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Chamber and committees

Meeting of the Parliament [Draft]

Meeting date: Thursday, June 20, 2024


Housing Emergency

The Deputy Presiding Officer (Liam McArthur)

The next item of business is a statement by Paul McLennan on the Scottish Government’s response to Scotland’s housing emergency. The minister will take questions at the end of his statement, so there should be no interventions or interruptions.


The Minister for Housing (Paul McLennan)

It is just over a month since we came together to debate the declaration of a housing emergency. Since then, I have continued my extensive engagement with colleagues across the Parliament, our partners in local authorities and our stakeholders. I have met housing conveners to discuss local and common challenges that have contributed to longer turnaround times for empty council properties. I am pleased that the actions that arose from those meetings are now being taken forward.

My meetings with partners and stakeholders have reaffirmed that, although we have the right long-term strategies in place, we must prioritise actions in those plans and work together to deliver them. Our collective priorities must be to increase housing supply and to tackle homelessness. Today, I am setting out our plan of action.

Context is incredibly important, so I will say a few words about the context in which we are operating. The United Kingdom Government’s decision not to provide additional capital funding has meant that our block grant for capital is now expected to have reduced in real terms by 8.7 per cent by 2027-28, which will be a cumulative loss of more than £1.3 billion. There has been a 62 per cent overall reduction in financial transactions capital funding this year compared with 2022-23. Those financial constraints have required us to make very difficult choices, and views from colleagues on which capital projects could be paused to free up resources for housing continue to be very welcome. On top of that, the Home Office’s streamlined asylum process continues to push people into destitution, and Brexit and wider market conditions have had a devastating impact on the housing sector.

Nevertheless, we have made huge investments to mitigate the harmful effects of UK Government policies such as the bedroom tax and the benefit cap. We have already spent £1.2 billion over the past 14 years—almost £134 million in this year alone—and we will press the incoming UK Government to recognise the impact of the reduced budget. We will urge it to take action on mortgage availability and lending, to commit to ensuring that local housing allowance rates meet at least the 30th percentile of local rents, and to abolish policies such as the bedroom tax and the benefit cap.

Housing has a bearing on all four of the First Minister’s priorities. That fact is reflected in our proposal for a new national outcome on housing. The plan that I am setting out today is organised under three strategic pillars. First, we need more high-quality permanent homes. Secondly, we need the right homes in the right places. Thirdly, we need everyone to have a permanent home.

I will outline the actions to be taken under each pillar. To get more high-quality permanent homes, we are investing almost £600 million in the affordable housing supply programme in 2024-25. That includes up to £40 million for acquisitions that will be announced this year and a further £40 million next year. That additional £80 million builds on the success of the national acquisition programme, which in 2023-24 delivered almost 1,500 affordable homes, supported by our investment of more than £83 million.

Our open market shared equity scheme will reopen today to new applications. That scheme will deliver hundreds of homes for priority groups.

We must ensure that the resources that we have are deployed to optimal effect. With input from stakeholders, we are concluding our review of the affordable housing supply programme, with a focus on deliverability towards our target of 110,000 homes by 2032. We are working on the development of specific options to attract private investment through the housing investment task force, which had a meeting on Tuesday this week.

We also recognise the crucial role of a well-resourced planning system. The new national planning improvement champion will monitor performance, look at trends, share good practice and identify efficiencies. We received positive feedback on our proposals in the recent “Investing in Planning” consultation, and we will now work at pace to support planning services through an increase in resources and skills development.

We continue to engage with stakeholders to ensure that the rent control measures in the Housing (Scotland) Bill will contribute to our vision of a private rented sector that works for tenants and responsible landlords and is attractive to investors.

In relation to our second pillar—having the right homes in the right places—we will work closely with our local authority partners to ensure that the strategic housing investment plans reflect the full range of housing priorities. I have probably now met between 30 and 32 local authorities, and I discuss those plans regularly with them. The priorities include providing high-quality homes where they are required for larger families, wheelchair users and older people, as well as high-quality general needs housing.

We are building on the delivery of more than 10,000 affordable homes in rural and island communities between April 2016 and March 2023 through the implementation of our rural and islands housing action plan, which includes substantial mainstream investment for affordable homes, complemented by the rural and islands housing funds and the rural affordable homes for key workers fund.

