Local Government and Communities Committee

Meeting date: Wednesday, May 16, 2018

Official Report 559KB pdf

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Housing Supply

Under item 2 we will consider progress on housing supply and the “Joint Housing Delivery Plan for Scotland” from 2015 to 2020. The committee will take evidence from Kevin Stewart, the Minister for Local Government and Housing. With the minister are Andrew Mott, head of housing markets, strategy and north programmes in the more homes division; and William Fleming, head of the housing services policy unit; they are both from the Scottish Government. Thank you, gentlemen, for coming along this morning. I invite the minister to make some opening remarks.

Good morning, convener, and thank you for the opportunity to come to the committee to update you on progress and inform your future work plan on housing. I hope you have found the papers that were circulated in advance useful and that they might help to frame our discussion.

Paper 1 explains how the joint housing policy and delivery group is approaching delivery of the joint housing delivery plan, which was published in 2015. The paper explains how the JHPDG has evolved its approach, but also how the outcomes identified in the plan continue to be important in shaping its work. It also includes a forward look for future plenary group meetings.

When I first met the JHPDG in November 2016, I encouraged it to be positive and practical. It has taken up that challenge and that has been reflected through discussions ranging from infrastructure to homelessness, from increasing housing supply to welfare reform, and from disabled people’s housing to value for money. I would like to take this opportunity to note my appreciation for all the hard work and commitment from members of the JHPDG, especially Tom Barclay, our external co-chair. I and my ministerial colleagues value their contribution to helping us to achieve our ambition for everyone in Scotland to have access to a good-quality, warm and affordable home.

Paper 2 picks out some key milestones that we have already met in 2018, and sets out what we anticipate for the rest of 2018 and looking further ahead into 2019. I am pleased with the Government’s progress, and members will be pleased to hear that I will not read you a long list of our achievements right now.

I am, however, not complacent. It has to be said that Scotland’s housing system faces a number of challenges, including an ageing population and the United Kingdom Government’s welfare reforms and approach to Brexit. Delivering on our ambitions to tackle homelessness and child poverty is another challenge, as is ensuring that our fire safety and building standards are always fit for purpose. Of course, we must also mitigate the impact of climate change and adapt to its effects, and that is very much on our agenda. We are already working hard to respond to those challenges, and success will require everyone to play their part.

Convener, I hope that that is helpful context as you consider the committee’s future work plan.

It certainly is. I know that members will want to look at the types of houses that will be built, where they will be built and their affordability. We will come to that, but we will start with the number of houses that are to be built. The commitment is to 50,000 affordable houses and a £3 billion investment during the current parliamentary session. What progress has been made on that?

You are right to point out that we are intent on delivering 50,000 affordable homes, including 35,000 for social rent, during this parliamentary session. That is backed by £3 billion of investment over the piece.

As things stand, we are driving forward with that programme. We have ensured that all local authorities have resource planning assumptions for the next three years to give them the comfort to move forward. More than £756 million is being made available this year for the affordable housing programme.

We are not expecting those 50,000 homes to be split into 10,000 a year. We know that growth will be incremental over the piece. Statistics that were published on 13 March showed that, in the first seven quarters of the programme, which is to December 2017, 11,758 homes had been delivered, equating to almost a quarter, or 24 per cent, of the total number of homes required. That breaks down to 6,874 social completions, 1,464 affordable, mid-market rentals, and 3,420 for low-cost home ownership.

I am not complacent, but I think that that is a strong foundation on which to build, so that we can achieve the target of 50,000 affordable homes.

That is helpful, and I know that members will want to look at those figures more closely. A lot of money is being put in and it is all really welcome. If I have got my numbers right, in this financial year, £568 million is going to local authorities, in 2019-20 it will be £591 million, and in 2020-21 it will be £630 million. Those are fantastic figures.

I apologise for focusing on the uncertainty. Those are good figures and the money will drive us towards that target of 50,000 affordable homes. My local authority really welcomes those figures and is enjoying spending the money in partnership with its housing associations and planning ahead. The three-year resource assumptions are fantastic for planning ahead, but what happens after 2020-21? Local authorities and housing associations are building up capacity and headcount in the system. What certainty can you give for beyond 2020-21?

You are right, convener. This year, £568 million will go directly to local authorities. The budget for the affordable housing supply programme is £756 million this year. In 2019-20, £591 million will go to local authorities and, as you said, that will rise to £630 million. That is £1.79 billion over the piece for local authority resource planning assumptions. It is quite unusual for us to be able to give comfort in terms of three-year budgeting.

On looking beyond 2021, at a recent Chartered Institute of Environmental Health conference, the cabinet secretary said that we will talk to partners across the board. She reiterated the point that we will continue to speak to stakeholders as we develop our plans beyond 2021. Work will begin on all that later this year. We hope to be in a position, with the input of stakeholders, to say by the tail end of next year exactly what our plans are for beyond 2021. However, the key thing in all this is gathering the views of stakeholders and partners, as the cabinet secretary pointed out at that CIEH conference.

