Housing
The next item of business is a debate on motion S3M-3427, in the name of Mary Mulligan, on housing.
If it is not too presumptuous, I shall start by congratulating Alex Neil on his appointment later today as communities minister. I hope that the Cabinet Secretary for Health and Wellbeing will not be offended if I say that I was disappointed to learn that Mr Neil will not open the debate on behalf of the Government today. I am sure that the new minister will bring a fresh approach to the huge challenges that housing is facing. I am also sure that if he listens to the many people who have a great deal of experience in housing issues—especially tenants and owners—he will realise that there are actions that the Government can take and I assure him that he will have the support of Labour members.
Unfortunately, the new minister comes to housing at a time of crisis. Those are not my words but the view expressed by the Scottish Federation of Housing Associations in its submission to the Local Government and Communities Committee yesterday. It is a view that the Scottish Government appears to share, as it has not sought to amend our motion.
One of the many ways in which we can witness the crisis is by looking at the number of houses that are being built. The Scottish National Party Government has pledged to build 35,000 houses a year, but in the first six months of last year just over 11,000 houses were built—and let us remember that that is before the full force of the credit crunch has hit. There has been a fall of 1,600 houses from the previous year. Even worse, included in that fall is a fall of 600 houses in the social rented sector. That is something that this Government is responsible for.
Before we hear the Government criticise the previous Scottish Executive for building only six council houses in the previous session, as the First Minister said recently, let us get some facts on the record. During the first two sessions of the Parliament, the actual number of homes for rent through housing associations was more than 30,000, and the 432 houses built by councils since the election in 2007 were planned prior to the election and were possible only because of the changes in housing finance that the Labour-led Scottish Executive introduced.
The number of houses that the Scottish Government is completing is falling. What will the Government do about it? One way in which the Scottish Government could reverse the fall would be by properly investing in housing associations. Housing associations have an excellent record on building new housing and renovating old stock, but the Government put that at risk by changing the housing association grant formula.
To be fair, I accept that the Scottish Government has taken action to try to get better value for the public pound, but the principle was wrong and the timing was absolutely wrong. I acknowledge that the cabinet secretary tried yesterday to reverse the damage—I suggest to the new minister that the cabinet secretary may be stealing a little of his thunder—but what she did was too little, too late. When ministers realised the damage that was being done, they should have reversed the changes and not just been satisfied with a half-hearted move.
Lenders were reluctant to lend under the new housing association grant formula, untested and riskier as it was. Only time will tell whether they will be more willing to lend after the limited change. It may be too late for some housing associations, which may already have agreed their development plans and rent levels for next year.
Having made one mistake, the cabinet secretary should not make another. I know that the proposals on the lead developer model are still out for consultation, but the measure is proving very unpopular. The cabinet secretary may do well to drop the proposal now. Johann Lamont will say more on the issue, but I want to say that I have no problem with housing associations working together—there are good examples of that across Scotland—but the competition that the proposal could introduce will not benefit housing associations or those in need of housing.
Yesterday at the Local Government and Communities Committee, members heard how progress to reach the 2012 homelessness target is stalling. Again, that is before the full effect of the credit crunch has set in. All the witnesses told the committee that increasing the supply of housing is essential. They also said that preventing homelessness is important.
Labour has welcomed the Scottish Government's recent announcements on extensions to the mortgage to rent scheme, and although we might be a little more sceptical about mortgage to shared equity we accept that it is yet another option for people in difficulty.
The cabinet secretary could be doing more. Why will she not follow the UK Government example for people who are facing court action? Last year, £10 million helped 160 households threatened with repossession, and the Scottish Government has said that there will be £15 million this year. That can perhaps help 200 or 300 households, but when the number of households that are facing repossession is rising towards 1,000 a month, is it really enough?
I will listen to what the Conservatives say about their amendment, but at this stage I am not sure that we can support it.
I acknowledge that the Scottish Government has brought forward £120 million—I welcome that—but we are very concerned about how slow it was to get the money out and working. So far, £35 million has been allocated, but only £10.5 million is actually to build homes. I understand that buying land at this time might mean a good deal, but additional funding will be needed to make the £12.8 million worth while—by actually building houses.
Serious doubts have been expressed about the £11.5 million for stock already built. We have yet to see any evidence that that was a good deal. It certainly does not do anything for the construction industry or unemployed builders.
Today, the cabinet secretary has an opportunity to show that she understands the challenges that face housing and that she has plans to tackle them. The number of repossessions is rising; the number of houses being built, in the public sector and in the private sector, is falling; and measures to tackle homelessness are stalling. I say to the cabinet secretary that it is now time for action.
I move,
That the Parliament notes the growing crisis in Scottish housing with rising numbers of repossessions, the continuing challenge of homelessness and the falling number of houses being built; calls on the Scottish Government to ensure the urgent and effective implementation of the accelerated spending programme, introduce a realistic housing association grant formula and negotiate with the housing association movement a range of flexible models of procurement, and further calls on the Scottish Government to examine, as a matter of urgency, alternative means of expediting the provision of land and infrastructure and the regeneration of communities.
I, too, congratulate Alex Neil on his new position. I look forward to debating with him in the future.
The Scottish Conservatives welcome today's debate. We have been consistent in that we have opposed the SNP Government's decision to sanction a new generation of council houses. We continue to believe that what funding is available to build new social housing for rent in Scotland should go to our housing associations. Housing associations have demonstrated that they have the expertise and experience to create good new housing in sustainable mixed communities. Their record often stands in sharp contrast to that of councils. That is surely backed up by the recent second-stage stock transfer from the Glasgow Housing Association to smaller associations, which was voted for almost to a man and woman.