I now want to talk about providing permanent homes for everyone. We know that the number of children in temporary accommodation is too high—addressing that is a priority for me and the Scottish Government—and that lengthy stays in temporary accommodation are not good for the wellbeing of families. The £80 million of funding that I have mentioned will enable social landlords to secure larger family houses where needed, helping households with children to find a permanent home, which should help to reduce the numbers and the average time spent in temporary accommodation.

We are consulting the Convention of Scottish Local Authorities this week to determine how best to allocate additional support to local authorities with the greatest temporary accommodation challenges. Discussions will continue at pace over the next weeks. We will also support the work of local authorities and registered social landlords to better understand what they need to do to reduce turnaround times for empty homes and voids. We have heard the sector’s concerns about delays in reconnecting energy supplies and will back efforts to address that problem.

We remain committed to transforming and modernising the homelessness system. We are widening responsibility for homelessness prevention and investing in rapid rehousing transition plans for the sixth consecutive year.

I will touch on the asks of the housing and homelessness sectors. I really value stakeholder engagement, which will continue as part of the work. I have already said that a collaborative approach to tackling the housing emergency is critical. In my discussions with local authorities, registered social landlords and other partners, we have explored what more needs to be done locally.

I am calling on partners to maximise value for money in affordable housing delivery. I understand that local policies must reflect local need, but I ask that those policies be reviewed to ensure that local authorities can respond to the scale of the challenge that we face. I ask that local authorities provide accurate data when making referrals to housing associations to improve households’ experiences.

I know that positive work is happening. At a recent meeting on turnaround times for empty and void properties, I heard about good practice in parts of Scotland in turning homes around quickly. I want those measures to be deployed across the country.

I ask local authorities that have declared housing emergencies to share the actions that they are taking in response, which will help us to identify where there is consensus on what is needed and to facilitate the sharing of good practice. I have met the City of Edinburgh Council and Fife Council in that regard, and I compliment them for the work that they have done in declaring a housing emergency, because their work allows us to stand beside them and work with them very closely.

We need all parts of Scotland’s housing market to work together to tackle the housing crisis. I believe that the private rented sector plays a vital role in addressing housing need. I will meet the Scottish Association of Landlords to discuss what its role will be in an all-tenure approach. We will build on instances of successful joint working already in place. I urge landlords and other partners to continue to work together to explore what more can be done.

I want to talk a bit about the sequence. I recognise that we cannot achieve everything at once and that we must focus on activity that will reduce harm, particularly that which households with children are experiencing. We have decided to reschedule work on a new tenure-neutral housing standard. Rather than seeking to introduce legislation in 2025, we now intend to publish a public consultation on the matter in 2025.

We have heard concerns from local authorities about the impact of introducing homelessness prevention duties at a time when councils are experiencing other pressures. We will therefore seek views on the implementation of the new duties and will consider taking a phased approach to their introduction.

We are analysing responses to our recent consultation on proposals for a heat in buildings bill and a new net zero standard for social housing. I have been hearing about that from stakeholders for a number of months. That analysis will inform our next steps.

The response that I have set out today shows that the Scottish Government is leading a collective response from the front. We have already seen excellent collaboration across the sector and rapid input from expert stakeholders. I particularly welcome the recent letter that was sent by Shelter and other key stakeholders. I agree with their priority areas and pledge to continue working with those organisations on the points that they make. I hope to meet them shortly to discuss the points that they raised in that letter. Some actions are already under way, and others will be taken forward by the Government. I will be in touch with those organisations and will arrange a meeting very soon.

If we all put our shoulders to the wheel, we will be able to tackle the housing emergency head on. I look forward to working with stakeholders and members from across the chamber as we do so.

The Deputy Presiding Officer

The minister will now take questions on the issues that were raised in his statement. I intend to allow around 20 minutes for questions, after which we will move on to the next item of business. I encourage members who wish to ask a question to press their request-to-speak button if they have not already done so.