That is helpful. I have a final question, then Mr Wightman will explore the matter further.

I see from my notes that the “Affordable Housing Supply Programme Out-turn Report 2016-17” shows that 14 local authorities spent more than their resource planning assumption budgets, 14 spent less and four spent roughly the same. Is that just about slippage in projects, or do we have to look again at how much money local authorities get?

The Government has made it quite plain and I have made it quite clear, as has the First Minister, that if local authorities are unable to spend up to their resource planning assumption figure, then we will move that money to areas that can spend that money. I would hope that all local authorities would put in place plans to ensure that they can spend the amount of money that has been allocated to them. I recognise that it has been difficult for some areas to reach the point of building up the capacity to deliver, but I hope that there will be improvement in that regard. I recognise that there is a bit more difficulty in some areas in terms of some aspects of delivery. I have said to local authorities that they should build slippage into their programmes in case they are one of the authorities that ends up getting more money because there has been the inability to spend elsewhere.

We will continue to monitor all that. I know from the many discussions that I have had with housing conveners that they want to ensure that their local authorities do the very best that they can. We will monitor all that, but I think that it would be fair to say that that situation is improving.

On the target of 50,000 affordable homes, the analysis in the recent Shelter Scotland report “Review of Strategic Investment Plans for Affordable Housing”, suggests that 96 per cent of the new dwellings might be new builds, a further 2 per cent might be acquisitions of one form or another and 2 per cent might involve refurbishment. The statistics from April 2016 to the end of December 2017 show that 62 per cent are new builds and 31 per cent are off-the-shelf acquisitions. So, the figure for new build at the moment is 62 per cent and Shelter is suggesting that 96 per cent will be new build.

What is your view on how many of the 50,000 homes will be newly built properties, given that the Scottish National Party manifesto said that you were going to build at least 50,000?

If I remember rightly, the SNP manifesto said that we would deliver 50,000 affordable homes.

Local authorities have to decide what is best for their areas. I am very pleased that many new houses are being built, but I recognise that in some areas it would be advantageous for the local authorities to buy off-the-shelf properties or buy back properties. If local authorities see that that is the right thing to do, my view is that they have the best knowledge of what is required. When I appeared before the committee previously, I think that it was you, convener who questioned me about giving local authorities the flexibility to buy back properties, and we have that flexibility in place. I am pleased by the report from Shelter, the Scottish Federation of Housing Associations and the Equality and Human Rights Commission in Scotland, because it shows that we are on track to deliver on the 50,000 target. Obviously, the report is a fairly substantial analysis of strategic housing investment plans. I have become a bit anorakish myself in that regard. It is good to see that that analysis is not that much different from our own.

10:00  

The manifesto says clearly that it is about building. I am wondering whether new builds will make up 96 per cent or 62 per cent of the total. What would you like to see? Or are you saying that you are leaving it to local authorities to decide how best to fix that balance?

As I have said, it is up to local authorities, through their local housing strategies and other strategies, to come up with what is best for their area in terms of delivering on the 50,000 affordable homes target.

I do not know those numbers off the top of my head; I would have to look again at the Shelter report and compare it with our own analysis. I will write to the committee about those numbers. The key thing in all this is that it is about local delivery and meeting local need. Local authorities should be doing what is best for the people in their area by expanding the amount of housing that is available for social rent and expanding the amount of affordable housing overall.

I want to explore a couple of areas: housing for older people, and housing for disabled people. I have asked you a number of written questions over the past months. I do not expect you to remember them—

I probably will not remember all of them.

They were on the refreshed housing strategy for older people. First, you told me that it would be published later in the year—that is, last year. Then the publication date became spring of this year. Your latest answer is that the strategy will be published at some point in “this Parliamentary term”. Can you tell us when the refreshed strategy will be published?

If we are talking about the local housing strategy and the guidance for it, work is on-going at this moment and my expectation is that that refresh will be completed by the end of this year.

Our commitments in “A Fairer Scotland for Disabled People” say that we will refresh that strategy. Many members will have seen the report last week from the EHRC on housing for disabled people across the UK. A number of recommendations in that report were applicable to Scotland.

I want to ensure that we get the guidance absolutely right on all of this so that we provide and deliver more homes—and more wheelchair-accessible homes in particular—that meet the needs of folk right across the country.

Beyond that, I do not think that we should necessarily be reliant on the refresh of guidance for strategies alone. A commonsense approach is needed and local authorities need to look at the information and the data that they already have when formulating what is required in their area to meet the needs of disabled people.

Local authorities have the ability to look at their current housing waiting lists, and they can ask housing associations in their area for the same information to see exactly what is required, so that they can get on with the job of delivery.

As I have said to the committee previously, I am unwilling to open up the can of worms that is negotiations on subsidy. I have told local authorities that they can talk to my officials about subsidy rates for specialised housing or for larger housing types so that we can get the go-ahead and ensure delivery in places right across the country.

