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Under agenda item 3, we will take evidence from the Minister for Housing and Welfare on a range of housing issues. I welcome the minister, Margaret Burgess; Kay Barton, who is deputy director of the housing supply division of the Scottish Government; Linda Leslie, who is team leader in the Scottish Government’s housing strategy team; and Steven White, who is head of the Scottish Government’s housing options and services unit.
Yes. Thank you, convener. I will make some comments about the housing bill that we will introduce later in the year.
You mentioned the main policy aims of the forthcoming bill, but I noticed that you did not say anything about modernising the licensing of mobile homes and park homes, which we discussed before the summer recess. Is that going to be in the bill or not?
It will be in the bill. We intend to improve the registering of licensed site owners and to put a time limit on the length of site registration, which currently runs for ever. We intend that to be part of the housing bill.
Do members have questions on the general aspects of the bill, or shall we wait and see?
I shall reserve judgment.
I noticed that, in the affordable housing supply programme, which was announced on 8 July, the City of Edinburgh Council’s allocation had increased to £88 million. Can you clarify how much is currently allocated to the three-year affordable housing supply budget in total? Is the £44 million in increased subsidy additional money?
The total affordable housing supply budget is just under £950 million. The additional £44 million that was announced is new money to the affordable housing supply budget and it came from a variety of sources. Some was from the £20 million that the Cabinet Secretary for Finance, Employment and Sustainable Growth announced from consequentials, some was an unallocated sum and there was some underspend in the regeneration in housing portfolio and other portfolios. That is where the £44 million came from, and it was added to the affordable housing supply budget, so that money is new to affordable housing.
Was the additional support per unit—roughly £16,000 per home—introduced because banks were failing to lend, or because housing associations were not using all their reserves? What was the reason for increasing that subsidy by £16,000?
As you may be aware, I set up a short-term working group of major stakeholders to look into the issue, which had been raised on a number of occasions. The reasons for increasing that subsidy were that banks were not lending to social landlords and that financing for social landlords had been repriced, and the welfare reforms are also having an impact on social landlords.
I want to be absolutely clear about where the £44 million came from. Is it new money, is a portion of it new money, or is it—as I understood—underspend and unallocated funds?
I will ask Kay Barton to come in on this, but what I tried to say to Gordon MacDonald was that the £20 million that John Swinney announced in May was consequentials money and new money for the Scottish Government. There was also an unallocated sum. Would I be right to say that it was £7 million?
There was £10.8 million that was unallocated from earlier in the year. It had been announced for housing, but not specifically for the affordable housing supply programme.
The rest was a £5.9 million underspend from other portfolios.
Outwith housing?
It was outwith housing, then it came to housing. So, £44 million was added to the affordable housing supply programme.
Will that be split over the three years or is the intention to use that money in one year?
The money has been allocated in two ways—£24 million in 2013-14 and £20 million in 2014-15.
What is the projected number of affordable houses that you intend to build with the £950 million in the affordable housing budget?
We have said clearly that we have a target of building 30,000 affordable houses by the end of this Government’s term. The £44 million is not for building additional houses; it is to help to ensure that the target is met with the housing associations and landlords who told us that they would be unable to meet the target with the subsidy of £40,000. We increased the subsidy to ensure that we can meet our target.
So the £44 million is to be used only for the housing associations.
No. It is for affordable housing and will be distributed through the resource planning assumptions to local authorities, as all of the affordable housing supply budget is.
There is a forecast for the number of houses that you will build. Are you on track at the moment? How many houses have been started?
We are on track to meet our target for houses. Kay Barton has a chart with the figures on that.
In 2011-12, which was the first of the five years, we built 6,882 new affordable homes, and in 2012-13 the figure was 6,009. In the first two years, we achieved more than 6,000 per annum.
What impact do you think the increase in the subsidy will have? How many additional homes will be built because of that?
