Development Trust’s Rowarden affordable housing project—the biggest such housing project on Scotland’s islands—are playing a key role in increasing the availability of affordable housing and, in turn, the prospects of islanders. Thanks to a record £1.512 million from the Scottish Government’s rural and islands housing funds—which represents £84,000 for each new home—18 one-bedroom, two-bedroom and three-bedroom homes are now under construction in Lamlash, backed by the provision of 24 further affordable building plots on Arran.

The project is an excellent example of a positive outcome that was created through collaborative working between the public and private sectors and the community. I trust that Arran Development Trust’s and islanders’ bold ambitions and dedication can be learned from to ensure that local communities’ voices are heard in planning processes throughout Scotland.

The continued support that was offered by civil servants throughout the project was greatly appreciated, with the announcement of the project in May being very warmly welcomed. However, it took some three years to secure a grant from the rural and islands housing funds. I urge the minister to explore how such projects can be expedited in future. It can be a long and weary process for organisations such as Arran Development Trust, which mostly consist of volunteers, to deliver projects, which acts as a deterrent to those who lack the dogged determination and patience of the trust’s members.

The First Minister’s visit to Arran on 23 August, when he met Arran Development Trust to discuss the demand for affordable housing, the cost of building on the islands and empowerment for island communities, ensured that islanders know that their lived experiences are valued when housing policy is implemented. The trust appreciated the opportunity to relay its concerns directly to the First Minister, and a number of the points that were raised are reflected in the plan.

Arran’s largest employer, the Auchrannie resort, has been vocal about how a lack of affordable island housing has impacted on its business, with many employees being unable to reside on the island in a home of their own. Auchrannie is an employee-owned business and it should be commended for providing 103 accommodation units to team members, which has removed the need to commute while supporting those who reside on the island. Understandably, however, employees do not see such accommodation as a home, leading to few retaining their employment for long, and its provision means that the true level of homelessness is, regrettably, underestimated. Team accommodation should not be included in figures on people who are housed if we are actually to reflect need.

The programme for government dedicated up to £25 million to identify homes for key workers in rural communities, and that funding is essential to ensure that businesses in rural and island communities remain afloat, particularly after the devastating impact of the pandemic. I welcome the island skills and repopulation pilot, with one of the three projects taking place on Arran and Cumbrae. Through the support for career pathways, retraining and upskilling, local economies on the two islands in my constituency will diversify, increasing capacity and skills across a variety of sectors and further supporting the delivery of more affordable housing.

I look forward to publication of the addressing depopulation action plan this autumn, and I will continue to work with the minister on island communities in order to tackle depopulation. That is essential if we are to ensure that islanders do not have to move to the mainland for housing.

North Ayrshire Council’s community wealth building approach to economic development, which is the first of its kind in Scotland, offers a unique opportunity to contribute to our wellbeing economy as well as the local authority’s five pillars while building affordable homes. By using local procurement, we can deliver more and better jobs, business growth and shorter supply chains, creating greater resilience while also supporting net zero ambitions. In turn, that will boost the local economy and increase opportunities to build more affordable homes.

As many island and rural communities across Arran experience, 26 per cent of the housing stock comprises second or empty homes. That is 735 properties, with 47 per cent in one village. Although those homes are not the primary cause of the island’s lack of affordable housing, they could play a role in the solution. While Arran’s economy is heavily dependent on tourism, it is essential that employers that support community services remain on the island, one key need being permanent and affordable housing. It is essential that we encourage empty and second homes into long-term rent across construction of affordable homes.

Arran Development Trust has long campaigned for councils to be granted more discretion over the rates of council tax on second homes, and it will welcome the secondary legislation to be delivered by the Scottish Government to enable local authorities to apply up to a 100 per cent premium on council tax rates for second homes from April next year. Compulsory sales orders can also play an important role and, as other members across the chamber have done, I urge the minister to take forward such orders.

The “Rural & Islands Housing Action Plan”, if and when it is implemented, should successfully tackle a number of issues that contribute to Arran and Cumbrae’s affordable housing crisis and that of other islands. I welcome the minister’s innovative approach to ensuring that island and rural communities will have increased access to affordable homes, thereby helping to boost local economies, and I welcome the minister’s promise to visit my constituency and meet directly Arran Development Trust and stakeholders who are affected by the prevalence of second and empty homes to ensure that housing policy alleviates the burden on islanders in my constituency.

15:23  

In February, the convention of the south of Scotland held its biannual gathering, bringing together Government ministers and key national and local public bodies with responsibility for growth. The convention usually debates a range of economic issues. This time, the crisis facing the region is such that there was just one item on the agenda—housing. South of Scotland Enterprise has described the lack of affordable housing as one of the biggest economic barriers that the region faces.

A week rarely goes past when I do not speak to a business that is facing labour shortages and struggling to recruit. More and more, however, those businesses are telling me that, even when potential employees are interested in taking up posts, they often cannot do so because there is no suitable affordable housing near the place of work. I have spoken to hospitality businesses that have bought nearby hotels to house their workers because that is the only way that they can attract key staff such as chefs. The lack of housing is holding the local economy back. It is stifling growth and blocking the ambitions of those who want to get on.

We are simply not building enough affordable homes to meet demand and the needs of our rural communities. That is partly because of house building capacity. National house builders have little interest in building what they view as small-scale developments in rural areas, and there has been a decline in the number of local house builders. Those that exist increasingly face skill shortages and cannot get local contractors. Astonishingly, Government cuts recently meant that Skills Development Scotland reduced the apprenticeship contract for Dumfries and Galloway College by 13 per cent. At a time when demand for apprentices is at a peak, we have a waiting list at the college for apprenticeship places in construction.

The Government has also taken its eye off the ball when it comes to making best use of existing housing. Many of the properties in the region are old and have poor energy efficiency. There are eye-watering levels of fuel poverty in the region—in fact, almost a third of households are in fuel poverty, which is higher than the national average. Too many families are being priced out of the area due to the acquisition of second homes that often sit empty for much of the year.