As things stand, 91 per cent of the housing that we are delivering through the affordable housing programme is for varying needs. Therefore, we are future proofing what we are building. I recognise that there is a way to go, but I do not want to rush things; I want to ensure that we get this right. Beyond reliance on the guidance and the strategy, I want local authorities to take the commonsense approach and see exactly what waiting lists in their areas show and then to make plans to deliver.

I will ask you about housing for the disabled, but my first question was specifically about the refresh of the housing for older people strategy.

I apologise.

Is it clear that that refresh will be published this year?

I will write to the committee to give it a definite answer on when that refresh is due. I am sorry—I picked up wrongly what you said, Mr Simpson. We are doing that piece of work jointly with the Convention of Scottish Local Authorities and, if I remember rightly, there is joint sign-off. I do not want to mislead the committee by giving a date that is not accurate, so I will write and let the committee know when that is due for publication.

Okay. Thanks very much.

I will now ask about housing for disabled people. You mentioned the Equality and Human Rights Commission report that came out last week. It is a UK-wide report, but the EHRC split it into reports on the various countries of the UK. Let us be honest: the report made pretty grim reading across the UK.

The executive summary of “Housing and disabled people: Scotland’s hidden crisis” says:

“Disabled people report a severe shortage of accessible houses across all tenures ... Disabled people can experience serious deterioration in their mental wellbeing due to living in unsuitable accommodation.”

It also says:

“Until recently, building standards in Scotland have produced houses that are generally inaccessible, particularly for people who use wheelchairs. The result is that in Scotland only 0.7 per cent of Scottish local authority housing, and 1.5 per cent of housing managed by Registered Social Landlords, is accessible for wheelchair users”.

It makes the point that councils do not set targets for accessible housing and calls for a 10 per cent target. Do you share that concern and agree that there should be targets?

I welcome the EHRC’s report, and we will consider its recommendations very carefully. The Government believes that everyone should have a home that suits their needs, whether we are talking about a home of the right size, a home in the right location or a home that is flexible. As I pointed out, 91 per cent of the homes that we are delivering in the social housing programme are for varying needs. That makes it easier to make adaptations in the future if those are required.

I have made no bones about the fact that I want to see more wheelchair-accessible housing delivered throughout Scotland. That is one of the reasons why I have told local authorities on numerous occasions that there is subsidy flexibility to deliver in that sphere.

Mr Simpson said that there are no targets. Many local authorities set out their ambitions in their strategic housing investment plans. Although the EHRC report talks about a 10 per cent target, I have to be honest and say that I do not necessarily want an arbitrary figure for what is required to be plucked from the air. If I remember rightly, Angus Council’s strategic housing investment plan states that 16 per cent of the housing that it delivers should be for specialist need. I would like local authorities, rather than just picking an arbitrary target or waiting for us to set an arbitrary national target, to get down to the job of looking at exactly what is required in their area and building those requirements into their strategic housing investment plans.

The refresh of the local housing strategy guidance will set out our ambition and expectations in that regard. Beyond that, we require councils and housing associations to take a logical approach and use the data that is already available to them—to look, for example, at who is on their waiting list—to set out what they need to do.

The EHRC report includes a number of recommendations, and I intend to talk to stakeholders about them. I have met on two occasions—once before the publication of the report, and once afterwards—with Jeane Freeman, who is the minister with responsibility for delivering our disability plan. She wants to get it right, as do I, and we will look carefully at all the report’s recommendations to try to ensure that we improve the lives of many folk who are currently not in suitable housing.

I have questions in other areas, but that is it for disabled housing.

You can come back in a little bit later.

Affordable housing means different things to different groups and individuals. It would be good to know how the Scottish Government defines “affordable housing”.

The Scottish Government planning policy defines affordable housing broadly as

“housing of a reasonable quality that is affordable to people on modest incomes.”

That includes

“social rented accommodation, mid-market rented accommodation, shared ownership, shared equity, discounted low cost housing for sale including plots for self build, and low-cost housing without subsidy.”

In addition, affordable housing in the context of the target of 50,000 affordable homes includes homes for social rent and mid-market rent as well as homes for low-cost home ownership.

I am sorry for reading much of that out, convener—I thought that I would simply state what is written down.

Thank you, minister—that gives us an explanation. We talk about “affordable rent”, and you have itemised within the definition a number of categories.

The tackling child poverty delivery plan refers to working with partnerships to ensure that affordable rent becomes a reality. Can you give examples of what you are actually doing in partnership to ensure that that happens?

First, I should say that the Scottish Government is absolutely committed to ending child poverty. That is one of the reasons why we are currently looking at what is driving costs for social landlords, so that we can examine together the opportunity to reduce those costs.

