Blog: A budget for homes?



Rosemary Brotchie
Rosemary Brotchie

By Rosemary Brotchie, policy and research manager at Shelter Scotland

Amidst all the headlines about tax rates you’d be forgiven for missing the significance of this budget for the thousands of people across Scotland who are homeless or badly housed. With 150,000 people on local authority waiting lists and 4,896 children in temporary homeless accommodation the time to act on affordable housing is now.

So what are the implications of the Finance Secretary’s last budget before next year’s general election?

Increased funding for new affordable homes

Backing up the First Minister’s pledge to build 50,000 new homes over the course of the next Parliament, if re-elected, John Swinney yesterday committed £690m to housing investment, with an additional £90m for affordable housing. Shelter Scotland’s own research shows that we need to double affordable house building – from around 6,000 units per year to 12,000 – to meet need. This, then, looks like a welcome step in the right direction. But crucially, these homes must be genuinely affordable – with at least two thirds socially rented homes.

3 per cent increase on Land and Building Transactions Tax for second homes

This brings Scotland’s buy-to-let sector and market in second homes in line with England, following on from the UK Government’s Summer Budget. This could have a positive stabilising effect on the buy-to-let market in light of concerns raised by the Bank of England’s Financial Stability Committee in September. Given that this affects transactions only this cost should not be passed onto tenants.

Bedroom tax, the welfare fund and council tax reduction mitigation

Funding to cover bedroom tax arrears, the council tax reduction scheme (formerly council tax benefit) and the Scottish Welfare Fund are all essential and are very much welcomed.

The council tax freeze is continued

Given the continued council tax freeze and the squeeze on local government funding there is a very real risk that service delivery in key areas – such as homelessness prevention – comes under intense pressure. Local authorities are responsible for delivering Scotland’s world leading homelessness legislation, without the requisite funding to do this our progressive framework of legal rights could be undermined. Local authorities should have more flexibility locally with regard to how they raise revenue, an element of which should involve a tax on land or property.

Legal aid reduction

A cut to the overall legal aid budget also featured in this year’s budget. Legal aid is a fundamental pillar of the housing safety net in Scotland, without it people who are badly housed or homeless could be left unable to assert their legal rights. At a time when local government services are under pressure this vital protection is more important than ever.

Many of these changes will need to be analysed in greater detail to assess what the combined impact of this budget is. For now, signs are positive that government is seeking to close the gap between the need for affordable housing and actual delivery. However, question marks remain over how vital services for vulnerable people across Scotland will be funded long-term. But by this time next year we hope that thousands more people across Scotland can realistically look forward to a safe, secure and affordable home of their own.

@shelterscotland



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