Miles Briggs (Lothian) (Con)

I, too, thank the minister for an advance copy of his statement. A month ago, the Scottish Government declared a housing emergency, but what we have heard today does not sound or feel like a response to an emergency. We need to see more from the Government, and the fact that the minister mentioned children only twice in his statement tells us a lot. Every day, 45 children become homeless in Scotland. Under this Scottish National Party Government, 9,860 children are living in temporary accommodation and some have been in such accommodation for years. That is an increase of 138 per cent over the past decade, while the SNP and the Greens have been in power.

The minister mentioned the letter that has been sent to the First Minister and the Deputy First Minister. I agree with the key ask in that letter about children living in temporary accommodation, which is an issue that I have consistently raised in this chamber during this session of Parliament. In the time remaining in this session, we have the opportunity to make a difference in line with the First Minister’s policy of eradicating child poverty, but we need a single-minded focus on reducing the harm that children living in temporary accommodation experience. How many children does the minister expect will be living in temporary accommodation in Scotland by the end of this parliamentary session?

Paul McLennan

I will touch on a number of points in response to that. I said in my statement that the issue of children in temporary accommodation is a top priority for me. As I have mentioned, just last night, I told Shelter that that will be the top priority as we move forward. I also said that I will meet the stakeholders who wrote the letter. I will be happy to meet them individually or as a group; I already meet them regularly.

I have spoken about some of the key things. There is an all-agency approach, and we are working with stakeholders, but we also need collaboration from an incoming United Kingdom Labour Government. In answer to previous questions, I have spoken about the homelessness monitor report from Heriot-Watt University and Crisis, which said that the two biggest issues that are causing the increase in homelessness are the level of local housing allowance and the level of universal credit. As I said in my statement, any incoming Government must look at those two priority issues.

As Mr Briggs knows, I meet the City of Edinburgh Council and other local authorities to focus on that particular point. As I said, we will work particularly closely on that with COSLA, the other groups that are mentioned in the letter and local authorities.

Mark Griffin (Central Scotland) (Lab)

We have just heard that there is a £130 million underspend on capital spending, but the Government has slashed the housing budget. We have a housing bill that will not build a single house, while 45 children are becoming homeless every day. That situation will keep happening, because the Government is not doing anything different, except for cutting the housing budget.

I am not entirely sure why we have had a statement today. No one in this chamber is an expert in the field, but there is a document that has been produced by experts. The Association of Local Authority Housing Officers, the Chartered Institute of Housing, Homes for Scotland, the Joseph Rowntree Foundation, the Scottish Federation of Housing Associations and Shelter have all contributed to a comprehensive set of recommendations to address and remedy the housing emergency in Scotland. I simply ask the minister: which of those recommendations will the Government take forward and which will it not take forward?

Paul McLennan

There are a number of points to make. I do not know whether Mr Griffin was in the chamber earlier when Ivan McKee mentioned in his statement that that £130 million will be carried forward. The total budget was within 0.6 per cent of its target. Having been a councillor for 15 years, I know that, if any council budget came within that level, it would be seen as pretty successful. That money—which is across all parts of the Scottish Government budget, not just across housing—has been carried forward.

There are a number of things to say on the issue. I regularly meet ALACHO, CIH, Homes for Scotland, the Joseph Rowntree Foundation, SFHA and Shelter. We are already working on some of the actions that are in the document. I have offered to meet those organisations to discuss those specific points, but, as I have said, we are already working on many of the actions that they have asked for.

Mr Griffin knows that we meet regularly, and I am happy to discuss updates on those points with him regularly, but we are already working on most of the actions. As I said in my statement, we agree with the actions that the organisations have highlighted. I will meet them very shortly and will take forward those points.

Emma Roddick (Highlands and Islands) (SNP)

As many members will know, the issue of homelessness is very close to my heart. I am grateful to the minister for agreeing to meet me shortly to discuss these issues. However, will he go into more detail now on how policy will be readjusted in order for us to successfully tackle homelessness in Scotland?

Paul McLennan

I have a number of points to make. We have talked about the action plan that the six stakeholders have put together, and I will meet them fairly shortly to discuss that. I have also mentioned acquisitions, with £40 million this year and £40 million next year to tackle that.