Do Labour and Colin Smyth agree with expanding permitted development rights to ensure that we have enough housing for people who are struggling to live and work in their own areas?

I absolutely believe that we need a far more can-do approach to our planning processes. One move that would help would be to properly resource planning authorities to make decisions as quickly as possible, because delays have increased in recent years.

At a time when there are all these challenges, there has been an increase of more than 90 per cent in the number of open homelessness cases in Dumfries and Galloway compared with 2019-20. The number of children in temporary accommodation in the region has risen by two thirds in a year. The crisis is so bad that housing officers are placing people in caravans and in 50 bed and breakfasts across the region.

However, the number of homes in Dumfries and Galloway given grant funding by the Scottish Government in the year to the end of June as part of the affordable housing supply programme was down by 22 per cent. The number of affordable homes being built in the region is at its lowest since 2016.

It is little wonder that, despite its many admirable aims, the universal response to the Government’s rural housing action plan is that there simply is not enough action. The Scottish Federation of Housing Associations says that the plan

“does not go far enough”.

Scottish Land & Estates says that it is not ambitious or radical enough to deliver the step change that is needed to meet rural housing needs. Homes for Scotland says that the plan does little to identify the challenges that home builders face, and Shelter Scotland says that the plan

“does not indicate that the Government recognises the severity of the situation.”

It also says that

“a housing emergency needs an emergency response.”

We can see the lack of that emergency response and a lack of ambition in the Government’s motion, not least in the target of 10 per cent of the planned affordable homes being in rural and island areas. The Government’s figures show that rural areas make up 17 per cent of Scotland’s population, and the minister seemed to suggest earlier that that 10 per cent figure has just been plucked out of the air.

We need far more action in the Government’s so-called action plan. That means more urgent targets for building new homes in rural areas. As Mark Griffin set out, Labour supports not only a 100 per cent council tax surcharge on second homes but wants local authorities to be given powers to introduce an escalating council tax surcharge on empty homes. That call was supported in the responses to the Scottish Government’s consultation on council tax for second and empty homes. A 100 per cent second home surcharge would raise £1.8 million in Dumfries and Galloway alone, and an empty home escalator would raise a further £1 million. That money could be used to bring more empty properties back into use.

To kick-start house building, we need a more can-do approach in our planning processes and new rural-specific consenting processes. We also need an allocation of resources that properly reflects the additional costs of housing in rural areas, particularly the costs of renovation and energy efficiency measures in older properties.

I recognise that there is good practice in rural housing. I see that for myself in the work of South of Scotland Community Housing in developments such as the old police station in Langholm, which was refurbished to create affordable homes, but we need a lot more. A decent, warm and affordable home is a basic human right that everyone, whoever they are and wherever they live, is entitled to.

However, far too many of my constituents are being denied that right. Until we have the emergency response from Government to our housing crisis that Shelter Scotland has called for, the ambitions of far too many families and the economies of rural Scotland will continue to be held back.

15:30  

“Rural & Islands Housing Action Plan” contains a wide range of examples of how rural and island housing has been created and delivered. The diverse and innovative approach should be welcomed.

I want to focus on the unique rural housing challenges that are experienced in communities across Dumfries and Galloway and the Scottish Borders. We have many opportunities to make a difference in improving rural housing and in encouraging people to move to our rural areas, to address depopulation and to keep our rural communities alive and thriving. Such possibilities include incentivising housing development on brownfield, vacant, abandoned and derelict sites, and exploring alternative types of housing to meet the needs of our areas.

Marie Curie’s briefing ahead of the debate was useful in highlighting that accessible housing and adaptations to housing need to be made more quickly, especially for terminally ill people. I thank Marie Curie for that briefing.

Mark Griffin spoke about population decline, which is a real threat to the sustainability of many of Scotland’s rural communities. The lack of good-quality, affordable rural housing is a key concern. It is crucial that we acknowledge that the Scottish Government alone cannot tackle the critical challenges of depopulation. National and local government and the third, community and private sectors all have a role to play if we are to tackle depopulation collectively.

Colin Smyth mentioned the convention of the south of Scotland having housing on the agenda. When we promoted the establishment of South of Scotland Enterprise, Colin Smyth lodged an amendment to promote the development of affordable housing on the face of the bill. Why did Emma Harper vote against that?

I can give Emma Harper the time back.

Thanks for giving me the time back, Deputy Presiding Officer.

I am coming to that issue.

It is crucial that, when we look at what we need to do for housing, we look at how we will tackle depopulation. Depopulation restricts the local labour supply and affects public service provision, as funding is typically population driven. Those issues were raised at a meeting that I attended with the equalities and depopulation minister in Dumfries towards the end of the summer recess.

I welcome the fact that the Scottish Government recognises the key role that is played by housing in supporting the successful delivery of its aims relating to addressing depopulation and wider population sustainability. However, we need to think innovatively in Dumfries and Galloway and the Scottish Borders in order to attract more people of working age, address depopulation and have good-quality rural housing while ensuring Scotland’s food security.

There is a wealth of evidence and research, including from the Scottish Land Commission, that demonstrates that changes to VAT in construction, which is currently at 5 per cent could help to address rural housing challenges. We know that VAT is reserved to Westminster, but the evidence shows that, if VAT were reformed, we could renew, regenerate and rebuild some vacant, abandoned and derelict sites instead of using prime agricultural land, for instance. If VAT were reduced, we could use and change those sites, which are a blight on our communities.

Will the member take an intervention?

I will take an intervention from the minister.

Briefly, minister.

I will be very quick on that specific point.

The VAT figure has been mentioned in discussions that I have had with construction companies and developers. For some projects, the 5 per cent can be the difference between going ahead and not going ahead. Therefore, I will certainly pick up that issue with Emma Harper after the debate and will raise it with the UK Government.

That is good news. The issue has been raised in the chamber before when we have talked about vacant, abandoned and derelict land and what we can do about it.

We know that Dumfries and Galloway and the Borders have more than their fair share of derelict sites, such as at the former Interfloor factory in Dumfries, the George hotel in Stranraer, the Central hotel in Annan and the Mercury hotel in Moffat, to name just a few. There are also the N Peal and Glenmac buildings in Hawick.