The SNP Government may be playing to its left-wing supporters by talking about taking over the mantle of John Wheatley, but I point out that, under the Conservative Government of Harold Macmillan, we built more council houses than almost anyone. However, those were different times; we do not now believe that that would be in the interest of people in Scotland who are waiting for a good-quality social home to rent. The people in former council houses in Glasgow have demonstrated by their votes that they prefer local housing associations.
Just for the record, in the past 25 years, the only year when more than 6,000 homes for rent were built by social landlords was 1995, under a Conservative Government.
I have listened to the concerns of housing associations about the negative impact that changes to the housing association grant are having on their ability to provide affordable homes. Indeed, on behalf of housing associations in the Highlands and Islands, I corresponded with the former minister repeatedly. It seems, judging by the cabinet secretary's announcements yesterday, that ministers have gone some way towards addressing some of the worries that exist—albeit at a very late stage for many housing associations, when many have already made financial decisions for the coming year, and for a temporary period only. I will be interested in the reaction of housing associations.
Our concern was to ensure that any changes in the HAG must result in more houses being built, not fewer, as seems to be the case. Ministers have yet to present a convincing case as to how housing associations will be able to find the estimated extra £5,000 or £6,000 private loan per unit—which they will still need even after yesterday's announcement—when the availability and costs of borrowing are more restricted and more expensive than when the changes were introduced.
I note the SFHA's concern that Scottish Government thinking is wrong to blame the housing associations for being inefficient developers and for rising HAG levels over the past five years when, in fact, housing associations, just like private developers, have had to deal with sharply rising land prices and higher construction costs. We always strive for efficiency and we welcome the void assumption being reduced from 2 per cent to 1 per cent, as we all want as few houses as possible to be empty, but we also understand that housing associations have to compete with the private sector for available land. Ministers need to work as closely as possible with the housing association sector to deliver the affordable housing units that we all want to see.
The housing association sector stands ready to help the Government deliver its housing targets, but it needs the appropriate support to do that. The briefing that I received from Construction Skills Scotland was extremely useful. I am glad that it is undertaking a detailed analysis of the house-building sector's skills and training requirements as well as planning reform.
As our amendment makes clear, we believe that any debate about the future of our social housing in Scotland must also consider stock transfer. David McLetchie will say more about that later in the debate. As I noted in December, the very high percentage of tenants in all five areas of Glasgow who voted in favour of second-stage transfer—83.8 per cent was the lowest figure and 95.2 per cent the highest—demonstrates the genuine public support that exists for locally accountable housing associations that are rooted in our communities. The local authorities that have gone through the stock transfer process are reaping the benefits while those that have not are generally seeing only minimal investment in their council housing stock.
At the time, the Minister for Communities and Sport welcomed the result of the second-stage transfer in Glasgow. Will the new minister and the cabinet secretary follow the logic and allow tenants from across Scotland to vote for first-stage transfer with all the benefit that comes from it? It is surely a no-brainer financially to see housing debt wiped out by the Treasury, and at a time of pressure on public expenditure—which the Cabinet Secretary for Finance and Sustainable Growth spoke about yesterday—most people in Scotland would expect their Government to pursue that with every effort.
I move amendment S3M-3427.1, to insert at end:
"; welcomes the second-stage stock transfer to local housing associations in Glasgow; notes that housing stock transfer in Scotland would achieve £2 billion of debt write-off from HM Treasury, and therefore urges the Scottish Government to engage proactively with the 26 local authorities yet to transfer their stock with a view to effecting stock transfers to community-based housing associations and facilitating further investment in affordable housing in Scotland."
I thank Stewart Maxwell for his contribution over the past two years. Many of the achievements that I will talk about today are, in no small measure, down to his hard work and commitment. Subject to Parliament's approval later today, I am very much looking forward to working with Alex Neil who, I am sure, will carry on that good work and create plenty of thunder of his own.
We will support Labour's motion today because, thanks to Gordon Brown's mishandling of the economy, the number of repossessions is rising. In response, the Scottish Government is providing more help and advice and a £35 million home owners support fund.
Will the cabinet secretary take an intervention?
Not just now.
Homelessness is still a challenge, which is why we are working so hard towards the 2012 target. The construction industry needs support, which is why we have accelerated £120 million of housing investment to this year and next year—twice as much, pro rata, as England. This year's allocation is fully committed and will support the building of more than 1,700 new homes throughout Scotland.
Can the cabinet secretary tell us what proportion of the money that the Government has brought forward is being spent on supporting development rather than on land banking or on buying off-the-shelf housing that already exists?
Most people who know anything about housing recognise and agree that the sensible way to use the money is to support new development, to give housing associations the opportunity to purchase land and to help the housing industry by buying, where appropriate, off-the-shelf units. That is what we were asked to support and what we are supporting. For all those reasons, we will accept the Labour motion.
Nevertheless, the motion is lacking: it lacks contrition and, to be frank, it lacks an apology. Labour's record on affordable housing was simply woeful. In the words of Iain Gray, Labour passed
"the best homelessness legislation in the world"—
which it did—
"but … didn't build the housing to make it work."
How true. Labour promised to build 7,000 social houses for rent a year. However, during its 10 years in government, it completed on average fewer than half that number. I know that Labour members do not like to hear this, but in the last four years of the previous Administration, Labour managed to build a grand total of six council houses. So, we will take no lessons from Labour on housing.
Will the cabinet secretary give way?
I will not, just now.
I contrast that record with the record of the current Government. Yes—the total number of houses being built is falling due to the downturn in the private market. However, in the first year of this SNP Government, we started more public sector houses—including more social houses for rent—than had been started at any time since the early 1990s. Since we took office, more than 430 council houses have been started and our £25 million fund will deliver up to 1,000 more.
