There was much not to like about the Scottish Budget, which had its Stage 1 debate last week. Addressing a highly difficult financial predicament, much of which is not of its own doing, the Scottish Government had already fashioned a noose for itself by announcing a council tax freeze at a time when public services are in crisis.

On the hoof policy rarely works and it’s certainly no way to run a government. The freeze was announced to the complete surprise of members of the public never mind the reams of stakeholders usually involved in policy making – civil service, the Scottish Green Party and members of the Scottish Government themselves.

The freeze most benefits those living in more expensive properties and helps not a jot the poorest in Scotland who pay no council tax, but will lose out through cuts to the services they desperately need. The Scottish Government can be commended for the additional tax band on higher earners, netting some much-needed spending power, but it was nowhere near enough, to repair the dent in public finances caused by the freeze.

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Amongst the casualties was the housing budget. As reported in this paper last week, a Scottish Government pledge to help end a housing and homelessness crisis has suffered a scandalous hit with its annual budget slashed by £360m over the past two years. The cuts are considered by housing campaign organisations such as Living Rent and Shelter to have delivered a fatal blow to the Scottish Government’s promise to deliver 110,000 social and affordable homes by 2032.

According to a YouGov poll, commissioned by the Scottish Federation of Housing Associations (SFHA), 80% of Scots say Scotland is in a housing crisis, with respondents also saying that housing is the third most important issue facing the country (27%).

The fundamental reason for building social housing is obvious. Where they are available these homes keep tens of thousands of people out of poverty and when properly maintained, social housing reduces the number of people in fuel poverty. As Public Health Scotland argues: Social housing generates important health, economic and social impacts for its residents, communities and for Scotland. These impacts are multi-dimensional, measurable and can contribute to Scotland’s national ambitions.

However, the case for publicly funded house building programmes goes far wider than protection and social cohesion. Since the 1970s, a time of far greater income equality in Scotland and the UK, there has been an incremental change in the proportion of national wealth generated by wages compared with that held in assets.

Assets include land and property but property accumulation and the profits from renting are a significant component. Wages as a share of UK GDP peaked in 1975 at 65% and had fallen to around 53% by 2008. It has recovered somewhat since then but the overall trend has not been reversed. Combine the facts that profits (rather than wages) are a key driver of inflation; that most of the historical wage squeeze impacts those on median and lower incomes; and that housing wealth passes generationally through families and you create a perfect storm of inequality for swathes of workers.

It is true that recently house prices have begun to fall, driven by rock bottom levels of mortgage approvals caused by the Tory-created economic crisis and resultant high interest rates. This has of course caused massive financial insecurity for millions. However, the long-term trend of house value increases outstripping wage rises is there for all to see.

The Herald: Social housing has wide benefits, says Roz FoyerSocial housing has wide benefits, says Roz Foyer (Image: free)

Falling house prices and high interest rates also create the perfect opportunity for those who already have wealth and those who can access finance to purchase land and property. The corporate build-to-rent sector is predicted to experience significant growth with its total value across the UK expected to double over the next five to £126 billion over the next 5 years. Pivot back to the worker on median salary, unable to access the mortgage market, unable to afford private sector rents and the housing crisis is there for all to see.

The Scottish Government is not empowered to address all of the causes and injustices connected to this situation. Fiscal tools such as borrowing limits, interest rates, capital gains tax and inheritance tax are all reserved to Westminster. But housing policy is devolved and that includes the ability to invest in social housing.

Social housing is an integral factor in combatting rising private sector rents, not to mention meeting targets for lower carbon emissions and tackling fuel poverty. It also drives economic growth in our communities. To its credit, the Scottish Government abolished the right to buy in 2015 – keeping an estimated 15,500 homes in the social sector over the next decade. That is why it is so desperately disappointing to see the dropping of the pledge of 110,000 social and affordable homes by 2032.

In the here and now, our local authorities have already been chronically underfunded by years of government spending cuts which disproportionately impact those most in need. The Scottish Government’s excuse for freezing the council tax is predicated on the cost-of-living crisis of which housing costs are a significant part. But all they are doing is kicking the can further down the road.

At least part of the solution to the housing crisis is to fairly and proportionately tax property and wealth and here the Scottish Parliament does have the power to act. It starts with a rates revaluation.

Last week, alongside some of Scotland’s largest trade unions, charities and campaign groups, we contacted all political party leaders in Scotland and called on them to back our calls for an urgent revaluation.

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Currently, the level of council tax that is paid is linked to property values that were last updated in 1991. Research undertaken by the Commission on Local Tax Reform in 2015 shows that over half of all properties in Scotland would have changed band if a revaluation had taken place in 2014.

Pie in the sky? Not in the least. It is already happening in Wales. Last Thursday, in response to our open letter, of which he was a co-signatory, campaigner and former MSP Andy Wightman published a Statutory Instrument effecting a revaluation that could be introduced to the Scottish Parliament tomorrow. Much of our current housing and public services crises are caused by policy outwith out control, but that is no excuse for failing to use those we have.