We will support the sector to expand its own improvement, innovation and efficiency work. We are working with partners in the social housing sphere to understand, for example, how savings can be made even within the affordable housing programme itself without reducing quality. We want to ensure that we do our very best to invest while keeping rents at an affordable level. It is up to local authorities to assess a number of the aspects, and it is up to housing associations to set rent levels.

10:15  

Obviously, we have rules on those bodies consulting tenants on affordability and rent increases. In certain places over the past while, some folk have been unhappy with proposed rent rises. In some of those cases, housing associations have looked at the matter again and have reduced the increase.

We are committed to continue to look at the area. My officials and others are looking at it in depth. We will continue to have discussions with partners to ensure that we do what we can to help the sector reduce costs. We hope that that will keep the rents lower.

You make a valid point that it is important to have dialogue between yourselves, the housing associations and the housing sector to ensure that rents are affordable.

People have seen year-on-year increases taking place. How do you see housing affordability and the Government’s budget priorities for the future balancing, to ensure that you capture, maintain and retain that balance?

As we expand and deliver the programme, one of the things that will happen is that people will have more options over where they live. On the issue of the small number of difficulties with rents that there are in the social housing sector, I note that I do not hear people in that sector talking about rent increases to the degree that I hear folks in the private rented sector talk about them.

As we continue to deliver more social housing, we will give folk the ability to shift from the private rented sector into the social housing sector, thus reducing their rents.

On rent itself, there are difficulties over welfare reform and the cap that has been put in place. We are seeing some difficulties already in places where universal credit has been rolled out in Scotland, particularly in the Inverness area and in East Lothian.

I ask the UK Government to look again at its benefit cap policy and at how universal credit is having a major impact on some folks’ lives. I also want it to look again at the local housing allowance, which has been capped for a number of years. Those things are causing major difficulty to rent payers in Scotland.

I have a follow-up to Alexander Stewart’s line of questioning. The Chartered Institute of Housing’s research has shown that, since 2012, there has been a growing gap between the local housing allowance and rent that is paid. The Government is concerned about the affordability of private rented housing in Scotland, as you have alluded to, particularly in the light of benefit reforms. What conversations have you had with your UK Government equivalents on that specific point?

We have had a number of concerns for a while. I have stated those concerns in the chamber and at committee. In the opportunities that I have had when talking with counterparts, I am not backward in coming forward in telling the UK Government what I think.

The solution to all those issues is currently in the hands of the Department for Work and Pensions and the UK Government. LHA rates, which Ms Gilruth mentioned, are calculated on behalf of the DWP according to DWP criteria. Those criteria have caused major damage to many families across the country. It has been said that 2019-20 will be the last year of the freeze in uprating. We will wait and see whether that is the case. The UK Government has yet to announce what approach it is going to take after that.

I think that it is quite simple. The UK Government has to allow LHA rates to return to the true 30th percentile, which was the previous definition, to end the freeze and to recognise that rents have risen. In some places in Scotland, it is impossible for folk to pay their rents given the current LHA allowance. If the committee wants more detail on the criteria that are set by the UK Government, I am more than willing to supply you with any information that is required in that regard, although I do not have it at my fingertips.

That would be helpful.

I would like to go back to talk about child poverty. I know that you mentioned that in one of your previous responses, with regard to the Government’s tackling child poverty delivery plan, which notes that it will

“Ensure that future affordable housing supply decisions support our objective to achieve a real and sustained impact on child poverty”.

You spoke earlier about the refresh of local housing strategy guidance, and the plan also states that the strategy

“will ensure that local authorities ... take a robust, evidence-based approach to the identification of specific housing needs.”

How will you monitor whether local authorities target tackling child poverty in what they are doing around house building?

I am glad that you have mentioned the tackling child poverty delivery plan. As I said in a previous answer, we are working on stakeholder engagement on the action to work with the social sector to agree the best ways to keep rents affordable. COSLA, the Association of Local Authority Chief Housing Officers, the Scottish Federation of Housing Associations, and the Glasgow and West of Scotland Forum of Housing Associations will be involved in the development of that work. In those discussions on coming up with the best way forward, we will also discuss how we monitor all of that.

The Government is grateful to partners for the level of co-operation that there has been on many of those difficult issues, and we want to continue to ensure that we consult fully, not only on implementation but on how we monitor that. We will put flesh on the bones of all of that, and I am sure that, in the future, the committee will be asking us how we are getting on with those discussions, and how we will actually deliver on that scenario of trying to keep rent as low as possible and decrease child poverty and other poverty streams by getting that right.

The Government’s aspirations around closing the attainment gap seem to be intrinsically linked to what we are doing on child poverty. Might the local housing strategy guidance consider how pupil equity funding links to what is happening in the housing sector? I know that the allocation of pupil equity funding is predicated on free school meal entitlement. Will you consider tying in that measure to what we are doing on housing?

Ms Gilruth makes a very interesting point. Many of the difficulties that we face in various aspects of life, including the attainment gap, are entirely driven by poverty. I will certainly reflect on what she has said today, and we will get back to the committee on what we will do in that regard.