Mary Mulligan referred to the number of completions in 2007-08: the number of completions in that year was driven by the number of houses that Labour had started in the previous year. The number of new-build completions is projected to be higher this year than it was last year and we have, in addition, made clear our intention to end the right to buy for new-build social housing—an intention which has been shamefully opposed by Labour. All that is backed by funding that has risen by 19 per cent over the previous spending review and which will, in the next financial year, reach a record spend on affordable housing.
Of course, it is incumbent on us not just to spend more but to get more houses for our money, which is why we revised the HAG assumptions last year. We were right to do so. Nevertheless, the world has changed and we have listened, which is why yesterday we announced new assumptions that have been welcomed by the SFHA and described as a "considered response". That demonstrates that we are a listening Government. We will continue to listen during the consultation on investment reform.
We recognise that we live in difficult times, but we are committed to working with all partners to get through them. This Government will not only oversee the best homelessness legislation in the world, but will build the houses to make it work.
I await the vote of Parliament before I extend congratulations to whomever might be the new housing minister. Nevertheless, I say in passing that we are looking forward to housing debates being conducted on a calmer, more measured and more considered basis. I think that I speak for the whole Parliament in saying that we look forward to that—although not with much hope.
This is an extraordinarily serious issue. As we all know, economic conditions have changed dramatically. Often, when economic circumstances change, we make decisions to pass off commitments or shuffle them to one side because they are further down the road and we think that that is the easier response. I am glad that, in the debate so far, there is an understanding that the homelessness target for 2012 must never be set aside simply because we face particularly difficult economic circumstances. We must not allow the people who are most affected by downturns in economic circumstances to become the victims of policy decisions that would make their position much worse.
The situation is extraordinarily complicated. Mary Mulligan was right to point to the very real dangers and difficulties that are emerging, particularly for people who are facing repossession. The mortgage to rent schemes and the variations on the mortgage to equity scheme that came about as a result of the recent report, which suggested improvements in those schemes, are a help, although like Mary Mulligan, I remain slightly sceptical about the suggestion that the existing legal protections will be sufficient to deal with the absolutely overwhelming increase in the number of repossessions.
The task that the motion sets us is to ensure that there is still a flow of houses becoming available on the market. I will make one observation on that, which I have made before. In reacting sensibly and responsibly to the current crisis, we should acknowledge that we are not trying to boost the availability of homes in order to recreate the market whose bubble has just burst. Rather, we are trying to build a market that recognises that some aspects of the previous model were much misguided. To that end, I hope that the emphasis in the private sector and among housing associations will be far more on building houses to rent than on building houses to buy. There is an urgent need to build a substantial rental sector in Scotland, taking into account the fact that the circumstances in the housing market will be very much changed for a long time.
I do not agree entirely with what Johann Lamont said in her intervention. The use of the £100 million to buy up land banks or houses is not necessarily a bad thing, provided that that money circulates round the housing market. It makes sense to enable those who are in the business to continue to develop housing, but it does not make sense to pay someone outside the market.
I was making a serious point about the balance of spending. One reason why the money has been brought forward is to sustain the construction industry, but that particular spend will not do that. The building industry is concerned about that.
I accept that proposition. The Government, in difficult and constrained times, has seriously to consider the amount of money that is available. I am pleased that the HAG formula has been adjusted, although Mary Mulligan is right to point to the continuing difficulties with it. There must be closer discussion between the Scottish Government, which is funding HAG, and the banking sector. If that money comes from the public purse, the Government and the banking sector must discuss how that sector can be assisted back into the market to facilitate housing associations' tackling of the issue.
I note that Jamie McGrigor's amendment is not entirely dissimilar to the amendment that he moved on 8 May last year and which, notwithstanding the reservations that Labour has expressed this morning, Labour supported. If we are going to try to inject more money into the system and ensure that there is a greater flow of cash—which seems to be the nub of the matter—the policy instruments that we are discussing appear to be fit for purpose. However, if we cannot facilitate that flow of funding, we will all be extremely disappointed. We will, therefore, support Jamie McGrigor's amendment.
Finally, I make one plea to the cabinet secretary. I know that the point that she makes sounds terribly clever, but I find it childish and churlish that she distinguishes a house that is built with public money by a housing association from a house that is built with public money that goes to a local council. To go on and on about only building six houses is churlish. The member is a far better cabinet secretary than that, and the remark is not worthy of her—I wish that she would drop it.
We move to the open debate. I can give members about five minutes each.
If Parliament is disposed to sanction Alex Neil's appointment as minister, a gain for the ministerial team will be a loss for "Newsnight"—I am sure that the BBC is taking steps to plug the gap. One of the things that has unfortunately marked the housing debate over the past 18 months to two years has been a mixture of stubbornness and stupidity. Alex Neil is not known for stupidity, and I hope that he will bring his calming influence to change the stubborn attitude that has developed among his colleagues in the Administration.
The "Firm Foundations: The Future of Housing in Scotland" document would have been better titled "Building on Quicksand". It has managed to alienate and alarm the housing movement throughout Scotland, including people who are politically well disposed towards the SNP. They do not have a good word to say about the current housing policy.
I could make a number of political points, but the problem that faces the housing sector in Scotland is too important for that. We need some sort of movement and solution, and I would rather that we were able to persuade the Administration to admit that it has been wrong and that it will change. I welcome the slight shift that has been announced this week, but it is too little too late: the damage has been and is being done. The increase that was announced comes too late for many schemes—housing associations will have to revise projects to see whether they stack up.
The work is time consuming, and the unhelpful delays will further undermine the construction industry at a time when fast and decisive action could make a real difference in providing not only houses, but jobs throughout Scotland. Housing associations will still have funding problems even under the revised proposals. There will be a rise in private finance contributions, rents could go up by as much as 20 per cent in all the new-build developments and—worryingly—standards could fall. The maintenance of those developments could be affected simply because the money will have to be used to service increased loan-repayment charges.