I repeat what I said on that. The increase in the subsidy was not specifically to increase the number of houses being built but to ensure that the target could be met and that housing associations and local authorities could continue to build. Because of the welfare reforms and the bank lending situation, they were struggling to be able to meet our targets with a £40,000 subsidy. For that reason, we increased it. Had we increased it but not given the additional money, we would have had a higher subsidy but fewer houses.
Is there a plan to increase the subsidy further?
There are no plans at present to increase the subsidy further. There have been no requests for us to do that. We listened carefully to our stakeholders and we considered a range of subsidies between £10,000 and £16,000. It was clear that a subsidy of £10,000 would have been only a short-term solution and anything in between would have been short term, too. We took the bold decision to make it £16,000, which was the highest figure that the group came up with.
Okay. Thank you.
How many of the houses will be built by councils? Do you have any idea of their distribution throughout the country? In some parts of the country, including my area of Aberdeen, there is huge pressure on the housing supply. How is the money allocated across the country?
The money is allocated to local authorities under the formula that we have agreed with the Convention of Scottish Local Authorities. Each authority determines its own local housing strategy and the housing demand and need in its area and it then works with partners, whether it be housing associations or whatever, to determine where the houses will go, what size they will be and whether they will be built in partnership with housing associations or developers or by the local authority itself. After all, council houses will not be built in areas where, for example, there is stock transfer.
I want to briefly explore the figures that have been highlighted in the past few minutes. You appear to be saying that progress against targets was not below trajectory before you added the additional grant and that, when the additional grant is added, progress against targets will not be above trajectory. In that case, what is the extra £16,000 per house for?
What I was saying is that, although we met our targets in the previous two years, our stakeholders—social landlords and developers—told us that it was going to be difficult to continue to do that given the difficulties that they were facing with the welfare reforms and bank lending, and that they were going to be struggling to maintain the level of house building. That is why we increased the subsidy.
So the additional subsidy was designed to achieve targets in coming years.
Yes, and to maintain the level of house building.
Thank you for clarifying that. I also want to ask about the Government’s priorities within the targets. In housing debates, the Government often compares the number of council houses that are being built with the number that were built in the past, but it seems to ignore the fact that, in recent years, many social houses have been built not by councils but by housing associations. Is the Government in its structure and logic intending to prioritise council houses rather than housing association houses?
That is not the Government’s position. We want two thirds of our affordable housing supply to be in the social rented sector, but it is not up to us to determine whether those houses should be council houses or housing association houses. That brings me back to my comment to the convener that this is all about local authorities determining what is appropriate and right for their areas. It is not about the Government saying whether the houses should be council or housing association houses.
So housing associations will be able to benefit from Government policy and support.
They are benefiting from both and will continue to do so.
Indeed.
The group is about to be reconvened to consider and discuss the other proposals, which were mainly about the flexibility of subsidy in properties that might require more than the subsidy and the possibility of building properties below the subsidy level. With such flexibility, we can take all such issues into account. Other issues will also be considered, such as the timing of payments to landlords and housing associations. We had already made some improvements in that respect prior to the group’s creation, but we intend to take forward its recommendations in full.
With regard to the convener’s comments about the regional distribution of housing investment, will the working group take into account the fact that financial capacity might vary in different parts of Scotland?
The flexibility relates to where it is more expensive to build a house, such as in rural areas, where the subsidy is already higher in any case. The working group will look at flexibility in hard-to-build areas when it is reconvened.
So we will avoid the scenario in which, by subsidising the construction of social housing where it is cheapest to build, we end up with the unfortunate consequence of building houses in areas where there are not the same employment prospects as there are in other parts of the country where it is more expensive to build.
The allocation goes to local authorities and they determine what is right for their areas; they do not determine what is right for a different local authority area. I am not sure whether I am picking you up right.
I am concerned that the Government’s geographical priorities may be different from the priorities of the economy. Are you offering a reassurance that that is not the case?
What I am saying is that it is not the Government that determines where houses are built. Local authorities have the overall strategic view on where houses go in their area. Government finances are distributed to local authorities under an agreed formula, and they determine the number and types of houses and where they are built, whether they are housing association houses or other affordable housing.