Published research from the Glasgow Centre for Population Health shows that neglected environments can contribute to mental ill health. Dilapidated neighbourhoods and abandoned shops or houses can make people feel unsafe, with run-down environments found to contribute to anxiety and persistent low mood. Therefore, I thank the minister again for being willing to speak to me about the issue of VAT, so that we can encourage brownfield site redevelopment.

An additional point is that the combination of our legacy of out-migration and depopulation and the challenges of Brexit and demographic change means that Scotland urgently needs the powers to increase inward migration. Scotland needs a tailored migration solution to tackle depopulation. That is why the Scottish Government has called for cross-party support for a rural visa pilot scheme. The needs of Scotland are clearly not being met within the current UK Government immigration system, so that is something that we need to keep pursuing.

I am conscious of the time, Presiding Officer, but I would ask the minister to explore an innovative company called Iron and Pine, which is based in Dalbeattie. It is able to make bespoke types of builds for palliative care beds and accommodation for rural employees who might be coming just for training, but they can be used for long-term housing as well.

15:36  

I am delighted to participate in this debate. As an MSP for the Highlands and Islands, I frequently discuss the pressing need for housing solutions with stakeholders across the region.

Producing the plan was a commitment that was made in the Bute house agreement, along with ensuring continued funding through the rural and island housing fund. With precarious populations and a lack of housing for key workers, the plan provides welcome momentum and direction in tackling our rural and island housing crisis, but the plan needs to be given profile and priority if we are to see it through.

How will the plan boost the Community Empowerment (Scotland) Act 2015, encourage asset transfers and enable delivery of our islands plan? There must be policy coherence to support our communities and businesses in working to deliver housing and placemaking.

The plan can and must drive delivery of rural and island housing. The role of Government is to support our communities in delivering the right homes in the right places, in developing more high-quality affordable homes, in making the best use of existing homes and in supporting a range of ownership and tenures.

Along with policy coherence, the success of the plan will be dependent on the detail; that is especially true when it comes to community-led housing. The plan comes on the back of the recently announced Bute house commitment to funding our rural housing enablers so that they, in turn, can build capacity, capability and confidence in communities so that they can take their urgent housing needs into their own hands.

Support for communities is necessary if we are to meet the initial commitment to providing 11,000 affordable rural homes. However, there are two things to consider. First, we need to acknowledge that community-led development happens on the backs of volunteer-led organisations, which I hear is a challenge. We must find a way to support those organisations with secure funding for community development officers.

The second point is about the amount of housing. We must recognise that 11,000 houses will not be the end. There is a need for more rural and islands housing if we are to transform the future of our rural communities and see them thrive. We need to find better ways to assess the value and impact of building rural homes that captures the cultural, environmental and social benefits to communities, so that we can tackle our rural and islands population crisis.

The plan is very welcome, but it needs all key stakeholders, especially the Scottish Government teams and local authorities, to buy into it and to work together. We need to move away from some of the familiar approaches to housing options and to build flexibility into the mix in order to respond to nuanced needs, on the ground.

For community-led development to work, communities must be seen as full project partners. That will mean communities being involved in the very early stages of development or, if they take the lead, support being there from all levels of government and barriers removed.

I would like to see more work being done on how the rural and islands housing fund can be opened up to support the growing demand for co-housing, which is a place-making model that has a lot to offer in terms of wellbeing by tackling isolation and loneliness.

Although it is good to see that the Minister for Housing has been in discussion with the Cabinet Secretary for Rural Affairs, Land Reform and Islands, this is a much broader issue. I would like communication and collaboration to be taking place across a wider range of portfolios in order that we can drill down into community needs. For example, the need for carers in our rural communities means engaging with the health and social care sector as much as we engage with housing and rural affairs teams.

I welcome the commitment to building more housing using modern construction methods. It would be good to see the Scottish Government engaging with the numerous small companies that are based in my region, including Makar and North Woods, which have track records in successful off-site construction and have lots of experience to offer.

Small construction companies tell me that keeping down the costs of construction is a challenge. They do not have sufficient cash flow to support the purchase of large quantities of materials. In some cases, such materials, such as oriented strand board—OSB—are being manufactured right on their doorsteps. That is why I am fully behind the approach that Communities Housing Trust is proposing—to establish a materials hub so that we can build at scale, and to spread that across the area. The idea is that materials can be purchased in bulk by the customer and made available to local construction companies. That approach has the potential to bring confidence to the small-scale construction sector and to support it to develop its apprenticeships programme. If we are going to build 11,000 houses—and more—and take forward a placemaking agenda, we not only need communities to lead; we also need buy-in from the people who are going to build the houses.

The investment plan should be an opportunity to ensure that there are, in all our communities, more people with hands-on skills to maintain and repair local buildings. Those skills are as relevant to maintenance and retrofitting programmes as they are to building schemes. Let us plan to preserve and to maintain, as well as to build our communities.

To conclude, I say that we must do all that we can to ensure that there are homes for everyone who wants to live in the community, from young to old and from families to single people. We must take an approach, and listen to the calls for 11,000 homes in Highland, that will see lights going on in the straths once again.

15:42  

As the motion indicates, the Scottish Government is, not least through some serious investment in social housing, taking much vital action to address the housing crisis that now exists in many parts of the Highlands and Islands. Indeed, any debate around the issue must begin with the frank admission that, for young people in some rural communities, “crisis” is the only word that can be used.

Decades-long trends in depopulation have accelerated since the pandemic. Islands house prices have increased far more substantially than islands wages. Those who are on the bottom rungs of the housing ladder simply lack the economic means even to begin to compete with retirees, property investors and second-home purchasers. No Government can build houses at the rate that they are disappearing in those ways. For my Na h-Eileanan an Iar constituency, between 2018 and 2028 the working-age population is due to decrease by 6 per cent and the number of children is due to decrease by 13 per cent. I regret to say that, at the same time, the islands are being touted in the national press as an idyllic wilderness—the best place in the UK for people to retire to. That definitely does not help.