Lenders are not offering favourable rates, if they are offering to lend money at all. Many are worried about the future viability of some housing associations because of what is going on. Why should housing associations use their own reserves to plug financial gaps? The Administration has ignored warnings from the housing movement. Reserves are built up over time from the rents of existing tenants, and are designated mainly for future maintenance of properties. Why should those reserves be used to subsidise new housing for future tenants?
Does Hugh Henry agree that the reserves estimates in previous HAG assumptions were wrong and that it was the input of new numbers that led to the revised HAG assumptions last year?
Mr Doris might want to reflect on the matter and to talk to housing associations about how what happened previously pertains to what is happening now. Housing associations would appeal to return to the levels that were previously available. The Administration needs to revert to the HAG assumptions that were used in the previous financial year to kick-start affordable house building programmes in Scotland. It needs to use the expertise of housing associations, which I think members agree have a proven track record throughout Scotland.
I appeal to ministers to abandon the idea of a lead developer. That model has failed in England, and there is no evidence in the document that any cost savings will be made or that the model has worked elsewhere. Lead developers are just another level of bureaucracy that could cost more money to set up than would be generated in savings. The problem with the rhetoric over the past 18 months or so has been, as Ross Finnie suggested, that it has created an artificial division between council housing and houses that are provided and built by housing associations. I worry that that rhetoric has sought to downplay—if not to undermine—the role of housing associations.
Housing associations in Scotland have proved themselves: it is time for the Government to undo the damage, ditch the dogma and admit that it has got it wrong.
I thank Stewart Maxwell for the work that he did during his term as housing minister, especially the work that he has undertaken with the Glasgow Housing Association, which has been very important to the people of Glasgow. I look forward to working with the new minister if the motion is passed tonight, as I am sure it will be.
The Government has taken steps to increase substantially the position and the provision of social and affordable housing, for which I applaud it. Other members—the cabinet secretary in particular—have mentioned that under this Government more houses have been built, although I will not repeat all the figures. The right to buy that Labour extended to housing associations has been abolished by this Government. Labour applauds those housing associations, and yet it extended the right to buy to include them.
It is a great pity that Mary Mulligan and the Labour Party cannot acknowledge the fact that this Government has, in less than two short years, continued to put in more money and to listen to housing associations. Housing is an important issue, so it is a shame that the Labour Party is, once again, using it as a political football. We should all unite to rid this country of homelessness. It is about time the Labour Party acknowledged that and listened to what the Government has been doing.
Will the member take an intervention?
I do not have much time, but I will let Hugh Henry in shortly.
The Labour motion mentions the urgent need to examine
"the provision of land and … the regeneration of communities",
which is an important point. If those issues are to be tackled, joined-up thinking involving local councils, central Government and housing associations will be necessary. The new planning legislation that is being considered should help in that regard. I sincerely hope that the forthcoming Commonwealth games will ensure that the much-needed regeneration of the east end of Glasgow goes ahead.
Sandra White's criticism of the Labour Party is misplaced because we are only reflecting the fears and concerns of housing associations across Scotland. Those worries are being expressed not by us but by the SNP's partners in the housing movement in Scotland. The SNP needs to listen to them.
I have met them and listened to them. I am critical of the Labour Party because it denies that, over the past two years, the SNP Government has done the work that it failed to do over the previous eight years. Labour members should bow their heads in shame, because Labour did nothing on housing. Only the SNP has spoken to the housing associations and addressed the issues that they have raised. Credit should be given where credit is due—that is my point.
Jamie McGrigor's amendment deals with second-stage stock transfer. I mentioned Stewart Maxwell's work with the GHA, which has been extremely important to the people of Glasgow. I have some facts and figures for Jamie McGrigor, to add to those that the cabinet secretary gave. Second-stage transfer is important and will be welcomed in Glasgow, provided that it is supported by the tenants and the housing associations can get a good deal from the GHA. We have learned lessons; people should look at what is happening with second-stage transfer in Glasgow.
I agree with Hugh Henry in one respect—we should reconsider the lead developer model. It might be a bit tricky having one main developer, particularly when it comes to second-stage transfer, so that needs to be examined.
I welcome the increase in HAG funds, which I am sure will help with second-stage transfer in Glasgow, but I caution against their use by the GHA to increase the price of each unit and I seek an assurance that that will not happen.
The road to second-stage transfer has not been an easy one and I understand that some housing associations are still waiting for valuations from the GHA, even though the cut-off point is 30 March. That is worrying, and I ask for ministerial clarification on that. Second-stage transfer in Glasgow has at times been difficult, so I applaud Stewart Maxwell for meeting the GHA to try to iron out the problems. Second-stage transfer to small housing associations is welcome and represents a benefit to the community. I hope that the lessons that we have learned in Glasgow will be learned by other parts of the country that proceed with second-stage transfer.
I welcome the debate. Housing is an extremely important issue. We must get it right, not just for homeless people, but for people who live in houses that are deemed to be unfit for habitation. I look forward to my questions being answered. Perhaps the Minister for Transport, Infrastructure and Climate Change can tell us about regeneration and land banking, which Johann Lamont mentioned. We must get best value and we must ensure that the people of Scotland have decent housing. Second-stage transfer must go ahead, but only if the tenants want it, and not at just any price.
As an MSP for the Highlands and Islands, I cannot but be aware of the challenges that are faced in providing affordable housing in rural areas. There are no economies of scale; indeed, we would not want building on a large scale, as that would have a disproportionate effect on a small community.