I want to check a matter related to affordability. Housing associations and local authorities have significant flexibility and independence in determining their rent structure and policy and how they review their rents, and they consult in relation to that. The retail prices index has been used as the underlying rate of inflation when setting rent levels, and the convention was to use RPI plus 1 per cent. However, the other day, some constituents told me that a concern of theirs was that although the UK Government benefits were often linked to the consumer prices index, which runs at about 1.2 per cent below RPI, their local housing association uses RPI to set rent levels. Therefore, there is widening inequality in rent affordability.

Given that this Parliament has control over a small amount of benefits and the UK Parliament has control over a significant amount of benefits—you have previously mentioned universal credit and other aspects of the benefit system—could the Scottish Government give more consideration to what guidance local authorities should get on how they set their rent levels? What representations can we make to the UK Government on how it gets its benefit levels right, including for in-work benefits? RPI is used to set the rent levels of people who receive social housing benefits—whose costs are going up—but CPI is used to uprate benefits. Every year, rent becomes increasingly harder to pay.

It is difficult for me to sit here and talk about what individual housing associations may base their rent increases on. In relation to decisions about rent pressure zones, the Private Housing (Tenancies) (Scotland) Act 2016 caps rent increases in rent pressure zones at a minimum of CPI plus 1 per cent. I also know that, recently, a number of organisations have used CPI.

Again, it is not up to Government to dictate to registered social landlords what they do. Those are decisions for them to make, and we are in the process of taking the Housing Amendment (Scotland) Bill through Parliament.

I have in front on me a table on relevant social rent benchmarks assumptions that have been made over the piece that I could read out. I think—

Minister, for your own benefit, do not read out that table. I appreciate that you were about to give us additional detail, but I am conscious that other members want to ask questions. I simply emphasise my hope that there is a collegiate approach with local authorities and housing associations as they independently set their rent levels and in relation to what best practice guidance in that area might look like. The other side of the coin is about the divergence between one cost pressure and one income supplement when the UK Government—and, to a lesser extent, the Scottish Government—sets benefit levels. Are those matters that you can look at with Jeane Freeman?

That is something that the UK Government needs to look at in some depth, as it should do with all its benefits, including all the housing benefit scenarios for which it is still responsible.

At the start of each financial year, we routinely publish guidance that advises RSLs and councils of the social rent benchmark assumptions. If it would be helpful, I could send you the details, including the tables that I have in front of me, so that you have a better indication of what is going on.

That would be helpful. Thank you, minister.

10:30  

I would like to deal with the issue of rural housing. In 2016-17, about 17 per cent of Scotland’s population lived in rural and island areas, but only about half of that proportion of affordable houses was built in those areas. In rural Scotland, wages are below average and rents are above average. If there is no equalisation in terms of the share of the housing that is being built in rural Scotland, more pressure is put on towns, as people have to migrate to get affordable housing, and it aids depopulation and makes it more difficult to deliver services in rural areas in the long term. I know that there is a rural housing fund, but what can we do to reverse that trend and ensure that rural and island Scotland gets the level of investment in affordable housing that it deserves, at least in terms of its share of population?

First, I should say that the resource planning assumptions that are given to local authorities do not break down into rural and urban categories, but I know that many local authorities have that mix of rural and urban areas. Local authorities are responsible for the local investment and for deciding where that housing should be built. I have been pretty robust in saying to people that they need to consider all factors that exist in their area. There are opportunities that arise, and councils should be looking at the ever-changing scenarios that exist.

A good example of that would be Highland Council. A lot of folks were saying that the council’s emphasis was largely around the Inverness area, but I think that that has changed and is changing. We have seen opportunities in terms of economic growth in Fort William, and there has been a re-emphasis there. Obviously, there have been quite a lot of stories about the pressure on social housing in the Skye and Lochaber area that has resulted from the major boost in tourism there. I am glad to say that Highland Council has adapted its approach and is looking much more at the Lochaber area and at Fort William. Certainly, we are about to see some major investment in Skye on the part of Lochalsh and Skye Housing Association.

When I go about the country, as I am prone to do, I challenge local authorities about their plans and talk to folk to see exactly what is required. I hope that all local authorities will listen to the populace at large about what is required and will adjust their plans accordingly. After all, in certain rural areas, the additional housing might mean that the local school or some other community facility can stay open. However, these are matters for local authorities. In fairness, I would say that most of the local authorities are getting much better at this.

One of the issues in rural and island areas is the fact that it is much more expensive to build there. For example, on the islands of Arran and Cumbrae in my constituency, it can be anything from 25 to 50 per cent more expensive to construct a house, because materials and workers have to be brought over, and sometimes the workers have to be housed on the island during the working week. Obviously, that creates a disincentive for local authorities and registered social landlords to build houses on islands, because they can build more houses for the same money on the mainland—if we are talking about numbers of houses built, that is what they will want to do, but that makes it difficult for island communities to get the housing that they need.