We are already seeing the impacts of all that on businesses and public services, as critical vacancies go unfilled. In many communities, the balance is shifting rapidly away from year-round lived-in houses to short-term lets and second homes. When that trend gets out of hand in a community the school closes, families relocate and, in the space of a generation or less, a village is transformed into a retirement or holiday community. The Gaelic language plan is also being squeezed under those pressures.

Writing in The Observer earlier this month, Ness-born poet Donald S Murray warns of the dangers of allowing the idea to take hold that the Highlands are merely a place where

“the natural world has a greater appeal than the existences of the humans in their surroundings.”

I do not say all that lightly: I am an incomer myself. The islands need new people, but they need a mix of new people.

Getting the housing question right is now an existential concern for many of the communities that I represent, so I very much welcome the publication of “Rural & Islands Housing Action Plan”. The plan supports Scotland’s long-term strategy in “Housing to 2040” and will bolster the commitment to deliver 11,000 affordable homes—of which 70 per cent will be for social rent—by 2032.

In response to some of the accusations that have been thrown about during the debate, I should say that in my constituency more than 650 housing association properties—roughly a third of the Hebridean Housing Partnership’s stock—have been built since the SNP came to power in 2007. The Scottish Government has made more than £43 million available for affordable housing in the islands over this parliamentary session alone. That money now needs to be spent wisely.

It is not just about building homes; it is also about keeping homes in the housing stock. Hundreds of islands houses have slipped out of domestic use as the number of short-term lets has exploded: the number of short-term lets is nearly two and a half times what it was a decade ago. Short-term let licensing and control areas now give local authorities much-needed options to exercise controls in communities where such controls are needed.

In common with other areas, my constituency has a high number of empty houses, so I welcome the plan’s focus on building on the work that has happened across the country, much of which can be said to have been pioneered by Comhairle nan Eilean Siar and its empty homes officer, Murdo Macleod.

With nearly a quarter of all second homes in Scotland being in the Highlands and Islands, many people across the region consider that the unregulated increase in the number of second homes is helping to fuel the housing crisis. Giving councils the ability to levy additional charges on second homes will help to tackle the problem while bringing the approach to them into line with the existing rules for long-term-empty properties. I believe that the Scottish Government should consider granting powers to restrict the number of further second homes in any locality where the supply of housing for full-time habitation is under pressure.

I welcome the plan’s recognition of crofting’s vital role in maintaining the population of the Highlands and Islands, and its commitment to reviewing the croft house grant scheme, in search of improvements. The upcoming reform of crofting law should, in my view, include looking for ways to make it easier for affordable housing developments to progress on land that is under crofting tenure. I know that that has been a struggle in the Western Isles, where such land accounts for the great majority of the land. There is also an urgent need to tackle what are increasingly becoming, in some cases, absurd prices for croft tenancies on the open market.

Although there are no easy solutions to the housing crisis, “Rural & Islands Housing Action Plan” lays the foundations for a range of actions that have the potential to make a real difference in providing the housing that island communities urgently need.

15:48  

As I have often said, my constituency is the most beautiful in Scotland, and I still believe that. Living in small communities such as Galloway has its many attractions, but it also has its disadvantages, including the significant lack of quality affordable homes to ensure that people can live and work in rural Scotland. For many years, there has been a notable lack of suitable homes in the south. Much of the housing stock is old, with poor energy efficiency.

We know that there is also a shortage of skills in rural Scotland, especially in traditional trades. For example, there is a shortage of plumbers, joiners and electricians. Inevitably, that leads to a limited number of locally based house builders.

The lack of suitable housing is a huge factor in the recruitment challenges for both public and private employers, and it undoubtedly prevents Dumfries and Galloway from delivering on its considerable potential. We face a vicious circle, with house prices in the south remaining below the national average, but it is equally important to recognise that, at the same time, we have a high price to income ratio as a result of our historically low-wage economy. In essence, that means that affordability for local people is a serious issue.

The shortage of supply has also been a major problem in the local property market, with a lack of new social housing and affordable homes being built to meet growing demand. That makes it almost impossible for local first-time buyers and local workers on low incomes to get on the property ladder. However, it is questionable that the increasing demand for affordable housing will be met if the Scottish Government’s rural and islands housing action plan is anything to go by. It promises to deliver 110,000 affordable homes by 2032, but with only 10 per cent going to rural and island communities.

I will repeat the facts, because they are worth repeating. In terms of land area, urban Scotland accounts for somewhere around 2.2 per cent of Scotland and rural areas account for 97.8 per cent. In terms of population, urban areas account for 83 per cent and rural areas account for 17 per cent. It is typical of the Scottish Government that it thought that we might cheer the commitment to have 10 per cent of those affordable homes for rural housing. Is that disappointing? Yes. Is it surprising? No.

It is also highly questionable that that number will be built, given the 16 per cent year-on-year cut to the housing capital budget, equating to nearly £113 million. It is little wonder that the Scottish Federation of Housing Associations and the Chartered Institute of Housing Scotland have heavily criticised the reduction in funding for the affordable supply programme from £893 million to £721.6 million. Those housing bodies, which have called for an increase in funding for new homes, argue that the reduction does not fit with the Government’s focus on reducing poverty in Scotland. The national director of CIH Scotland said:

“the budget for new affordable homes has been reduced by over £200m in real terms which makes the challenging target of 110,000 affordable homes ... even more difficult.”

Sally Thomas, the chief executive of the SFHA, said:

“social housing provides one of the greatest protections against poverty, and we are alarmed to see a cut to the Affordable Housing Supply Programme which, coupled with continuing uncertainty over rent setting and inflationary pressures on costs, seriously threatens our members’ ability to build homes. A budget decrease of any amount will still reduce the number of homes our members can build, and we urge the government to rethink this cut if it’s serious about tackling poverty in Scotland.”

If the member believes that social housing is so important, why does he support the UK Government cutting the capital budget for the Scottish Government?

That is so sad, and it does us a disservice to continually deflect about where we are. The block grant in Scotland increased, so it is about priorities. Obviously, the SNP Government does not prioritise rural areas and affordable housing.