The figures show that house building completions by the private sector have fallen continuously in the past nine years. What measures is the Scottish Government taking to help the sector?
I will say a couple of things in response to that. First, I do not want to downplay in any way the fact that the house building sector and the construction industry face challenges, but it is significant that, in terms of house building per head of population, Scotland is outperforming the rest of the United Kingdom. It is important to recognise that our social housing building in particular outperforms that of every other country in these islands.
The £120 million fund was announced in May. How will the scheme operate? When will the full details of the programme be announced?
We have been working on the scheme for some time. Bearing it in mind that the UK Government announced the scheme without any consultation with the Scottish Government or any indication of how it could operate in Scotland given the different systems that we have, we are fairly close to having the scheme in place. An announcement will be made as soon as possible. We are aware of the urgency to get the scheme up and running. We have been working hard with Homes for Scotland and the Council of Mortgage Lenders to ensure that the scheme will work within our legal and housing systems. We already have 25 builders who are willing to participate in the scheme.
Will it run on a similar basis to the scheme in England or will there need to be drastic changes from how it operates down south?
There will be differences. Kay Barton will give the details.
It will be as similar as we can make it to the English scheme because that is what the house building industry has told us will be most helpful for it. It will also help the lenders if the two schemes are similar because they will have to make only minimal changes to their systems to accommodate the buyers who will come in through the programme.
I have a brief question about the shared equity scheme, which you touched on in your answer to Mark Griffin. Can you give me a bit more information on the uptake of the scheme? What work is the Government doing to promote it? I understand that there was also a shared ownership scheme. Can you give me some information on that? Is it still actively being used and, if not, what has happened to it?
We could write to you with details of the take-up of our previous and current shared equity schemes, which are a mixture of open-market shared equity schemes—when someone buys an existing house or flat on the open market and the Government takes a stake—and the schemes for new homes that are run with housing associations and developers. We could give the committee a breakdown of the take-up over the past few years.
Okay. I would appreciate some further information on that.
In the past, the committee and Audit Scotland have raised issues to do with the reporting of the housing budget, the transparency of in-year revisions and additions, and outcomes from the spend. What will the Scottish Government do to improve the reporting of information relating to its housing budget?
We have produced detailed outturn reports since 2008 but, as you mentioned, the reports do not currently take into account in-year revisions. We are looking at doing that in an effort to be more transparent and helpful, and to make things easier for people.
As well as reporting the in-year revisions, will you report on the outcomes that are achieved as a result of those revisions?
Absolutely. Completions are part of what we currently report.
Mary Fee has questions on the private rented sector.
The minister will be aware that there is now a greater reliance on the private rented sector, and I am pleased that the Government has produced a strategy for that sector. Will you give me a bit more information on how that strategy will be developed, what you would like it to do and what input the sector has had?
The private rented sector has had considerable input to the development of the strategy. We worked closely with the sector and other stakeholders to produce it. As you will be aware, we have already taken action in regard to the tenant information pack and the tenancy deposit scheme.
You mentioned the regulation of letting agents. How do you envisage that working?
As the housing bill comes forward, we will look at that and come back to the committee on the issue. I certainly envisage looking at accreditation, licensing and a whole range of things to ensure that the service that people get from letting agents is consistent across the country. People need to know what to expect and what to do if they have any issues.
Will there be anything in the regulations about security of tenure and long-term leases, as well as protection for rent levels?
We are looking at security of tenure. The private rented sector strategy group, which was originally set up to look at the whole private rented sector, is being reconvened to look at tenure. The issue was not consulted on at the outset of the bill process and it will not necessarily be included in the bill. We are, however, looking at the issue in more detail and we will legislate on it if necessary. It is still to be discussed and consulted on.
Finally, I want to ask about the tenant deposit scheme. Have all private landlords now lodged the deposits in the appropriate places? I know that only 50 per cent of landlords had lodged deposits by May. Have all deposits now been lodged? Will there be further regulation to ensure that landlords do that?