However, it is vital that people have access to affordable housing. House prices on the open market are often well beyond the means of people in my area, who tend to have to have several jobs, some of which are seasonal and few of which provide the stable income that is required to enable them to borrow privately. We must set against that the fact that the area is sought after by folk who want to buy second homes or who want to move in from other areas. As such people tend to have comparatively large amounts of capital, they often outbid locals.
People should be enabled to live in the communities that they were brought up in and should not be forced out. Only yesterday, there was a story in The Press and Journal about a young family from Portmahomack whose private rented lease is coming to an end. Although they cannot afford to buy in the village, they cannot, based solely on their local connections, be guaranteed one of the nine new Albyn Housing Society Ltd houses that are being built there. They face uprooting their family, moving their children out of school and moving elsewhere. However, we should not become so parochial that we allow no one to move into rural areas. More affordable housing provides the answer to the problem.
From speaking to housing associations in my area, I know that the announcement that was made ahead of the debate—that the housing association grant will be increased by an average of 6 per cent will be welcomed—but that increase will not affect their ability to deliver small developments. The cost of building is much higher in rural areas because of the lack of economies of scale and because of the higher costs of land and of providing water, electricity and other services to developments. That means that rural housing associations will continue to need to apply for additional HAG money.
Such additional funding normally comes with conditions. The Government imposes a higher rent level on properties that receive it. I have mentioned the work patterns in smaller communities, which mean that those higher rents cannot be passed on to tenants because they are unaffordable, with the result that the whole funding equation falls apart because the assumed rent is higher than the actual rent. As it is the actual rent that is borrowed against, there will always be a funding gap between the HAG level and the mortgage on the property. For example, on a house that costs about £125,000 to build, the rental income is £2,800 per annum. The funding gap for that property alone is £7,500. Small rural housing associations cannot afford to finance such gaps, so they cannot afford to build.
If the Government is to allow small rural housing associations to build, it must stop imposing unaffordable rent levels in such communities. Housing associations know their tenants and they know what rent level is affordable in their area, so they are the right people to set a fair rent that takes into account local circumstances. Many of the housing associations in my area tell me that they cannot build under the present regime, which needs to change. Although HAG rises are welcome, the real problem is the imposition of rent levels. That is without taking into account the effect of the credit crunch, which means that a mortgage that was available under the previous rent assumptions might no longer be available. Something needs to be done.
As regards lead developers, I can understand why people might want them, given some of the benefits that they could bring but, unfortunately, we are not working with the right model. I ask the minister to consider the model that has been adopted by the Highland Housing Alliance, which brings all the benefits of a lead developer without causing competition among housing associations. The HHA brings together housing associations, councils and private developers to ensure that development is unblocked and that more housing is developed at efficient costing levels.
As a representative of remote and rural communities, the most important issue for me is that the Government should stop imposing rent assumptions in cases in which additional HAG is provided. That practice must change if much-needed housing is to be provided in such communities. The impact on the public purse would be small, but the impact on the number of affordable houses that could be built in rural areas would be huge.
I begin by paying tribute to Stewart Maxwell for all his hard work and commitment as housing minister, for which I thank him. In addition, I congratulate Alex Neil on the new post to which he will, we anticipate, be appointed this afternoon.
I genuinely welcome the Labour motion. Repossessions are a growing and significant problem, and I am glad that the motion acknowledges that. I also welcome the tone of the language that the motion uses in relation to the housing association grant, even if it has not been reflected in Labour members' speeches—although Rhoda Grant's speech was excellent. If time allows, I will return to HAG later.
I hope that we can build a consensus on repossessions. Members will know that I have talked regularly about my massive concerns about private companies offering sell and rent back products. In doing so, I have echoed the serious concerns of the Office of Fair Trading, which has called on the UK Government to regulate the practice via the Financial Services Authority. The Office of Fair Trading has evidence that companies that offer such products significantly undervalue the houses of struggling home owners at the very time when they must count every penny and are becoming increasingly resigned to having to sell their homes in order to tackle mounting debt. The last thing they need is property cowboys robbing them blind by giving them far too little cash for the property that they are being forced to sell.
Of course, the one benefit that families that are forced to sell their homes are supposed to derive is that they can stay in the family property. However, we have seen that that is not always the case, because rent level and security of tenure guarantees are often undermined and people are lied to or misled. The OFT found that that has happened. We hope that the UK Government will very soon regulate the shocking black market in repossessions, which results in pain, heartache and injustice for victims. I received a "wait and see" reply when I wrote to the UK Government on the matter. It is genuinely still considering regulation, which I expect will be introduced shortly. The Scottish Government is also pressing for regulation.
I am a member of the Local Government and Communities Committee. At the committee's meeting this week, the SFHA and Shelter agreed with me that regulation is needed and that such repossessions put pressure on councils and housing associations throughout Scotland in respect of their meeting housing need and homelessness targets for 2012. The Labour committee members also agreed that movement is needed. I think that genuine cross-party support exists in the chamber to work with the UK Government on that.
Given that nobody could see any benefits of the scheme in question, does the member agree with the suggestion that my colleague Patricia Ferguson made which was that to simply abolish it might be more productive?
I thank Mary Mulligan for her constructive intervention. I listened with interest to what was said during the meeting, and my immediate reaction was that the scheme should be abolished. On that level, I agree with Patricia Ferguson, but I am not sure how someone's ability to sell their house to a third party can be abolished without infringing their individual rights. However, I am interested in the UK Government's proposals. All options are on the table. Let us hope that we get the matter resolved very soon.