What can we do to incentivise house building in rural and island communities so that there is a level playing field and that disincentive for authorities and better social landlords is minimised?

Once again, I will touch on the subsidies. As I keep saying, I will not change subsidy levels, but local authorities and housing associations can have discussions with my officials about subsidy levels for remote rural and island communities. I recognise that it costs more to build in certain places. Often, the skills have to be brought on to an island because they are not there. I hope that we can build up the skills on the islands and that the pipeline of work will enable us to do that in many places.

Some of the subsidised projects that have recently been completed have received fairly substantial levels of subsidy, but we were keen for them to go ahead. One of the best examples of that is the project at Ulva Ferry on Mull. Building a couple of houses there was immensely costly compared to building even on other parts of Mull, as I understand it. We recognise that is the case. My officials on the ground take a commonsense approach to the matter. We need to get the local authorities to have the discussions to get what is right, whether that be on Arran, Cumbrae, Mull or even Ulva.

You helpfully supplied some data to the committee last year that was analysed by Rural Housing Scotland, which claims as a result of that analysis that 72 per cent of new homes in the affordable housing supply programme that were classified as rural were actually built in urban areas. There is some disagreement about the numbers and I do not propose to enter into that disagreement at the moment. However, rather than publishing the data in a simple urban-rural split, for statistical accuracy, will you commit to publishing it on the basis of the sixfold urban-rural classification in the future so that there will at least be some understandable data?

If I remember rightly, Mr Wightman asked a similar written question of me previously. There might be some difficulties with some of the data gathering. I do not want to commit myself to doing something that I cannot necessarily do easily. I will examine the situation and get back to the committee with what is possible and not possible.

That is extremely helpful.

I will leave it there on rural housing, convener. I would like to ask some questions on affordability, but perhaps I will come back to that.

Why not fire away now? I give members a heads-up that we have about 20 minutes left of this evidence-taking session. If they want to ask something specific, I ask them to catch my eye so that we can get it in.

You have laid out the Government’s definition of affordable housing as being based on the planning system and tenure. However, shared ownership and social rented housing are not available to growing numbers of young people, in particular. Even so-called affordable homes at 80 per cent of market rent are not affordable.

The committee is aware of the difficulties in defining affordability based on incomes. I do not underestimate those difficulties, but will you consider redefining what you mean by affordable housing in policy terms, to move away from a vague planning and tenure basis to something that is more akin to people’s real lived experience of what housing costs?

Being the anorak that I am, I have considered a huge amount of discussion, academic papers and what could be termed general argument about how to define affordability. We could spend a very long time trying to define something that, in some cases, is almost indefinable. I would rather get on with the business of delivering. One of the key aims is to increase the supply of housing—social rented housing in particular. That will allow more folks to access housing, thus it becomes more affordable. I am quite sure that the committee will have considered various academic papers and taken part in some of the arguments about how affordability is defined.

I think that what we have at the moment, although it is not ideal, gives us a fairly good setting. I do not know how long it would take for us to reach agreement on a definition, or whether that definition would necessarily last five minutes. The reality is that what may be affordable to us as individuals today might not be affordable tomorrow, because of ever-changing circumstances. I would rather concentrate on delivery than have a huge rammie about the definition.

I am not proposing “a huge rammie”. I acknowledge that it is difficult. My point is that the current definition talks about housing being

“affordable to people on modest incomes”,

but it goes on to outline a tenure-based approach. I am simply saying that use of the term “affordable housing” is increasingly disconnected from people’s everyday experience of how affordable housing is. I am not suggesting that we have a big rammie about what affordable housing is. I am simply suggesting that we move towards something that may not be perfect, but may be more akin to people’s everyday understanding of what is affordable for people on modest incomes.

As you well know, convener, I am a pragmatic man, and I would rather spend time on delivery than concentrate my efforts on that kind of scenario. If somebody came up with a different definition, I would look at it, but in all honesty I want to concentrate on delivery rather than argue about a definition. A lot of folk do not agree with the current definition, but a lot of other folk do not agree with the other definitions that have been put forward by academics and others. We have what we have, so I would rather concentrate on delivery.

You have had your answer, Mr Wightman, although it might not be the answer that you wanted. In the papers that we looked at, the question of the definition was hotly debated, so I thank you for raising the issue.

I do not know which papers you have seen, convener, but I imagine that they are probably not much different to the stuff that I have read.

The definition is an issue, so it was important to raise it.

I have a couple of quick questions. Have any councils yet applied to set up rent pressure zones?

There have been no formal applications to the Government. I know that a number of local authorities are looking at that option, but no such intention has been stated—unless that has happened in the past few days.

Do you know which councils are considering doing so?

It is fair to say—because there have been press reports—that the City of Edinburgh Council and Glasgow City Council are considering doing so. Beyond that, I know that other local authorities have been talking about it, but I do not know how far advanced developments are, in that regard.