We have the stark prospect of fewer homes being built, which will do little to encourage our younger generation to remain close to home or, indeed, return home. Depopulation remains at crisis point. Young people want and deserve a future that they can plan for, which is why many are having to consider moving to more urban areas to gain a decent wage, better prospects and, more importantly, a roof over their heads.

Depopulation in rural Scotland was highlighted last year when the report “Population Estimates for Settlements and Localities in Scotland, Mid-2020” revealed the growing movement towards larger towns and cities. Dr Calum MacLeod, the policy director at Community Land Scotland, said:

“The report starkly illustrates the depopulation and demographic crisis faced by many of Scotland’s rural areas. We urgently need to repopulate these areas and also resettle previously inhabited rural places where it’s practicable to do so.”

Dr MacLeod continued:

“That requires tangible action in the form of affordable housing, good quality jobs, better infrastructure and digital connectivity to fulfill the Scottish Government’s commitment to increasing the population of rural areas of Scotland contained in National Planning Framework 4”.

As I mentioned, those who are fortunate enough to have a home often encounter another major headache, which is fuel poverty. Many rural properties that are off grid rely on alternative heat solutions, many of which are costly and in some cases unsuitable. In its latest report, Changeworks, a leading environmental charity, highlights the inequity facing rural households, identifying several negative factors that, when combined, create a perfect storm of very significant fuel poverty across rural Scotland. The plight of Scottish households driven into fuel poverty is worsened by the lack of effective alleviation measures. The chief executive, Josiah Lockhart, said:

“This report highlights an unjust reality; rural Scotland experiences higher levels of fuel poverty than the rest of the country.”

I have previously highlighted in the chamber the stellar work that South of Scotland Community Housing has carried out. Until March 2020, the organisation was core funded by the Scottish Government via the more homes programme. However, the Scottish Government withdrew funding, despite the fact that SOSCH provided long-term technical and professional support to community organisations and landowners on the planning and delivery of affordable homes, which addresses local needs.

I am pleased that the ministers, for once, have taken on board my and others’ calls to restore SOSCH’s funding. Albeit that it is a U-turn, it is a small step in the right direction but not the giant leap that rural communities were hoping for and need in order to survive.

15:55  

I refer members to my entry in the register of members’ interests. I own a small cottage in Lossiemouth, which has been let on a long-term basis for the past 16 years.

This is not the first time that I have made this speech in this session of the Parliament and I have a feeling that it might not be the last occasion. When I previously made the points that I am going to make again, the minister was kind enough to suggest that I should write to him, fleshing out the detail. I was happy to do that. He has been energetic in his portfolio and I was keen genuinely to try to influence the Scottish Government to take up some ideas that I have had and that have enjoyed fairly substantial support in rural Scotland.

I set out those ideas in a letter of 1 September. It was not a short letter—I do not think that I can lay any claim to any talent for brevity. It was six pages of closely typed foolscap. I have not yet received a reply, but I hope that the minister will do more than consider what I have to say today, because I say it as somebody who spent 20 years as a lawyer, working in conveyancing to a great extent, and now nearly 25 years as an MSP for a constituency that is largely rural. Over that period, I have been fortunate to work closely with land agents, surveyors, landowners, farmers, tenant farmers, crofters, local builders and local artisans. Therefore, I have a sense of what we need to do to tackle a problem on which we all agree that we need to do far better.

As Dr Allan and Kenny Gibson argued, housing associations and local authorities do a great job in providing affordable and mid-market rented housing. They are professional, and it is not easy. The complexities and delays are extremely difficult. The minister is well aware of that from his time in local government. However, there is a danger of missing an opportunity in the strategy. I have found two passing references to working with private landowners but no more than that. I could not see any of the action points at the end correcting that other than possibly in the medium to long term.

When I say “private landowners”, I am talking about a whole panoply. I am talking about landed estates, those who have particular land holdings, farmers—substantially farmers—and crofters, including secure tenant farmers. I believe that most owners really want to do everything that they can to develop the asset that we have of privately owned land. They want to make a contribution to providing more housing in rural Scotland. Our approach should be to assist them by working very closely with them.

Nobody knows more about rural Scotland than people whose families have, in many cases, farmed or crofted the land for hundreds of years. In the October recess, I met some farmers just outside Nethy Bridge. Their knowledge of the local area and how to do things is immense, as are their skills. They are usually not only farmers; they usually have many skills that they put to good use.

I say to the minister that he should reach out to them. There should be a standing committee, and there are a number of specifics that would help.

First, I have suggested before, and I will say again, that permitted development rights that extended to building new homes of five houses per unit would be a terrific step forward. I believe that that suggestion is supported by the NFUS and SLE. I sent a letter to them about it and they confirmed to me privately that they support it, as I see in the SLE briefing. It would do a tremendous amount to mobilise the sleeping capital that is being held in private land in Scotland.

A tremendous amount of capital is tied up in farms. Although most farmers are not cash rich, they are land rich. By no means is all land suitable for building houses. Some land, such as peat and rock, cannot be built on.

I completely agree with you about expanding permitted development rights. You also make a very good point—

Please speak through the chair.

I am sorry, Presiding Officer.

The member makes a good point about the demolition of buildings, which is not allowed, or changing the use of specific agricultural or forestry buildings. I want to know whether that is his personal opinion or whether he has the backing of his SNP colleagues.

Fergus Ewing, I can give you the time back.

Thank you.

That is for the minister to say. I am attempting to persuade the minister to adopt measures in addition to his plan, which contains many welcome steps, because I believe that it would make a tremendous contribution to tackling the problem. Of course, it would not be so expensive. If we enable people to use their own money instead of taxpayers’ money, what is not to like about that? Does that not make economic sense?

Our farmers—50,000 of them—are the sleeping giants of rural housing. Just think what we could do even if only 10 per cent of them took that up. It could transform the situation. They are the sleeping giants. Let us not leave them in a state of somnolence like some Scottish Rip Van McWinkle. Let us wake them up and deliver what we can for Scotland.