Landlords have a legal obligation to lodge deposits—that is clear. The scheme is relatively new, but we constantly review it and, if further regulation is required, we will consider that. The issue is covered in the tenant information pack. Tenants are to be told that landlords must lodge their deposits with one of the schemes. We encourage that.
I do not, but we can certainly supply them.
I would appreciate it if you could get me the latest figures.
If no one has anything else to ask on the private rented sector, I will move on.
Housing is absolutely crucial to the health and social care agenda. We are working closely with other departments to look at that link. The joint improvement group is also looking at it. We have also asked the local commissioning partnerships to produce a housing contribution statement within their commissioning plans. We will be monitoring and reviewing that situation.
Are some councils better at that than others? You make it clear that it is up to the local authorities to decide their housing priorities, although the Government provides the money. Do you have any leverage with local authorities to ensure that they build houses that are future-proofed in terms of not just the health and social care agenda, but the climate change agenda?
We ask local authorities to look at our sustainable housing strategy, as they must meet some of the targets in that. The future-proofing of houses is up to local authorities but, when they put their local housing strategies together, they must take into account the needs of older people in their communities. For local authorities and housing providers, future-proofing is a preventative measure, because doing it now saves them having to do it in the future. That is now recognised and we are happy to promote it in our discussions with local authorities. Builders are conscious of it, too, and have come up with innovative ideas on how to do it, including how to address the costs.
How is the adaptations working group’s report being taken forward by the Scottish Government in conjunction with local authorities and housing associations?
We agreed the recommendations of the adaptations working group, which were published in December last year. Having read the report in detail, we agreed the recommendations, particularly those on adaptations being person centred, tenure blind and coming from one single pot of money. We have recently invited people to join a new group to take that forward. I think that we wrote to them recently.
It was last week.
It was last week. The previous group existed to make the recommendations, and we have now written to people asking them to join the group to take those recommendations forward.
Do we have any way of measuring how a house being properly adapted saves people having to move into residential care or more sheltered housing?
Fairly robust evidence on that has been provided by one of the special needs housing associations. We and local authorities recognise that, if adaptations are right and take into account the person’s needs, that prevents people from having to move on and saves money in the long run.
I was interested in what you said about the recognition of housing’s role and its importance in addressing the wider integration agenda. Do you agree that that investment is more cost effective for Government than unplanned emergency admissions to hospital and that it delivers better outcomes for older people?
We all, including Government, have agreed that the preventative approach is the way forward and produces better outcomes. We want to make it absolutely clear that housing features in the health and social care agenda. We all recognise that good-quality housing that suits people’s needs and is adapted to their requirements prevents hospital admissions. It also prevents people from having to move and perhaps go into residential care.
On addressing the demographic challenge to which the convener referred, can you provide the committee with specific details on the level of specialist provision that is being made available from the affordable housing budget and, specifically, the current affordable housing supply programme?
I am not sure whether we have those figures in that detail, because the money for the affordable housing supply programme goes to local authorities and they determine what they need. Last year, just under 600 houses were built for elderly people, and those were part funded by the Scottish Government.
That was the figure for 2012-13. We will check whether we have other years’ figures and will let the committee know.
That is helpful. As well as providing useful figures on the number of homes, would it be possible to provide a figure on the proportion of the overall housing budget that is allocated to the specialist needs of older people and disabled people? I feed in that request and I am sure that the officials will do their best to fulfil it.
We can consider whether that is possible. I do not know whether we have that figure.
Thank you.
We move on to homelessness.
Some really encouraging figures have recently been published regarding a significant fall in homelessness applications to local authorities. I think that there was a 13 per cent drop from 2011-12 to 2012-13. I understand that you attribute that to the housing options approach and the prevention strategies that are being adopted at local level. However, in some circles, people are saying that the approach is perhaps being too robustly applied and that some people who ought to register as homeless are being discouraged from doing so. How do you respond to that charge?