In addition, I have mentioned the prioritisation of children in temporary accommodation, and we have already started discussions on that. I met the special interest group and COSLA on Tuesday to discuss that point. COSLA is discussing how it will take that forward itself, and we will continue to discuss that. An additional £2 million in the 2023-24 budget is targeted at the local authorities that are most in need. Miles Briggs will know about the work on that in Edinburgh, for example. The specific local housing emergency action plans are important, because they allow me to focus on what is being done locally and to consider where we can help them.

A number of actions are under way, and we will take forward the points that have been raised in the action plan, too.

Pam Gosal (West Scotland) (Con)

Before I ask my question, I welcome Colin McInnes from Homeless Project Scotland, who is in the Scottish Parliament today. I thank him for all the work that is done by Homeless Project Scotland to help people in need.

Depopulation in rural areas is linked to a lack of affordable housing. However, in response to one of my written questions, the minister admitted that only 21 homes were completed in rural and island communities in the past year through the Scottish Government’s rural and islands housing funds. What action is the Government taking to speed up the development of homes for rural and island communities?

Paul McLennan

I will note a number of things for context. As I mentioned in my statement, we have delivered—this is an important element—more than 10,000 homes over a period to tackle that issue. I went to a rural housing conference a number of months ago to talk about some of those issues. Working with local authorities and community housing development trusts is really important.

We are looking at opportunities in the freeport in the Highlands, and we have been working closely with local authorities, the investment community and the enterprise agencies on the potential for that. This week, a newspaper reported that an estimated 24,000 homes will be needed there; so, as I have said, we are working closely with those bodies.

We are also working closely with Scottish and Southern Electricity Networks to talk about renewables opportunities up and down the coast, many of which are in rural areas. There are opportunities to work with SSEN in that regard.

We have undertaken and will continue to undertake a lot of work. The challenge that is faced is the additional cost due to being in rural areas, so we are working on how we can minimise the cost impact. I am happy to discuss the issue further with Pam Gosal.

Kenneth Gibson (Cunninghame North) (SNP)

The SNP Government has led house building in the UK, completing 40 per cent more affordable and social homes per head of population than in England and 70 per cent more than in Labour-run Wales. However, with the UK Tory Government’s cut of capital funding of £1,300 million over three years, maintaining our UK-leading affordable housing provision will be increasingly difficult. Does the minister expect any step change in available funding from an incoming UK Government? Will he remind the chamber how many council houses the previous Labour Administration built in Scotland over four years?

Paul McLennan

I thank Kenneth Gibson for his question, which highlighted the important context. We are talking here about the Institute for Fiscal Studies projections that £18 billion of fiscal cuts will be required. The IFS has stated that neither the Labour Party nor the Conservative Party is facing up to that incredibly important issue.

Rachel Reeves, who is likely to be the next Chancellor of the Exchequer, has said that Labour will not change the current fiscal rules. I know from speaking to my colleagues in the Welsh Government that they have similar asks in that regard, including for increases in local housing allowance and universal credit.

To come back to Mr Gibson’s question about the number of council houses that were built by the most recent Labour Administration in Scotland, I will need to check this, but I think that the figure was six.

Foysol Choudhury (Lothian) (Lab)

This morning, a coalition of housing organisations that includes the Joseph Rowntree Foundation, the Chartered Institute of Housing and Homes for Scotland put out a statement in which it called on the Scottish Government to take action to cut the number of children in temporary accommodation by 25 per cent before the end of this parliamentary session.

There are 2,910 children in Edinburgh who are stuck in temporary accommodation, and they stay in temporary accommodation for an average of 471 days—the longest period in the country. Will the minister commit to reducing those figures? What concrete action will be taken to get children out of temporary accommodation?

Paul McLennan

I regularly meet the organisations that Foysol Choudhury mentioned—for example, last night, I spoke to Shelter about the organisations’ statement. I indicated to Shelter that, as I said earlier, our focus will be on reducing the number of children in temporary accommodation. That is the main priority for me.

One of the key issues in relation to Edinburgh is how we can maximise the opportunities to tackle the use of temporary accommodation. At one stage, Edinburgh had more than 1,500 void properties. We have worked closely with City of Edinburgh Council, whose local housing emergency action plan was much appreciated. We are working closely with it to tackle the number of voids. Empty homes are another issue on which we are working very closely with City of Edinburgh Council. It has just taken on a second empty homes officer.