I had intended to say an awful lot more but, as I lack any skill in brevity, I have completely failed to do so. I hope that the minister will respond to what is a positively meant constructive suggestion that I think would fly and would help him and us all to achieve the targets that have been set out today.

Thank you, Mr Ewing. I am sure that there will be further opportunities.

We move to the closing speeches. I call Rhoda Grant, who joins us remotely.

16:02  

Thank you, Presiding Officer. I draw members’ attention to my entry in the register of interests, in that I own a sixth share in a family home.

On a point of order, Presiding Officer. I am sorry to interrupt Ms Grant, but I am afraid that the audio from her transmission is not very audible.

I was just making the same point, Mr Cole-Hamilton, but I think that Ms Grant was about to burst forth at a higher volume. Ms Grant, if you wish to start again, you have around seven minutes.

Okay. Can you hear me now?

Loud and clear, Ms Grant.

Perfect, thank you. I repeat that I draw members’ attention to my entry in the register of members’ interests, in that I own a sixth share in a family home.

The “Rural & Islands Housing Action Plan” is a first step, but it really lacks ambition. As Mark Griffin said, we now have a rural housing emergency, and we know what the issues are. Second homes and holiday lets inflate prices, as pointed out by Colin Smyth and others. There is also urbanisation, where people are moving to centres of population because of a lack of homes and services in our more rural communities.

Housing costs are more expensive in rural areas because there are no economies of scale. For instance, the six new affordable homes that were built in Barra cost £1.4 million, which is £233,000 a unit. That is a huge cost in a rural area. Housing policy is made for urban areas, so until we have a policy that is made for rural areas by rural communities, we will not get the housing that we need in those areas.

Mark Griffin and Rachael Hamilton talked about depopulation and the fact that the lack of housing was a key driver of that. Jamie Halcro Johnston also quoted the HIE report, which showed that young people were leaving because of a lack of housing, which is true for every generation, not just young people. People are being forced out because of the lack of housing. Finlay Carson quoted Calum MacLeod’s work on the need to repopulate rural Scotland, because if we do not, the economies of those areas will fail. With our young people being frozen out, we will also end up with an ageing population, and there will be no young people to provide services.

Members from the Highlands and Islands recently met Highlands and Islands Enterprise, which talked about rural housing being a priority, because the lack of it is holding back economic development in those areas.

Mark Griffin talked about meeting Salmon Scotland, which flagged up to him the issues of a lack of housing for workers in those communities, which is holding back development and communities.

Colin Smyth talked about hospitality businesses, which are really struggling to house staff. That is certainly true in my region—the Highlands and Islands—where many hospitality businesses close for two days a week because they do not have staff to cover shifts and they need to give staff time off to enable them to rest.

All services—health, education and many others—are suffering because there is no housing. The minister mentioned key workers, which is a case in point, especially in the health service, to which people cannot be recruited to take up posts. People want to move, of course, as the standard of living in remote rural communities is very attractive, but the inability to find a home to live in makes that impossible.

It is not always about affordable housing. We cannot attract general practitioners because no suitable housing is available. Many other professionals who might need to buy a house cannot do so because of the pressure on the market from second homes and holiday lets.

Many people would build their own houses, but a cost is involved in that. I talked about the social rented houses on Barra, but even self-build means that the transport costs of materials are higher. Access to planning and to land also causes problems.

Many speakers talked about the 10 per cent figure not being enough, given that 17 per cent of people in Scotland live in rural areas. I agree with that. In addition, the 10 per cent that is ring fenced for rural areas includes remote small towns and accessible rural communities—which are, to all intents and purposes, commuting communities. If those areas are covered, remote rural areas—where the housing crisis really happens—are going to be left out. We need to focus on remote rural, not pursue the urbanisation of rural communities by including rural towns.

I welcome the fact that the Government has said that it will review the croft house grant scheme. That is a positive move, because the grant is not enough to build a house. It needs to increase; to include workspace, because crofting is a business; and, I suggest, to be paired with a self-build loan, to make self-building affordable. Kenneth Gibson and Ariane Burgess talked about how self-build means that local companies are involved in the build. Using local companies is more affordable than having large companies coming into the area and having the additional expense of workers having to stay over and travel. Using local procurement would be really good in providing jobs and would be a boost to the local economy.

Mark Griffin made a number of positive suggestions to the Government—for example, on examining how the Crown Estate might help by taking some of the money that it makes from its leases of the seabed, the compulsory sale of empty homes to local people, and charging council tax on empty homes. Colin Smyth talked about good practice in his area that needs to be promoted and shared as good practice elsewhere.

We need to pursue a rural burden on every house that is built or renovated using Government money. We need to find a way of protecting rural homes—especially those that are created or renovated with public money—and have them stay within those local markets. I therefore urge a look at a two-market option or a rural burden, in order to keep those homes in community hands.

Alasdair Allan talked about the impact on the Gaelic language of forcing people out of communities. Alex Cole-Hamilton talked about fuel poverty, which is another huge issue in rural areas.

I am conscious that I am coming to the end of my speaking time. Many constructive comments were made in the debate, which I hope that the Government will listen to. I hope that it will listen to the comments about the fact that the action plan is not ambitious enough and that it is a missed opportunity. The action plan needs to be developed by those who know and understand rural areas, because lazy mistakes are made due to a lack of understanding of the needs of rural communities.

16:10  

Like other members, I welcome the opportunity to debate housing in Government time. I thank the many organisations that have provided useful briefings ahead of today’s debate.

The debate is the first opportunity for the Parliament to look at the details of the Scottish Government’s “Rural & Islands Housing Action Plan”. The question that we must ask ourselves is whether the plan is ambitious enough to meet the housing needs of our rural and island communities now and in the future. I do not think that it is. Many of today’s contributions have pointed towards that, with members notably saying that it undercuts rural Scotland’s entitlement to 17 per cent of homes, which should have been on the face of the plan. The Government needs to reflect on that. As the briefing from Scottish Land & Estates makes clear, the Scottish Government’s rural and islands housing plan is

“not ambitious or radical enough to deliver the step change that is needed to meet rural housing needs.”

