Ministers have come under fire for having an "unforgiveable" capital project underspend of £130m while slashing cash for affordable homes by nearly £200m in just one year.
Concerns have emerged that the Scottish Government underspend for the associated 2023/24 budget was at the highest level in five years and over four times higher than last year. Underspends are usually carried over to the following year.
In mid-May when the Scottish Government finally formally stated there was a housing emergency after four local authorities by then including Glasgow and Edinburgh had already made declarations, First Minister John Swinney warned: “We have to recognise that the government does not have a limitless amount of money and we can’t invest everything if our capital budget is being reduced by the UK government.”
It comes as the housing minister Paul McLennan offered no hope on Thursday of urgent new money for affordable homes despite finally issuing a national housing emergency.
While declaring the Scottish Government had an action plan to try and resolve Scotland's housing and homelessness emergency there was no new money put on the table.
He accepted that there was a general priority to increase housing supply and tackle homelessness but came under fire for not offering hope of even reversing huge cuts to the affordable housing budget, revealed by he Herald.
It also fell short of any commitment to extra money after professional standards body the Chartered Institute of Housing (CIH) said they needed to commit hundreds of millions of pounds extra each year on providing affordable housing to resolve the emergency finally announced by the Scottish Government.
The Herald revealed a year ago how professional standards body CIH had raised concerns over cuts to the budget and warned progress on homelessness is at risk without a funding commitment over rapid rehousing in permanent homes rather than in temporary accommodation.
In the wake of the Scottish Government making a symbolic housing emergency declaration in mid-May, the key housing professionals group had said that while it is a start, it is not enough as the affordable homes budget, a key part of the Scottish Government bid to end the crisis lost more than £300m over the past two years alone.
The housing emergency declaration was made by social justice secretary Shirley-Anne Somerville during a Labour-led debate at Holyrood and ministers have cited UK government austerity including cuts to their block grant, inflation, labour shortages linked to Brexit and a freeze to local housing allowance rates for the situation.
Former Scottish Conservative deputy leader Murdo Fraser said: "We always hear the SNP complaining about a small reduction in their capital budget from the UK Treasury, but here we see an underspend of £130 million.
“When we have a housing emergency and capital projects crying out for investment, it is unforgiveable that such a high level of underspend has been permitted."
Housing campaigners Living Rent said the failure to spend the £130m whilst they continued to cut back the affordable housing budget was a "kick in the teeth to the hundreds of thousands of tenants stuck on social housing waiting lists".
Aditi Jehangir, chairman of Living Rent said: "This is money that could and should have been spent on building more affordable housing and alleviating the housing crisis.
"It is beyond belief that they have declared a housing emergency whilst underspending... money that could have gone straight into combating the crisis.
"Everyone is in agreement, Scotland needs more affordable housing. The government needs to put their money where their mouth is and build it."
The SNP previously voted against a Labour motion declaring a housing emergency in November.
By declaring the emergency, the Scottish government was said to be formally recognising the housing problem but there are no practical effects that happen as a result.
The Scottish Government's affordable homes budget has taken a cumulative hit of over £300m over the past two years - based against the 2022/23 allocation of £831.445m - despite the a pledge by outgoing First Minister Humza Yousaf of a £80m uplift for affordable housing over the next two years.
Housing campaigners have been staggered by a £196.08m (26%) cut to the budget in the past year alone, without taking into account inflation, with the spending plans for 2024/25 set at £555.862m before the extra money promised by the First Minister.
If the budget had kept up with inflation in 2024/25, the spending plans would have been at £985.25m.
Without taking into account inflation, the shortfall against 2022/23 is at £315.08m.
When inflation has been taken into account, instead of getting £2.723bn over the three years - the affordable homes budget is at £2.179bn.
Ashley Campbell, policy and practice manager at CIH Scotland commented: “We welcome the Minister restating the government’s commitment to increasing housing supply and tackling homelessness. However, it is disappointing that this is not backed with the funding needed to deliver the homes needed to tackle the housing emergency that the government itself declared in May.
“Without public funding, social landlords cannot deliver affordable homes and the homelessness situation, the worst since records began, will only deteriorate further. The housing sector needs actions, not words.”
The affordable homes plan set out by Nicola Sturgeon in a Programme for Government in 2021 aimed to "build on our investment in housing".
And Mr Yousaf in announcing the £80m added: “Housing is essential in our efforts to tackle child poverty and reduce inequality across Scotland, and it supports jobs and growth in the economy.
The emergency declaration came while the number of affordable homes being approved for build has slumped.
As of December, Scotland has been averaging 633 affordable housing starts a month since setting the target. To meet a 110,000 homes target they have to deliver at an average of 894 homes a month.
This is set against the number of open homelessness applications in Scotland soaring by 30% since the pandemic began - from 22,754 in March, 2020, to 29,652 in 2022/23. The homeless household numbers being forced into temporary accommodation - like hotels and bed and breakfasts - rather than settled homes has shot up from 11,807 to 15,039.
Eight local authorities have now declared a symbolic housing emergency - Glasgow, Edinburgh, Argyll and Bute, Fife, West Dunbartonshire, West Lothian and the Scottish Borders, all citing housing shortages.
The Society of Local Authority Chief Executives, in a July analysis, said that the supply of affordable homes has fallen 20% in three years and "shows no sign of recovering".
They say at least 125,000 homes for social rent were needed simply to satisfy existing demand.
Its July analysis revealed that 243,603 people are currently on the waiting list for social housing, but only 26,102 allocations were made across the entire country.
Official data shows the overall number of affordable homes being started for build including for rent in the social sector has dropped to the lowest annual level for eight years. Some 6,302 affordable homes were begun in the year to the end of September as part of an official programme - but that is a 24% drop (1,996 homes) on the 7,159 started in the last annual analysis.
Public Finance minister Ivan McKee said: "Every penny of the capital identified is being spent in this financial year – any suggestion that this funding will not be fully utilised is simply not true as anyone who understands this process would know.
"Effectively managing a significant capital programme means that inevitably there will be some funding movements across financial years. In this case the sums involved represent the equivalent of just over one week’s worth of spend from a budget of £5 billion.
“Due to financial rules placed on Scotland by the UK Government, we are not allowed to overspend on our Budget, so [it] must leave headroom to manage any issues that might arise, including any in-year budget cuts imposed by the UK Government delivered through negative consequentials as has happened in recent years.”
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