By Keith Aitken in Edinburgh | 22 July 2011
A radical funding initiative designed to kick-start construction of affordable housing in Scotland has been hailed as ‘innovative and helpful’ by the Scottish Government, despite falling short of its initial targets.Under the National Housing Trust, launched in March last year, the government underwrites council loans for development of affordable homes.
At the time of the launch, the expectation was that around 1,000 homes would be built under the first phase of the scheme. Last December, the then housing minister, Alex Neil, upped that projection to around 1,200.
But a discussion paper on taking the initiative forward acknowledges: ‘Phase One is likely to deliver almost 700 affordable new homes.’ This prompted a call yesterday from Conservative housing spokesman Alex Johnstone for ministers to abandon ‘a rushed policy concocted on the back of a fag packet’.
However, the paper leaves in little doubt the government’s determination to press ahead with NHT, an initiative developed by the much-criticised Scottish Futures Trust. The SFT was set up by ministers to devise alternatives to the Private Finance Initiative model for generating capital investment in public projects.
The paper admits that the initial phase of the scheme, which was taken up by seven of Scotland’s 32 local authorities, has encountered some teething problems, notably in relation to the procurement process, the quantities of legal paperwork involved, and the council staffing resources required.
But it says that around 20 councils have declared an interest in future phases, and it invites suggestions for improvements.
‘Feedback received indicates that the NHT model is seen as an innovative and helpful response to affordable housing pressures, with wider recognition of its value in unlocking stalled sites and protecting jobs,’ the paper says.
‘The availability of a Scottish Government guarantee was particularly welcomed by councils as a way of ensuring that they could repay any money they borrow to fund the initiative without recourse to council funds.’
The paper says that the initiative has also been welcomed by developers for providing creative leverage and borrowing opportunities and for helping them meet affordable housing obligations attached to planning consents.
The consultation runs to August 19.