In addition, the Scottish Government needs to consider the impact of other policy areas on housing supply. The minister touched on policy interventions in his speech. If we are to develop long-term solutions, the Scottish Government needs to focus on the causes of the housing crisis and to avoid exacerbating it by just tinkering around with its symptoms. Recent and proposed legislation continue to undermine confidence in housing providers, which is helping to reduce the supply that is available—the opposite of what ministers want. We have seen that happen due to rent freeze and short-term let policies.

Rural and island developments are full of challenges. The primary challenge is viability, which usually involves the cost of infrastructure due to lower levels of existing connectivity and services in many areas. Whether community led or, as we have heard, landowner led, the principal challenges remain the same, as do the objectives in relation to prioritising where housing needs to be located in our local and rural communities.

As the Scottish Federation of Housing Associations has stated in its briefing,

“It is highly unlikely that we (as a country) will deliver 110,000 affordable homes in our remote, rural and island communities if the Affordable Housing Supply Programme ... fails to deliver”

on its target for 2032. Crucially, as things stand, the Government is not on track to achieve its target on the supply of affordable housing; indeed, delivery is slowing down. The most recent quarterly statistics show huge drops in the number of approvals and starts under the affordable housing supply programme. The Scottish Government has no target for completions for this parliamentary session, either. It is disappointing, but it is clearly not on track to meet its housing to 2040 policy.

The time that it takes for developers to be granted permission is also problematic, and there is little in the plan to suggest how priorities will change around that, which, again, is a missed opportunity. I hope that the minister will reflect on that beyond the debate, because looking at the bureaucracy in our planning system should be a priority. It needs to be reviewed, and we need to see how we can cut down times. NPF4 was another missed opportunity to do that.

Jamie Halcro Johnston and Kenny Gibson made important points about the low take-up of Government schemes, which we have seen over the past 16 years of this Government. That must be prioritised. For example, in April, ministers announced £25 million to help to boost the number of key workers’ homes and tenancies in rural areas. The Government does not know how many people that money has supported, but it is clear that, when announcements about such schemes are made, we need to see—not just for a press release but on the ground—how they are taken up and delivered. That is critically important.

On the point that I made about council planning departments across the country, the average processing time for local housing applications is 14 weeks, according to Homes for Scotland. That is 16 per cent longer than the 12-week statutory framework, and it compares with an average time of nine weeks pre-Covid for getting approval to build.

The fact is that the SME builders that will be tasked with delivering most of the individual builds and small-scale developments are also in a difficult position. The Government does not know how many SME homebuilders there are in the country. It is clear that we must see what support can be given to them, because we have seen a decrease in the number of SME homebuilders that are active in our rural and island communities. There were 782 in 2007, with the latest figure, from 2017-18, showing that that number had gone down to 465. That means that 40 per cent of those SMEs had disappeared during that period, while we do not know what that figure looks like today. We must begin with those who will do the work to bring empty homes back into use or to build new homes and must look at how SMEs will be able to deliver that.

An important issue that was raised during the debate by Emma Harper has also been brought to our attention by the Marie Curie charity: we must ensure that we have homes in place to meet the needs of an ageing population. According to MND Scotland, 23 per cent of the local authorities that responded to an inquiry have not actually developed a definition of an accessible home. I welcome the fact that the Scottish Government has said that the new Scottish accessible homes standard will provide that clarity, but that should have been part of this housing plan.

Rachael Hamilton outlined Scottish Conservatives’ proposals and ideas and I hope that the minister will look at those, because we want to see a step change for rural and island communities. We want to see the establishment of a Scottish housing delivery agency, the implementation of a rural homes just transition package and permitted development for rural homes that will not only provide those homes but will support the businesses that provide for and sustain our communities. We also support the introduction of compulsory sale orders.

This week could see the first instance of a Scottish council declaring a housing emergency, with the City of Edinburgh Council debating a call for that at its full council meeting on Thursday. This Government has been in office for 16 years and the housing crisis is deepening. This plan misses the opportunity to focus on the real-world solutions that would help to realise the potential of our rural and island communities.

I support the amendment in Rachael Hamilton’s name.

I call the minister to wind up the debate.

16:17  

I thank colleagues for their contributions to the debate, which has been mainly collaborative.

I meet Miles Briggs and Mark Griffin regularly and will continue to discuss the subject in future, listening to any ideas that they bring forward and working on those with them.

Members’ contributions have clearly shown the importance of delivering more housing in rural and island areas to meet the needs of communities. The diverse make-up of our rural and island communities is something to be celebrated, and I am proud that this Government is focusing on doing more, through the action plan, to support those communities to thrive. I will say more about that in a moment, but first I want to touch on some of the views that have been expressed.

Rachael Hamilton and others mentioned that 17 per cent of Scotland’s population will get 10 per cent of the affordable housing budget, but I reiterate that that 10 per cent figure is a minimum and that we hope to be able to deliver more. The 17 per cent figure does not determine where funding goes; the funding is based on the targets. I would be happy to look at that. She also talked about the pressures in her own area, and I would be happy to visit her there to talk about that.

Mark Griffin touched on the consultation on second homes. He will know that that has just finished and that the Government will be moving forward on that.

Will the minister give way?

I am conscious of time. If I can go a little further, I hope to be able to pick up some of the points that Mr Carson made.

We talked about the £25 million fund for key workers, which is important, and discussions on that continue.

Alex Cole-Hamilton made a really important point about fuel insecurity. The Scottish Government has recognised that with its £30 million fund, which is really important.

Ivan McKee made a range of important points about how housing is key to economic development. I come from a local government background. Local housing strategies, local development plans and economic development strategies must be tied together. That is incredibly important, as has come through from some of our discussions. It is also important to work with bodies such as the Scottish Council for Development and Industry. Off-site options are being considered, which is really important.

Land capture and other issues were mentioned. There will be discussion and debate about that when the Government introduces its land reform bill. The skills element is also incredibly important.

Jamie Halcro Johnston talked about the all-tenure approach. We need to be, and are, working with Homes for Scotland on that particular point. There was also mention of stakeholders such as SLE, the NFU, crofters groups and employers. Their involvement is really important.

