Scotland cuts affordable homes budget by 26%

The Scottish government said the cuts were necessary because the UK government did not “inflation-proof” its capital budget, resulting in a real-terms cut in capital funding to Scotland.

However, critics have pointed out that Scottish first minister Humza Yousaf’s decision to freeze council tax in October has impacted local government finances and homelessness services.

The Scottish Federation of Housing Associations (SFHA) said the cut meant the Scottish government’s target of building 110,000 affordable homes by 2032 will be missed.

Sally Thomas, chief executive of the SFHA, said: “Today’s budget is an absolute hammer blow for tackling homelessness and poverty across Scotland and will have long-lasting consequences for the nearly 250,000 people throughout Scotland stuck on a waiting list for a social home, as well as for existing tenants and the housing associations which support them.”

She added that it was “devastating that the first minister would abandon his defining mission to tackle poverty by failing to support people who need social homes”.

“It is the worst possible budget at the worst possible time,” she said.

Callum Chomczuk, director at the Chartered Institute of Housing (CIH) Scotland, said the budget cut was “devastating” and the overall budget “fails to recognise, let alone address Scotland’s housing crisis”.

David Bookbinder, director of the Glasgow and West of Scotland Forum of Housing Associations, said: “It’s distressing to see this level of cuts to a programme that was already set to miss its 110,000 homes target by tens of thousands.

“That target has been drowning for some time and is now dead in the water. We need to see ministers stop referring to it, as this just insults the sector’s intelligence.

“We note that cuts to ‘financial transactions’ (65%) are greater than the cuts to capital (14%), which means the non-social housing part of the new supply programme takes the brunt.

“But at the current time, any cut to the social housing programme is incredibly disappointing, and awful timing. It’s especially painful in the context of the first minister’s decision to freeze council tax – a decision that has to be funded from cuts elsewhere and which doesn’t even benefit our poorest households.

“And it was one decision which can’t be blamed on Westminster: in fact it saves Westminster money.”

Inside Housing asked the UK Treasury to respond to the Scottish government’s claim of a real terms cut in capital funding. A UK Government spokesperson said: “The Scottish government is well funded to deliver upon its devolved responsibilities – including housing – as we are providing a record £41bn per year settlement, the largest since devolution.

“The Scottish government can also borrow up to £450m for capital investment on top of this record funding, and the UK government has agreed to inflation-proof that limit going forward through a renewed fiscal framework that provides greater certainty and flexibility for the Scottish government to manage its budget.”