Infrastructure Investment Plan progress report for 2015

Housing

We want everyone in Scotland to live in affordable, quality homes that meet their needs. This is key to building and sustaining a fairer and more prosperous Scotland.

Scotland has a strong record in housing delivery. We have invested £1.7 billion in affordable housing over the lifetime of this Parliament and have met and exceeded our target to deliver 30,000 affordable homes; from April 2011 to December 2015, we have delivered 31,034 affordable homes, with 20,854 of these for social rent, and within that, 5,405 council homes. Building on this success, we and our partners want more homes delivered across all tenures.

In the next Parliament, our target will be to deliver more than 50,000 affordable homes, backed by investment of over than £3 billion. We have listened to our partners and will continue to work with them closely. The areas we will be focussing on to deliver More Homes Scotland, an overarching approach to support the increase in the supply of homes across all tenures are:

• For 2016-17, the Housing Supply budget has been set at £690 million. This will deliver between 8,000 - 9,000 affordable homes in 2016-17, 28% more homes than the average output in the last 2 years.
• Our target to deliver more than 50,000 affordable homes will support approximately 14,000 full-time equivalent jobs a year in the construction and related industries in Scotland and will generate around £9 billion of economic activity over the 5-year life of the programme.
• We have launched a new grant and loan Infrastructure Fund with up to £50 million available for 2016-17. Working with local authorities, we will provide targeted assistance to help unlock strategically important housing sites and increase the scale of housing delivery.
• We will expand mid-market provision, building on successful innovative initiatives which use guarantees and loans.
• We have also followed up our support of the growth of the private rented sector ( PRS). A PRS Rental Income Guarantee Scheme, developed with Homes for Scotland and industry specialists through the PRS working party, is currently being market-tested.
• We will consult local authorities, Registered Social Landlords and others Spring 2016 on the resources, skills and expertise they need to help build delivery capacity and to identify where the critical gaps are and how best to fill them.
• In 2016-17 we will invest £160 million to help up to 5,000 people access homeownership. £80 million has been allocated to the Open Market Shared Equity scheme to help up to 2,000 first time buyers on low to moderate income, and £80 million has been allocated to the Help to Buy (Scotland) Affordable New Build and Smaller Developers Schemes to help up to 3,000 first time buyers and existing homeowners buy a new build home.
• In January this year we announced an increase in housing grant subsidies by up to £14,000 for social and affordable homes for rent with immediate effect. This will help councils and housing associations to maintain momentum through to March 2019 and beyond to help deliver our 50,000 affordable homes target.

A new £25 million fund was launched in February which will provide an estimated 500 new affordable homes specifically to rural areas across Scotland. We know building affordable housing in rural areas presents different challenges compared to urban areas which is why we are ensuring this fund is open to rural interests, including community bodies, private landlords and landowners.

We are maintaining Scotland's leadership in financial innovation and competence, continuing to work creatively with our partners and use innovative ways to deliver more new homes across all tenures for less public investment. Over 4,000 new affordable homes have already been approved through a range of innovative financing mechanisms, unlocking up to half a billion pounds of housing investment. We are the first, and remain the only, national government in the UK and public sector body in Scotland to invest in Charitable Bonds. We have plans to invest £37 million in these bonds, creating loan finance to fund affordable housing in Scotland, and generating charitable donations of £1.4 million for regeneration charities and up to £10 million for social housing. This could support the delivery of up to 600 new affordable homes.

We are committed to a wide-ranging review of the planning system, with a focus on improving the effectiveness of planning processes that support the delivery of good quality housing developments. The panel will make recommendations to Scottish Ministers in May and we will respond later this year.

Fuel poverty

We remain committed to the statutory target of eradicating fuel poverty, as far as is reasonably practicable, by November 2016 and we are doing everything it can to tackle this issue. Latest statistics show that fuel poverty levels have been contained despite fuel prices rising.

In the budgets that we have under our control, we have maintained the expenditure available for fuel poverty and energy efficiency in what has been a tough financial climate. We have allocated over half a billion pounds since 2009 on a raft of Fuel Poverty and Energy Efficiency programmes. Since 2008 more than 900,000 measures have been installed in homes in Scotland - nearly 1 in 3 of all households (over 700,000) have now received energy efficiency support. These were installed either directly funded by Scottish Government schemes or supported by the broader enabling environment created through our Home Energy Efficiency Programmes for Scotland.

In the budget for 2016-17, we are making available more than £103 million to tackle fuel poverty and energy efficiency next year, which is a significant commitment in light of on-going spending pressures and UK Government cuts and considerably more than previous governments in Scotland. This money will be used to help install energy efficiency measures, including solid wall insulation, in 14,000 homes and will build on the 900,000 energy efficiency measures delivered since 2008.

The majority of Scottish Government budget for fuel poverty and energy efficiency programmes is allocated to the Home Energy Efficiency Programmes for Scotland ( HEEPS) Area Based Schemes ( HEEPS: ABS). Area Based Schemes are delivered by local authorities and prioritise fuel poor areas, providing a range of insulation measures. Another element of HEEPS is Warmer Homes Scotland. This scheme is expected to help around 28,000 households over a 7 year period make their homes warmer and cheaper to heat. We also have our HEEPS: Loans scheme which provides interest free loans.

Our record investment is reflected in the big improvements in the energy efficiency of Scotland's housing. The share of homes rated EPC band C and above has increased by 71% since 2010, and 11% in the last year. We now have proportionately 53% more homes with a good EPC rating (C or above) than England.