I have met the SFHA and housing associations throughout Scotland to discuss HAG levels—as other members have—and it is clear to me that there were two core elements to the call for HAG level adjustments. Our discussions on that were useful, as I think the Government's discussions with those bodies were. My understanding is that the Government has been clear about ensuring that the assumptions that have been used to calculate HAG levels are accurate. The formula was not an issue; the aim was to ensure that the figures in it were accurate. In working out subsidies, under the old HAG assumptions the figures for rent levels, uncollected rent, inflation levels, housing association reserves and so on were not accurate, which led to the revisions for 2008-09. I am delighted that we have a Scottish Government that has moved quickly and confidently to revise HAG levels for 2009-10 in the light of changed circumstances. If the numbers change, the subsidy will change. That gets to the crux of the matter. It is up to members to move forward with cross-party consensus to support local authorities and the housing association movement.
I am not sure how much time I have left. The Presiding Officer has indicated that I can keep on talking, so I will do so. It is not often that she indicates that I can do that.
I want to mention one or two other things that I am proud of. I am proud of the end of the right to buy new-build properties. That is a core issue. There has been a lot of heat around the issue of six new council houses being built under the previous Administration. We can argue about the numbers as much as we like, but how can local authorities be incentivised to build new council houses if those houses will simply be bought under the right to buy? That approach must end, and we must incentivise local authorities to get back in the market to build affordable social housing. I am delighted that 1,000 or so such houses will come online as a result of a £25 million investment. I hope that they will do so soon.
I thank the Presiding Officer for her patience, and am glad to have taken part in the debate.
I welcome the opportunity to speak in this important debate, although we are necessarily constrained by time. I hope that whoever is appointed as the new housing minister after 5 o'clock this evening will reflect on having a full debate in the chamber on the important subject of housing.
It is important for members to discuss housing and to end the Government's obsession with assertion over action. If ever there was an example of government by alibi, it was Nicola Sturgeon's speech. She talked about what everybody else's responsibilities are and wilfully refused to reflect on her own policy, "Firm Foundations". I hope that she listened to what Ross Finnie said about the six council houses, particularly as her Government has emphasised the continuing and critical role of housing associations in its policy.
The power of the threat of a Labour debate on housing is remarkable: there has been half a U-turn on a key policy on HAG spending. Given the absolute certainty about previous HAG assumptions, perhaps the minister could clarify what consultation of the housing sector took place on the new assumptions. I fear that they may have been plucked out of the air in a panic. Two Mondays ago, the then housing minister, Stewart Maxwell—to whom I pay tribute; I have enjoyed debating with him—stated that the grant formula was costing housing associations an extra £10,000 per house, but that that could be tackled by using reserves or borrowing. Four days later, the Cabinet Secretary for Health and Wellbeing announced that the issue was being revisited. Poor Mr Maxwell. He gallantly defended the Scottish National Party's policy while both the policy's demise and his own were being plotted.
The Parliament has already agreed that the Scottish Government's housing policy is seriously flawed. Despite that, the Scottish Government persists with it. Cuts in HAG levels will lead to rent increases or increased borrowing at the worst possible time, and the introduction of a lead developer model can be seen as undermining entirely the critical role of community-based housing associations. Are we to assume that the cabinet secretary, in supporting our motion and agreeing that there should be flexibility on procurement, is finally burying the lead developer role? Will she confirm that, given the GHA's role as a transitional body, its aspiration to be a lead developer will simply not be allowed to be fulfilled?
The problem with the "Firm Foundations" approach is that if the Scottish Government persists with it, it will seriously undermine the role of community-controlled housing associations. The approach is predicated on an assumption that housing associations have been feather-bedded in some ways. Reserves are talked about, but the reality is that they are used to plan not two years ahead, but five, 10, 15 and 20 years in advance. The very thing that sustained housing associations at a time when council houses were falling into disrepair because they had been starved of investment is now being used inappropriately.
There is talk of economies of scale. We know the pressures of diseconomies of scale. A big organisation spends without thinking. We need to reassert the importance of housing associations in community regeneration and in sustaining local communities. The Scottish Government must listen to those who tell it that such an approach will strengthen the role of the national housing associations at the expense of local housing associations.
The cabinet secretary must back off. In particular, in summing up, she should address a key point about the implications of the lead developer role that has been raised with me. The lead developer proposals would not allow charities—which the vast majority of the housing associations are—to undertake such a role. Things would need to be changed to allow subsidiaries to do that. Subsidiaries will not be registered social landlords, so they will not be able to receive HAG, which will then go to end users. The reason for the proposal in the first place—to give all the resources to a one-stop shop of regional experts—would be undermined, European procurement rules would apply to the procurement of the lead developer and things would have to be opened up to the private sector. Surely that is not the Government's intention.
We should apply the Swinney test to that policy, bearing it in mind that destroying community-controlled housing associations was not in the SNP's manifesto. The Parliament has voted against the policy and times have changed. The worrying conclusion that we have to draw is that the reason why we shall not get the cabinet secretary to admit that she is wrong—and she is—and the reason why she will not dump the policy along with the local income tax, is that it does not require parliamentary endorsement. The Scottish Government will persist with the policy not because it is right, but because it can. That is the approach of the pre-1999 Scottish Office and its administrative devolution for ministers, rather than that of a Scottish Government that is accountable to Parliament and, through it, to all those who are highly exercised and concerned about the current approach. We all agree that we are in challenging, fast-changing and difficult times, but the test of Government is whether it makes the situation better or worse. This Scottish Government currently fails that test in relation to housing and the sustainability of social rented housing at community level. It is time for the cabinet secretary to recognise that graciously, think again, dump the "Firm Foundations" document and policy—which the Parliament has opposed—and work with housing associations, MSPs and those in the housing sector to develop a housing policy that will make a difference to our communities.
I put on record my personal thanks to Stewart Maxwell, whom I have shadowed. We had a cordial relationship—the relationship between Government and Opposition spokesmen is one of the better things that we do here—and I am grateful for that.