My second question is about the warm homes bill, which was a Scottish National Party manifesto commitment. It appears to have been dropped. I could be wrong on that, but—

Forgive me, but I cannot remember the name of the bill. It will be introduced before summer recess, alongside the fuel poverty strategy.

Are we talking about something that will be called a fuel poverty bill?

10:45  

It will be called the fuel poverty (target, definition and strategy) (Scotland) bill”. That will set the new definition and a new statutory fuel poverty target.

That is a snappy name.

I wish that I had more of a say in such matters, but the name of a bill must be neutral and acceptable to the Presiding Officer.

Let us just call it the fuel poverty bill. That is different from the proposed warm homes bill. Has the warm homes bill been dropped?

No. We have always said that we will do the work in two stages. The first stage is the fuel poverty bill, which will drive provision of support to the people who are most in need, regardless of where in Scotland they live. That will go alongside the fuel poverty strategy that will be published at the same time, and which will outline our aims to maximise the number of homes that reach energy performance certificate band C, and to target support that enables action to be taken.

As the committee is well aware, we have already set out a number of standards for social housing and private sector landlords, and the fuel poverty bill—which will be published before the summer recess—will spell out what is required in the owner-occupied sector.

I hear that. Is it the case that we will not have something called the warm homes bill?

No. We will have the forthcoming fuel poverty (target, definition and strategy) (Scotland) bill, which I would much prefer to have called the warm homes bill.

What was the reason for the change?

It is my understanding that “Warm Homes (Scotland) Bill” would not have been accepted as a title.

Given that Mr Simpson thought that there would be two different pieces of legislation, it would be helpful when the fuel poverty bill is introduced for it to be made clear which aspects of what Mr Simpson believed would be in the warm homes bill are incorporated in the fuel poverty bill.

I do not think that we are talking about anything different, but I will outline in writing all the detail of what we are going to do in the next couple of weeks.

My concern—and, indeed, that of stakeholders—is that the bill might be different from what we expected.

No.

So, it is just a change of name.

I would have much preferred the bill to have been called the warm homes bill, but that is not where we are at.

When the committee looks at the bill, we will scrutinise the content rather than the name.

Absolutely. The content is key.

Do you want to follow up on that, Mr Simpson?

That is fine.

On 12 October last year, the rental income guarantee scheme was launched to boost investment in building houses to rent. What progress has been made on delivery of that scheme?

Expanding the build-to-rent sector is part of the wider “more homes Scotland” approach. It is a key element of our strategy for the private rented sector.

Last October, we launched a package of measures to stimulate growth in the sector and to attract investment in the build-to-rent market. As part of that package, which was well received, we have offered changes in planning advice and taxation. We have also explained the tenancy reform process that we have gone through and the rental income guarantee scheme, which Mr Gibson mentioned.

The Scottish Futures Trust has had quite a number of meetings and has kept in close contact with developers, investors and lenders, and I am told that there has been positive feedback on the scheme. As things progress, I will be more than happy to keep the committee informed of developments.

It is just over seven months since that scheme was launched. Is there any indication of the number of additional privately rented homes that will be built either in this financial year or the next as a direct result of the policy?

That is difficult for me to say. I think that the Dandara scheme in Aberdeen was the first to be completed in Scotland. Planning permission is being sought for a number of sites in Glasgow, but if members will excuse me, I will not talk to any great degree about planning permission. Work is being done in Glasgow at Finnieston, on Pitt Street and Fountainbridge in Edinburgh by Moda Living and Apache Capital, and in Dundee at Whiteburn. I have no more detail than that, and I am sweirt to talk about sites for which planning permission might be being sought at the moment.

It sounds as if progress is being made. On 20 December, the Cabinet Secretary for Finance and the Constitution told the committee that he was considering using financial transactions capital to support a building Scotland fund, which would have prominent housing and infrastructure processes. Where are we with that?

There have been discussions between members of my housing innovation team and others who are helping to establish the Scottish national investment bank. The £150 million building Scotland fund is seen as a precursor to the Scottish national investment bank. The money will be available to non-public-sector organisations, as the committee is probably aware, and debt or equity capital will be provided. We are at the early stages of the process. A lot of discussions are going on between the housing innovation team and others in Government to get that absolutely right.

We have changed the budget process, because we now seek to use every opportunity to have a rolling programme of questions on the budget. One of the issues that we raised on the last financial year’s budget related to moneys for adaptations. The committee wanted to ensure that there was a tenure-neutral approach to adaptations, but noted that the budget for the social rented sector outwith local authorities—in essence, housing associations—was £10 million. It had been £10 million for some time, so it was not a cut, but the figure was stuck. We tried to get some information—the Government has been helpful in providing information on the spending on health and social care partnerships within integration joint boards—but the information that we were getting was a bit patchy. We found out that in 2016-17, 23 integration joint boards got just over £38 million, so we did not have the full picture.