There is anecdotal evidence from some organisations that that is the case, but we have been provided with no evidence and have no evidence to say that it is. Nobody should be prevented from making a homelessness application, even if the local authority is working with them preventively on other solutions. The options approach is an holistic approach that considers the individual and all their needs. It is preventive and is also often about getting at the situation before homelessness occurs. To be clear, nobody should be prevented from making a homelessness application. It is the right of people to do so. If any evidence comes to me that people have been prevented from making an application, we will consider that seriously.
I presume that the group was set up to implement the housing options approach throughout the country. Is it monitoring the practice of the approach and feeding back information to you?
I attend that group. I feel strongly about homelessness and reducing the number of people who are homeless in our country. The issue therefore has a high priority, through the group. We are examining every aspect of homelessness. We should not forget where the homelessness legislation in Scotland sits with regard to Europe. It is groundbreaking and it is well respected among other countries, which are looking at us and our legislation. I am keen to ensure that that continues. We have recently developed a monitoring tool for all local authorities to ensure that there is absolute clarity and uniformity in how they present their homelessness statistics to the Scottish Government, and that will start to operate from 1 April 2014. It will be evidence based and robust.
That relates to a question that I was going to ask about temporary accommodation. I understand that its use is decreasing in the country overall, but that it is increasing in some areas of the country, despite the fact that homelessness applications are reducing. Do you have any feel for or understanding of what is going on in that regard? What can we do about it?
Its use is increasing in some areas, as you rightly say, which I think is because more people are being assessed as being eligible for permanent accommodation, given our 2012 commitment. We are looking at that.
So we are talking about a work in progress—it is a direction of travel.
We will constantly be looking at temporary accommodation, and it is the current priority of the 2012 group. I call it the 2012 group, although I know that it has a new name—it escapes me at the moment.
Clearly, the welfare reform agenda is likely to have a significant impact on the homelessness agenda, particularly given the impact of the bedroom tax and issues such as that. Perhaps that is not clear. Can you tell us your view? What kind of feedback are you getting on the impact of the welfare reform agenda? How is it affecting homelessness in Scotland?
I do not want to use the word “perception” but, at the moment, we are of course concerned about the impact of welfare reform on homelessness. It is too early yet to know whether it has had an impact. The homelessness figures are still coming down, and we want to maintain that reduction. We have to be aware that there could be an impact not just from the bedroom tax, which is one particular aspect of welfare reform, but from the wider welfare reform measures that are coming but have not yet been implemented by the UK Government. There are other measures that cause me concern with regard to their impact on homelessness. We will monitor those closely to try to prevent their effects before they are implemented. There is no direct evidence yet of an impact on homelessness because of the bedroom tax or welfare reform. It is early days for that.
You are still talking through what you can do to mitigate the impact, if an impact emerges.
The Scottish Government has already put in place several measures to mitigate the impact of welfare reform. We continue to consider measures for lessening the burden on vulnerable people and families in particular. We have not given up on that—it will continue. We will also continue to raise the matter with the UK Government at every opportunity. There are real issues with the impact of welfare reform on devolved matters in Scotland, such as housing. Housing is devolved to Scotland, but a lot of the finance in housing comes from housing benefit. There is a mismatch between the two, and we are seeing how our policies are being undermined. We will continue to take up the issue with the UK Government. We are always considering ways to mitigate the impact of welfare reform on the people of Scotland.
I have a question about young people and homelessness. The minister is aware that there is no one particular reason why people become homeless, nor is there one solution. However, there are some stark and particular circumstances around young people becoming homeless. I am thinking specifically of young care leavers. Does the Government intend to do any specific pieces of work that are aimed at young care leavers to prevent them from becoming homeless or to give them additional support?
The Government supports a number of measures for young care leavers. Under the Children and Young People (Scotland) Bill, local authorities will have a duty to provide care to people up to the age of 25, which includes helping them into accommodation. There is no doubt—nobody would argue about this anywhere—that if someone is supported into accommodation and while they are in that accommodation, that prevents the homeless revolving door cycle. That is very much in the mind of the Scottish Government and in my mind.
That is a positive note to end on—unless anybody has any other questions.