Council Faces 45% Cut In Housing Development Spending

4th March 2010

Highland Councillors were advised today (Thursday) that the funds available to them in 2011-12 to promote affordable housing developments is to be significantly reduced by the Scottish Government.

Councillor Margaret Davidson, Chairman of the Housing and Social Work Committee, revealed that funding was being cut to £17.5 million - a bigger cut than anticipated and 45% less than the current funding level of £32 million.

She said: "We were anticipating a reduction in the level of funding we receive for new affordable housing for 2010-11, but the cut in our allocation is even worse than we had feared. Our original estimate in 2011-12 was to start work on up to 350 house sites. Although no figures have yet been agreed ,given this level of funding the actual number will be substantially less.

"This is real disappointment as we have made such good progress in recent years in providing more sites for much-needed affordable private and rented accommodation."

In 2007-08, a total of 421 houses were completed. This figure rose to 525 the following financial year and 567 in 2009-10. A total of 391 are anticipated in this financial year.

The Highland Council will continue to use its Landbank Fund as a revolving facility to forward fund housing projects with a guarantee from the Scottish Government that any loans will be repaid in April 2011.This will maximise the amount of new affordable housing in the Highlands despite next years cuts.

Councillor Davidson called on the Scottish Government to give higher priority to housing developments in the Highlands given the large housing waiting lists and the acute need for affordable housing. At a time of recession, the affordable housing programme was very much welcomed by the construction industry.