We are keen to ensure that we have a tenure-neutral approach to adaptations, particularly in light of the matters relating to disability and housing provision that we have talked about. It appears to me—the committee will need to discuss this—that the £10 million figure might need to shift at some point in the future. However, we cannot really gauge how much it should shift, on a tenure-neutral basis, if we do not know how much integration joint boards spend on other types of tenure. Any comments that you have on that would be helpful.

I probably have a fair number of comments on that. I say at the outset that the £10 million is additional Government money that goes to RSLs for adaptations, as I have explained. Primary responsibility for housing adaptations rests, as the convener rightly pointed out, with integration joint boards’ health and social care partnerships, and what they do should be tenure blind. I agree that the information that I have provided to the committee is patchy: I am not particularly happy with that situation.

We will go back to the HSCPs and ask them to have a hard look at what they are doing in that area. On Saturday, I was in Aberdeen, at an event at which tenants and residents from a number of local authorities were having their regional annual general meeting. It would be fair to say that although some of them were complimentary about what is going on in their areas, others were very unhappy indeed. We have had a number of workstreams on adaptation and we have findings from our pilots. I will look closely at what might need to be done, either in terms of exporting best practice all over the place, or in terms of talking to colleagues to see whether there is a need for additional guidance.

My final point is a very simple one. There will be a human cost to not getting this absolutely right, but there will also be a cost to the public purse in not doing it properly. At the end of the day, if people are not getting the right adaptations that enable them to lead the independent lives that they want to lead, the additional cost of their having to go into hospital or another care setting will be a burden on the health service. Therefore, absolutely the right thing to do for people and for the public finances is for HSCPs to bend spend to ensure that they get adaptations right.

I want to ask a final question, on which, given the time, it might be helpful if you could give the committee information in writing. I note that Mr Wightman wants to come in with his own final question.

We should measure outcomes from the £38 million and the £10 million that I mentioned in relation to adaptations. Any information that the Government holds, or is seeking to obtain, on how those amounts can be spent most effectively and efficiently would be welcome. Also, because of the connection that you pointed out, minister—that more than £10 million will be spent in the social rented sector, because HSCPs are not precluded from investing in it—it would be better if we could understand the overall spend in the sector. For example, that would be vital for my area, in which there are no council houses, so it would be good to have clarity. Perhaps you could write to the committee with any information that you have.

On budgeting, I do not think that I will have much more information than I have already given the committee. I do not know how easy it would be for us to get our hands on evidence of the differences that adaptations make to individuals’ lives, although it might be useful for the committee to have that. It is very difficult to gauge savings, because they might not be entirely clear. We will provide the committee with whatever we can.

As I have said, I do not think that I can provide anything more on budget. However, the committee can be assured that I have a great interest in the area. Although the matter does not all fall within my portfolio, my colleagues and I will do all that we can to ensure that the best practice in some places also happens elsewhere. That is absolutely the right thing to do for people, and we will do what we can to get on top of it.

That would be really helpful. It means that when we get to the sharp end of budget scrutiny we will not just be looking at raw numbers but at the wider picture.

11:00  

I have a couple of brief questions. Recently, I had a meeting with the Scottish Commission for Learning Disability, which was concerned about specific guidance on planning for people with learning disabilities in relation to housing. Are you aware of the report from October 2017, and are you engaged in addressing some of those concerns?

I am aware of that report. If I remember rightly, Maureen Watt was recently at a meeting with the SCLD at which she fed back on a number of things from it. I was supposed to attend that meeting, but other business came up. It is an area that we will look at. As I have said to the committee before, at the moment the resource of the building standards division is focused on the aftermath of the Grenfell tragedy and the Cole report. We will soon get reports back from the independent panels that have been looking at fire safety and building standards. After that work is done, we will get back on track on a number of things that have come to our attention.

That is helpful. Finally, on the private rented sector, the outcome to action 30 in the joint housing delivery plan talks about

“More people choosing to rent in the private sector”.

Many people in the private rented sector at the moment do not want to be, and would rather be in the social rented sector, but even after 35,000 more homes being built they will still not be able to get a social rented home. I wonder whether more people choosing to rent is an absolute aspiration—do you want arithmetically more?—or is the aspiration that relatively more people will do so, given that the percentage has trebled since 1999.

I want to give people choice. I want to give people the choice of living in a council house or housing association home, or in quality private rented stock, or of being able to own their own home. People make different choices at different points in their lives, and it should be easy for folk to move as they want. There are folks in the private rented sector who do not want to be there, which is one of the reasons why we are doing all that we can to increase social housing across the country. I also know that there are a lot of folks who want to live in the private rented sector. It is all about giving people choice

Thank you. That brings us to the end of this evidence session. I will suspend the meeting briefly, but you cannot make your escape, minister; you are sticking with us for the next agenda item. However, I thank you for your evidence, and I thank your two officials for coming along this morning.

11:03 Meeting suspended.  

11:08 On resuming—