Scottish Housing Budget - What this means for the country’s housing crisis

“Having housing at the front and centre of political debate is hugely important given the impact of a safe, warm home on individuals’ lives”.

The excitement amongst homebuilders and social housing providers could be heard across Scotland last week when it became clear that housing funding would be restored in Shona Robison’s budget. 

Last year, whilst still under Humza Yousaf’s premiership, the budget was slashed by around £200m, forcing social housing providers and developers to rethink their homebuilding plans for the coming year. Yet, this was always unlikely to be a sustainable position with the Scottish Parliament and various councils the length and breadth of the country declaring housing emergencies. The First Minister, John Swinney, who is the final arbiter of budget priorities, has also been around the block enough times before to know what way the political wind is blowing.

That is why it was not a complete shock to see £768 million – a real terms increase of more than a quarter - ringfenced for more affordable homes next year. According to the Scottish Government, this means that 8,000 more homes for social rent, mid-market rent and low-cost home ownership will be built or acquired. This was welcomed by much of the industry and should genuinely help to unlock developments across Scotland.

This was followed last week by an intervention by Sir Keir Starmer saying that he will unleash a ‘golden era of building’ homes and critical infrastructure like schools, hospitals, railways and reservoirs, in England. To the builders, developers, and young people and families across the country who are desperate to buy their own home, this will be music to their ears. But do both of these positive announcements last week stand up to reality? Similarly, SSEN has announced a £20bn investment to upgrade the transmission network in the north of Scotland to support net zero transmission and long term energy security. The construction of this network will bring considerable economic benefits to the region. It will create a need for up to 5,000 highly skilled workers in the Highlands and further afield by 2030.

Well, it is certainly not the first time that we have heard there will be sweeping changes to the planning system as Starmer announced last week. Time and time again when councillors, MSPs, MPs and others are faced with the electoral reality of supporting unpopular planning decisions in their own constituency, reforms are watered down and consequently do not deliver the radical change needed.  Certainly all of the housebuilders we represent are clear that the planning system needs significant improvements to unlock the current log jam where developments are delayed in an under-resourced system which appears to operate at a snail’s pace despite the widely acknowledged housing crisis.This will require a joined up approach if we are to get anywhere near this target. It will demand proper investment and willingness from the private sector, government, as well as from Registered Social Landlords (RSLs), working in partnership with the local authority.

Similarly, on closer scrutiny, the new funding for affordable homes in Scotland is not quite as transformational as it might seem at first glance. First of all, it can be argued this is just another peak on the yearly rollercoaster of public spending before a future trough. Chief Executives up and down the country crave certainty to allow them to plan for multiple years ahead. Solving this problem could deliver real gains in terms of the number of homes being built.

The other reason is that the funding is perhaps just not enough. According to the Scottish Parliament Information Centre, ‘in real terms (at 2024-25 prices), the overall budget is 3% lower than it was in 2022-23’. Similarly, when we compare it to 2021-22, funding is at least £200m down in real terms.

Regardless, having housing at the front and centre of political debate is hugely important given the impact of a safe, warm home on individuals’ lives. Hopefully these changes indicate that the tide is starting to finally turn in addressing the housing emergency.

Jack Hope is a Public Affairs and Public Relations Consultant for Perceptive Communicators which specialises in the built environment.