There are things that we can do within the current set-up to maximise the opportunities in that area. As I said, we meet City of Edinburgh Council on a regular basis, and I would be happy to meet Mr Choudhury at any time to discuss the specific Edinburgh issues that he raised.

Ben Macpherson (Edinburgh Northern and Leith) (SNP)

I fully appreciate that the Scottish Government’s capital budget has been cut by around 9 per cent, and I note that, this financial year, the Scottish Government has allocated around £600 million of its resources to increasing the provision of affordable housing, but will the minister provide an update on what specific actions the Scottish Government is engaged in to address Edinburgh’s very serious housing emergency, especially given the acute impact that significant population growth is having on the availability of social housing in my constituency and the demand that exists for what is available across the city?

Paul McLennan

Building on the answer that I gave to Mr Choudhury, I regularly meet the City of Edinburgh Council to discuss where it is with its housing emergency action plan. We have talked about void properties, empty homes and maximising the grant funding that it is getting this year. We are also looking at how we might minimise the number of children in temporary accommodation, given the impact that that has.

A number of other issues are important. I regularly meet the Cities Alliance, which includes the City of Edinburgh Council, to see how we can attract investment into the Scottish cities. We work closely with the alliance. I have also requested a meeting with the Edinburgh and south-east Scotland city region, which includes the City of Edinburgh Council. There are probably about seven or eight strategic sites the development of which would provide a large amount of social housing and affordable housing in the next number of years. We are working very closely with the city region to look at opportunities for infrastructure investment that might bring investment into the area.

Another issue is how we use the private rented sector, which, again, I have spoken to the City of Edinburgh Council about. We have also discussed the purpose-built student accommodation sector and the need to understand how we can use that.

There are a number of areas in which we can look at what we are doing at the moment, but I continue to look to the future and to consider what support we can provide.

Maggie Chapman (North East Scotland) (Green)

Currently, almost 100,000 residential homes across Scotland stand empty. Those homes must be rapidly brought back into use. Some councils are leading the way on that, and the minister talked about the work that is under way to share good practice, but it is clear that a lack of funding is holding many of them back.

Does the minister agree that the provision of a match fund to enable local authorities to scale up existing empty homes teams could make a significant difference to that total and that it could bring at least 3,000 homes a year back into use? Will he commit to introducing such a fund as soon as he can?

Paul McLennan

I appreciate the point that Maggie Chapman makes, which is incredibly important. We have talked about the important issue of void properties, which can be tackled in different ways. One of the issues relates to utilities and the shortage of workmen. We are working very closely with councils on that—I met housing conveners to discuss that point.

The empty homes partnership is funded by the Scottish Government and, with £3.2 million, it has developed 9,000 empty homes. As the member knows, some of the issues with empty homes are more complex—for example, they can involve people in care or people overseas. That point has been raised by a number of the groups that have produced the action plan. As I said, we would be happy to engage on that and see what we can do.

Alex Cole-Hamilton

It is disappointing to see just how little is in the minister’s statement on the action that the Government plans to take to tackle the housing crisis that the Parliament rightly declared. There is also very little acknowledgement that the Government’s own actions in slashing the housing budget by a third have contributed to the problems that now exist in the sector.

A shortage of adequate housing can mean all the difference in that health and care workers are unable to live in the communities that need them in order to provide the services that are desperately needed. Will the Government look at Liberal Democrat proposals to build attractive, sustainable housing that is reserved for the key workers whom our communities need?

Paul McLennan

Again, I have a couple of points to make. As Alex Cole-Hamilton may know, I regularly meet Willie Rennie and he has not mentioned that particular issue, but I am happy to meet Alex Cole-Hamilton or Willie Rennie on that point.

In the report from Shelter Scotland and others, there are around 16 actions. We were already working on many of those and discussing them with stakeholders. As I said, a collaborative approach is needed through the stakeholders, the UK Government, the Scottish Government and local councils working together.

I am happy to discuss Mr Cole-Hamilton’s point with him or with Mr Rennie at any stage.