One of the key issues—I know that there has been a debate in the Parliament about this—is the role of rural visas in ensuring that we are populating our communities and getting people back to work in them. I hope that the Conservatives will change their view on the role of rural visas.

Kenny Gibson mentioned project funding, which is important. We gave the Communities Housing Trust £1 million to tackle capacity in some of those groups. That is an incredibly important point and something that I heard loudly and clearly on my visits during the summer. It is important that we work with employees. That goes back to my point about talking to local authorities about the housing strategy, the economic development strategy and their local development plans. Colin Smyth talked about how we do that and the role of South of Scotland Enterprise, which is really important.

Labour shortages are another really important issue. One of the wider issues is the need for us to try to bring immigration policy back into the Parliament, so that we can use that role to get more people in. We have not just skill shortages but labour shortages. That comes back to the role of the local development plan, the economic development strategy and the local housing strategy. Colin Smyth also mentioned empty homes. We will continue to discuss that issue. I know that the funding for his area has increased by £15 million to £106 million in this parliamentary session.

Emma Harper mentioned depopulation challenges. I come back to the rural visa and immigration, which are really important. I will pick up on the VAT issue, and I am happy to meet Emma Harper in Dalbeattie to talk about the project there.

Ariane Burgess talked about the role of community-led housing. I visited a project in Gairloch, which is an incredible example of how that has worked. Funding from the Communities Housing Trust was an important part of that. Placemaking is important.

Alasdair Allan touched on the balance of accommodation, which is important. Just a few weeks ago, the Stornoway Gazette reported that there are 180 short-term lets in Harris alone. There are funding challenges around that. However, the issue is not just about funding; it is about making projects work. We talked about local control areas, and that is a decision that is up to each local authority.

Finlay Carson touched on the role of economic development, local development plans and local housing strategies being tied up, because we cannot regenerate areas without having proper housing and vice versa. Again, I would be happy to catch up on that when we discuss the broader issues.

Will the minister take an intervention?

I am happy to, if I have time, Presiding Officer.

I can give you the time, minister.

Has the minister factored into the 10 per cent of the 110,000 homes that are to be built in rural areas the impact of the lack of capacity and proper funding of planning departments in the likes of Dumfries and Galloway, which are really struggling because of the huge number of wind farm applications and their complete inability to deal with planning applications?

I am going to touch on that—I will come back to it.

On the point that Fergus Ewing raised—I will make sure that he gets a reply to the letter—I have engaged with SLE, the NFUS and crofters on the issue of development rights. I have visits planned, and I agree with him that there are huge opportunities. I know that he will be aware of the project at Tornagrain, which was initiated by a landowner. I am happy to talk to Mr Ewing about that. I totally agree with the point that he made.

Will the minister take an intervention?

Do I have time, Presiding Officer?

If it is brief.

One of the key points of the plan is to review the bureaucracy that is holding back potential changes to policies. Is the Government willing to take that forward above and beyond the plan?

I agree with the point that Finlay Carson made on that.

Rhoda Grant made a point about the croft house grant scheme, which is also important. She mentioned rural burdens, which are also mentioned in the report.

I want to get back to some of the other points that were touched on. There is a consultation on resourcing for planning going on at the moment. We have been working closely with the Royal Town Planning Institute, and I have been working with Joe FitzPatrick on that. We take our commitment seriously.

The budget is one of the key things that has been talked about during the debate. The target of £3.5 billion over the parliamentary session has not changed. The profile changes during that period, just as it does in other budgets. The figure continues to be £3.5 billion, which will support a total investment package of £18 billion and up to 15,000 jobs each year. Our rural and islands housing fund is also delivering for rural communities and providing an additional funding route for those who are not able to access traditional affordable housing, as we have talked about.

In the next year, we can begin to set out some of the priorities. We will be delivering secondary legislation to enable councils to apply a premium of up to 100 per cent on council tax rates for second homes from April 2024. We are working closely with local authorities and registered social landlords, including the Scottish Federation of Housing Associations, on that. We are working with the Scottish Empty Homes Partnership, local authorities and owners in order to bring more homes back into use. We are also providing the financial support that I mentioned to the Communities Housing Trust and South of Scotland Community Housing, to enable them to support communities to drive capacity.

In addition, we will commission independent research to support a review of affordable home ownership in rural and island areas, and our five area-based teams will work closely with local authorities and others.

As I mentioned earlier, I thank the many organisations and individuals who have taken the time and effort to contribute to the development of the action plan. The action plan is a start; much work is going on and will continue to go on. The action plan sets out the short-term, medium-term and long-term actions around that work.

Since this Government was elected, we have prioritised housing, and I am proud to say that we will continue to do so. I am glad that we have had this debate. Housing is a key part of our interdependent missions and a key part of our mission to prioritise our public services and focus on equality and opportunity. We have committed record investment to affordable housing, delivering more than 10,000 affordable homes in rural and island areas since 2016. We have introduced our game-changing rural and islands housing fund, and we have now published the “Rural & Islands Housing Action Plan”.

During our engagement with stakeholders on the action plan, we heard that the pieces of the jigsaw are all there and we heard suggestions on how they can be brought together. The action plan seeks to achieve that. As I said earlier, the ambitions that are set out in the action plan cannot be delivered solely by the Scottish Government. That will require collaboration with a wide range of partners, including local authorities, housing associations, landowners, businesses and the Scottish Government, including the enterprise agencies in Highlands and Islands and the south of Scotland, to name a few.

From my conversations with partners, I strongly believe that there is a willingness, and I look forward to working with colleagues and partners as we deliver the action plan. I have been very clear that I am in no doubt about the vital role that housing plays in generating sustainable local economic growth. The appetite, enthusiasm and support for rural and islands housing remain, even when things might seem insurmountable, challenging or complex. The Government remains committed to working with partners to deliver the right homes in the right places, in order to meet the needs of our rural and island communities. Therefore, I ask the Parliament to support the motion.

That concludes the debate on the “Rural & Islands Housing Action Plan”.