I look forward to the probable, or possibly probable, appointment of Alex Neil as Stewart Maxwell's successor this afternoon. Despite the fact that he brings what I might call a whiff of brimstone to the job, it will not stop me from engaging with him warmly at all times, although possibly while wearing asbestos gloves.
Mary Mulligan referred to a time of crisis. I state the bindingly obvious: when we go through our post bags and do our constituency work, it is evident that the number of problems that people encounter when seeking houses, new builds or becoming homeless is increasing all the time. I link that with a point that Rhoda Grant made. In my constituency, Portmahomack is an area of housing pressure, as is Dornoch where a lot of wealthy people live. Getting affordable housing there is not easy and the same applies to the west coast of my constituency and some of the remotest locations.
Ross Finnie's point about the redundancy of the six houses argument is well made because we must look at housing in the round. Jamie McGrigor made a pro-housing association speech, but I suggest that he went a little too far in castigating Scotland's local authorities. When I think back to my time as a member of a housing authority, I remain proud of what we achieved on the ground in providing homes to people who needed them in the Highlands. Years on, those houses are still recognised as being well built and are very much sought after. Sadly, they were also the subject of the first right-to-buy applications. I say to Jamie McGrigor that there is a role for local government and housing associations to work together on land use. Rhoda Grant referred to Albyn Housing Society in the Highlands, which has been successful in working with Highland Council to develop land in a way that the council could not do itself.
My colleague Ross Finnie rightly reminded us that we absolutely must not take our eye off the homelessness target because to miss it would be to let down those people for whom we must work hardest. Ross Finnie also said something to which we will both probably return: there is a place for socially responsible private-sector landlords. There is also a role for local government and, although it is not appropriate for today's debate, if we think back to the powers of district councils in the 1980s and early 1990s, we will remember that there was engagement with the private sector that was productive in housing people.
I refer to Rhoda Grant again and compliment her on her speech. Nicola Sturgeon referred to the £120 million accelerated housing intervention fund. Referring again to my constituency, I hope that the money will be spread throughout Scotland and reach some of its remotest parts.
It would be wrong of me not to refer to the crisis that we are all aware is hitting the building trade. Every such business is feeling the pinch. New housing developments that do not go ahead, or that slow down, hit those businesses hard. I have had many representations from businesses in my constituency in the very far north of Scotland that are feeling the pinch. If that trend is allowed to continue, what will happen? We will see businesses folding, which will make it harder still to return to house building when times are better.
I say to the new minister, who might or might not be Mr Alex Neil, that if he will engage with the problems of the building trade, which are fundamentally wrapped up in building houses, that will be useful and constructive work. I conclude my remarks there, only five seconds over my time.
I welcome today's debate on housing and the measured terms in which the Labour motion is framed. I also welcome Nicola Sturgeon's boast that the SNP Government is at last matching the housing achievements of the Conservative Government in the 1990s—a Government that, as we know, did more to make housing affordable for the working people of this country than any other in the history of our nation.
The Government is right to say that we need to maximise value for the taxpayer contribution, by way of the housing association grant, to the building of new social housing for rent. However, it would have been foolish to ignore the concerns raised by housing associations throughout Scotland that the proposed changes would have a negative impact on their development plans. We should welcome Nicola Sturgeon's announcement yesterday of the increase in HAG levels. Despite all that is said about new council house building, the fact is that the Government's plans in that area are so modest and tokenistic that housing associations will be responsible for building 90 per cent of the new social housing in Scotland for the foreseeable future. They need to be backed in that task.
I acknowledge that the use of lead developers is designed to maximise value for the taxpayer and the prospective tenant, but I wonder whether a lead developer model is necessarily the best model for every area. Creating a local development monopoly strikes me as anticompetitive, a situation which, in the long term, normally drives prices up, not down, by comparison with a more open market. The Government should not be dogmatic in that respect.
Our amendment focuses once again on housing stock transfer and we make no apologies for it. I welcome the support expressed by Ross Finnie, but I am somewhat surprised that Mary Mulligan was more equivocal, given that we are doing no more than stating the housing policy of the previous Scottish Executive.
It seems extraordinary to us on this side of the chamber that, at a time when it is constantly warning of the impact of forthcoming cuts to Scotland's block grant from the Treasury, the SNP Government should wilfully turn a blind eye to the £2 billion that the Treasury has put on the table to wipe out the accumulated housing debt of local authorities, in return for them transferring their stock to community-based associations. It is all very well for SNP ministers to welcome the partial implementation of second-stage transfer from Glasgow Housing Association to community-based housing associations, but that does not go far enough. It does not disguise the fact that up until 2007 the SNP was hostile to the whole concept of stock transfer and, since coming into Government, it has been pathetically passive. Time and again we have invited ministers to take a more proactive role with councils to facilitate transfers, achieve write-off and leverage in additional investment but, time and again, SNP ministers have refused to act, notwithstanding the need for affordable housing, which is particularly acute in Edinburgh.
Because of financial constraints, building a few council houses here and there is not the answer, whereas stock transfer could unlock a significant investment that would make a real difference. I hope that the new housing minister, who could never be described as pathetically passive while sitting on the back benches, will bring some of his brio and dynamism to the brief and look again at stock transfer to see whether we can bring about real change. If Parliament agrees to our amendment, it will be the green light that the new minister needs to take a fresh look at the matter. That is why members should support it.
My participation in the debate in no way adumbrates a change in my responsibilities, but it allows me to talk about land provision and infrastructure, to which the last part of the motion refers. In the five minutes that I have, I will try to deal with as many members' points as possible with brio and dynamism.
