Edinburgh Council’s housing plans face £77m funding black hole

The council wants to build 20,000 new homes in Edinburgh, Picture: Rui Vieira/PA Wire
The council wants to build 20,000 new homes in Edinburgh, Picture: Rui Vieira/PA Wire
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PROPOSALS to build 20,000 affordable homes in the Capital face a funding black hole of £77 million.

The city council’s housing and economy committee approved the authority’s Strategic Housing Investment Plan (SHIP) from 2019 to 2024 to be submitted to the Scottish Government.

But the projected shortfall of funding has increased from an estimated £57 million  in 2016 when the council’s ambition was to build 8,000 homes over 10 years to £77 million now  the SNP-Labour coalition has pledged to construct 20,000 new homes by 2027. Almost 80 per cent of the grant funded Affordable Housing Supply Programme (AHSP) is for social rental homes with the remainder being for mid market rent and low-cost home ownership.

The council believes the key risks to delivering its 20,000 homes include a “failure to secure suitable land for development” and that the plan “requires almost double the funding currently set out in Scottish Government’s three-year resource planning assumptions.” The SHIP sets out the delivery of more than 10,500 new homes over the next five years.

Opposition councillors believe that 20,000 new homes will not do enough to tackle the Capital’s housing problems. The latest housing need and demand assessment reveals there is demand for between 38,000 and 46,000 new homes in Edinburgh over 10 years and more than 60 per cent need to be affordable.

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Green Cllr Susan Rae said: “The SHIP has the most ambitious house-building programme in Edinburgh for many years.  But even if the 20,000 target is met, it is below the 23,000-28,000 affordable homes that the city’s own assessment says are needed and the SHIP already says that there is a £77m shortfall in funding. Looking over the whole period, the funding needed, at £88 million a year, is almost double what the Scottish Government has made available.

“The housing shortage is a massive blight on the city. With the highest housing costs in Scotland and social housing numbers far below the Scottish average, the only answer is to redouble efforts to build homes where they are needed and at prices people can afford and for the Scottish Government to support the council fully in doing that.”

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More than 21,000 people in Edinburgh are registered for social rented housing with an average of 190 households bidding for every social rented home that becomes available for let. Around 70 per cent of council rental properties in Edinburgh go to homeless households.

Labour Cllr Gordon Munro quizzed council officers about how the authority intends to fill the funding gap, which he warned could have an impact on homelessness services.

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Housing and economy convener, Cllr Kate Campbell, said: “It’s important to remember that the Scottish Government increased the level of grant funding for Edinburgh by £10 million and gave certainty around funding for housing for three years.

“Last year we received, in total, an additional £10 million in grant funding that other local authorities hadn’t managed to spend. This year we have received an additional £4 million so far.”

She added: “Our SHIP report sets out our ambitious plans for building affordable housing in Edinburgh and makes the case to the Minister for the maximum allocation of grant funding to support building social homes in the city.

“We’ve made it clear that we are ready and able to spend any grant funding allocated to Edinburgh. But we are also working with partners and the Scottish Government to fund affordable housing in other ways, such as through loan funding, so that we are able to deliver on our commitment to build 20,000 affordable homes over 10 years.”