Ruth Maguire (Cunninghame South) (SNP)

Too many families are on waiting lists for affordable housing. The most difficult housing casework that I deal with involves individuals and families who require adapted properties in order to live safe, full lives.

The motion that the Parliament passed noted the role that all levels of government must play in tackling Scotland’s housing emergency and the fact that the current situation follows a decade of austerity across the UK—austerity that, to be frank, the Labour Party manifesto seems reluctant or unwilling to reverse. Will the minister elaborate on the steps that must be taken by the next UK Government to remedy the current difficulties and help us to build what we need to ensure that the housing needs of all Scotland’s citizens are met in full?

Paul McLennan

I will come in a second to the point about the UK Government asks. Ruth Maguire mentioned the need for adapted properties, which is an incredibly important point. One issue is local authorities understanding the need for adapted properties and being proactive rather than reactive. The Scottish Government has reviewed the issues around that and we are working on what we can do to give support, but there is a role for local authorities in that.

I go back to the homelessness monitor, which came through Heriot-Watt University. The two key things that it talked about were restoring LHA to the rate that it should be at and universal credit. That is an independent analysis.

There has been mention of reversing the capital budget cut. The financial transactions part of that was a 62 per cent cut in one year. That did not affect housing, but it impacted health spending and the ability of the Scottish National Investment Bank to operate to its maximum capabilities.

Graham Simpson (Central Scotland) (Con)

The cross-party group on housing recently met five of the councils that have declared a housing emergency. We wrote to the minister with some ideas of things that he could do. Our number 1 ask was that he produce a plan to deal with it. He has not done that today. One of the big asks was that he reverse the 26 per cent cut to the affordable housing supply programme. He has not done that. [Interruption.] I am being heckled by the Cabinet Secretary for Social Justice. The minister has reannounced an extra £80 million, which was first announced in April. That does not close the gap. Does he not accept that that disastrous £200 million cut is having a real impact on addressing homelessness?

Paul McLennan

I will try to remain calm while I answer that question. We are talking about the capital budget cut, which Graham Simpson knows about. We met during the week and discussed it. I have mentioned it—it was a cut of around £1.3 billion, and the biggest impact was on financial transactions. There was a 62 per cent cut in one year—by your Government. Again, your Government had that political choice to make on that particular point.

Through the chair.

Paul McLennan

I apologise, Presiding Officer.

That is the important context for what we are trying to do. The £40 million was not a reannouncement: I spoke about there being £40 million this year and £40 million next year. The £40 million that I discussed in the context of the statement was for working closely with COSLA to tackle the specific issue of homelessness among children.

In reference to the five local authorities, I commended what Edinburgh and Fife, which are Labour-controlled authorities, have done. I will work with any local authority that proposes a detailed action plan on homelessness. I am asking every local authority to do that so that we can work closely with them. We are already working on a number of emergency housing action plans, and we will continue to do so. However, every local authority needs to work with us and provide detail to support such plans.

Michelle Thomson (Falkirk East) (SNP)

There continues to be much discussion of disallowing any rent rises between tenancies. The industry view is that that could limit investment in properties, as any spend would be, in effect, a sunk cost. What assessment has the minister made of that possibility and of its potential impact on meeting the green housing objectives?

Paul McLennan

I would like to pick up on a number of Michelle Thomson’s points, especially about the green housing element and, in particular, on the retrofitting aspect. I was a member of the Local Government, Housing and Planning Committee when it considered that issue, at which point the estimated cost was said to be £33 billion. That was a couple of years ago, so it will probably be higher now. The green heat finance task force is also considering the issue just now.

When I first came into post, one of my priorities was to maximise opportunities for investment in social housing as well as build-to-rent properties at mid-market rent. Only yesterday, I met representatives of Scottish Land & Estates to discuss the work that it is doing to build houses, which could total 1,500 to 2,000 houses in some areas. Since I took responsibility for the Housing (Scotland) Bill, I have met stakeholders to discuss aspects of that, and we are currently reviewing the outcomes. Of course, we will need to get the balance right between protecting our most vulnerable people from rent rises and having the ability to bring investment into Scotland.

That concludes the statement on Scotland’s housing emergency. Before we move on to the next item of business, there will be a brief pause to allow front-bench speakers to change places.