First, I will make a general point. The first law of epigenetics is that the more highly optimised an organism is for one environment, the more adversely it is affected by a change in that environment. The point is that taking a diverse approach has an intrinsic value. That is precisely why we disagree with and do not sign up to Jamie McGrigor's comment that there is no place for council housing. Of course there is a place for council housing, as part of the diverse housing provision that is necessary to meet our needs.
It is worth noting that the nature of housing tenure is not necessarily linked to how nations work. Twenty years ago, among the countries that now form the EU 27, the country with the highest proportion of rented accommodation was Germany and the country with the highest proportion of owner-occupied property was Bulgaria. Therefore, even with political systems and political leadership, diversity is significant.
Money has—of course—been a thread that has run through much of the debate. Yes—money is difficult to obtain for the Government, for housing associations and for businesses. That is precisely why it is important that the Government has put money on the table to help with cash flow for companies that have unsold stock, for example. This year, we have put in place £35 million of accelerated funding. Of that, £10.235 million is for construction, to deliver 716 new homes, and £12.72 million is for land purchase. When the former Minister for Communities and Sport and I visited the Irish Government a couple of weeks ago, we found that land purchase has been the key to that Government's ability to engage in many housing developments and in economic development. Land banks give Governments something to bring to the table. The accelerated funding also includes £12.11 million to secure 204 unsold new properties. In total, 1,700 new homes will be supported. More fundamental is the fact that cash will flow back into the system, which will make a real difference.
Ross Finnie chided us somewhat for talking about the low number of council houses that the previous Administration built, so I will say nothing about that. However, by excluding council houses from the way forward and saying that his party will support the Tory amendment, he makes a grosser error than he thinks we made by focusing on the low number of houses that were built. I urge him to think more carefully.
Rhoda Grant made a good point about difficulties in rural areas because of incomers outbidding locals. We recognise those difficulties, which are the reason why diversity and more affordable housing are needed.
Lead developers have been a thread in the debate. The consultation is still in progress. Rhoda Grant said that she had suggestions—let us hear them and we will of course consider them.
In a pretty standard speech, Johann Lamont agreed with many of the Government's arguments yet managed to express her points in a way that suggested otherwise. I will ignore that. However, she made one good point that is worth exploring—that about the tension between economies and diseconomies of scale. Of course room exists for big and efficient national organisations. However, we also need organisations that respond to local needs and are connected to local people. We must achieve the right balance, because that tension exists.
Will the minister give way?
I am sorry—I am almost out of time.
The Government is—undoubtedly—responsible and reliable. We are resilient in the face of change and responsive to change. I am happy to support everything that my colleague Nicola Sturgeon said and, of course, we will support the Labour Party at 5 o'clock.
The debate has been good. It is clear that most members agree with the Labour group and housing organisations that housing is in crisis and that the Scottish Government needs to up its game.
First, I will address a couple of linked issues that I did not have time to mention in my opening speech. Labour's motion calls on the Government to respond to the recommendation of the housing supply task force, which reported last Friday, that it should
"examine, as a matter of urgency, alternative means of expediting the provision of land and infrastructure and the regeneration of communities."
I acknowledge the positive contribution that all members of the task force made. The task force's report considers the role of public sector land and asks the Government to consider new models for financing infrastructure. That is particularly relevant when private housing developments, whose developers contributed to infrastructure under section 75 agreements, have been put on hold.
Both those issues could be addressed through a nationally co-ordinated approach along the lines of that of the UK Homes and Communities Agency. Perhaps the Scottish Government's abolition of Communities Scotland was premature.
I will respond to points that were made in the debate. The Conservatives' amendment refers to stock transfer. We welcome second-stage stock transfer in Glasgow to local housing associations, but the amendment is too prescriptive. Not all local authorities carry significant housing debt, so why would they all want to transfer their housing stock? Labour sees the benefits of stock transfer, but its use must be decided case by case and local tenants must have the final say.
The amendment is not prescriptive or dogmatic; its purpose is simply to ask the Government to engage more proactively with local authorities. Ultimately, deciding whether to proceed is a matter for each tenant area.
I am not sure whether that is what the amendment says.
Mr McGrigor did not make many friends with his speech when, as Jamie Stone said, he criticised council housing. Many councils struggled to maintain their stock when the Tory Government squeezed and restricted their funding. Labour will support all those who seek to build affordable rented housing, whether they are housing associations or councils, where that is appropriate.
Will the member give way?
I am sorry; I do not have time.
Many members, including Rhoda Grant, Hugh Henry and Ross Finnie, mentioned the problems with operating the housing association grant formula. I am sure that the cabinet secretary listened to members' concerns and that she will recognise that she needs to go further than her announcement yesterday.
Members around the chamber opposed lead developer status—my colleague Johann Lamont ably underlined that. Perhaps the cabinet secretary could do another U-turn and reverse her position.
As I said, the debate was intended to highlight the housing crisis and urge the Scottish Government to do something about it. Outside the Parliament today, we are being lobbied by the Scottish Trades Union Congress, which is supported by the Scottish Tenants Organisation and other housing concerns. They are not standing in the snow for the fun of it; they do so because they have concerns about the state of housing. Their concerns are that housing need is not being met and that jobs are being lost in the construction industry. Like members, they want the Scottish Government to take action.
I understand that £120 million has been brought forward. However, people are concerned that the Government has been slow to spend that money, does not really know what to do with it and is sticking to house building targets that were set before the money was brought forward and definitely before the present credit difficulties. Finally, as the money is only accelerated and not additional, what will happen in 2010-11?
The Parliament is becoming accustomed to SNP broken promises, such as the dropping of the £2,000 grant for first-time buyers and yesterday's momentous announcement that the Scottish Government has abandoned its plans for a local income tax. I sincerely hope that the cabinet secretary will fight her corner in the Cabinet and will find new money for house building. Perhaps the new minister will help her to find that courage and to keep the promises on house building.