Scottish Budget will deepen housing crisis, warns industry body

Homes for Scotland spoke out as the tax and spending plans were passed in Holyrood

Scottish Budget will deepen housing crisis, warns industry body

The housing crisis in Scotland will deepen as a result of the Scottish Budget, an industry body has warned, as the SNP and Green MSPs voted through tax and spending plans in Holyrood that were described as “fatally flawed”.

Opposition politicians branded the Budget “chaotic and incompetent”, but ministers blamed the UK government for cuts. The Budget will see tax rises for middle and higher earners, while spending in areas such as affordable housing will be slashed.

Fionna Kell, director of policy for Homes for Scotland, which represents around 200 construction companies, criticised the £200 million cut to the affordable housing supply programme, as well as cuts to the planning budget and the housing and building standards budget.

She said: “Whilst we welcome the deputy first minister’s [Shona Robison] commitment that housing will be treated with priority should further funds become available as a result of announcements by the Chancellor next week, the Budget passed today will only serve to deepen the housing inequality being felt across the country and risks losing the significant socio-economic benefits that come through increased home building across all tenures.

“The cuts come at a time when multiple local authorities have declared housing emergencies and recent independent research has shown that there are 693,000 Scottish households facing at least one form of housing need. Instead of cutting housing budgets, now is the time to maximise the wide-ranging socio-economic benefits offered by ensuring Scotland has the homes it needs to meet the needs of its people.”

Speaking in Holyrood, Ms Robison, who is also the finance secretary, insisted her priority had been “to protect our frontline services” as she told MSPs that Westminster’s “failure to invest in public services and infrastructure” had created a “fiscal challenge” for Holyrood ministers.

She said: “It is unclear to me how the UK government intends to provide the infrastructure or investment in capital that creates long-term sustainable economic growth when it is hell-bent on returning to a new age of austerity.”

Ms Robison also warned of the possible “danger” from Chancellor Jeremy Hunt’s Spring Budget next week. She said it was “absurd” that Holyrood was finalising its tax and spending programme for the coming year “when in a week, large parts of it may be impacted by the choices of the UK Chancellor”.

She urged Mr Hunt to increase the Scottish Government’s capital spending budget on March 6.

Labour’s finance spokesman Michael Marra said the “chaotic and incompetent Budget” from the Scottish Government was “based on the economically and fiscally illiterate assumption that income tax can be used to plug the hole left by the SNP’s failure to grow the economy”.

Scottish Conservative finance spokesperson Liz Smith said the Budget “does nothing” to boost jobs, investment or economic growth and instead offers people “higher taxes and reduced public services”.

Campaigners at Oxfam Scotland said efforts to tackle poverty could be put into reverse by the plans.

Jamie Livingstone, the charity’s head, said: “This deeply disappointing and disjointed Budget risks bringing to a screeching halt – and if anything, throwing into reverse – action to tackle poverty.

“The potentially poverty-busting gains made through fair income tax increases for the richer are being wasted on a simultaneous backhander to the better off through the intended council tax freeze.

“It’s an alarmingly muddled misstep that’s fundamentally flawed.”

The Budget was passed just hours after it was revealed the number of open homelessness cases in Scotland had hit the highest level on record.

Government statistics released on Tuesday revealed 30,724 live applications were recorded on September 30 of last year – an increase from the previous high of 30,129 in June last year. Compared with the same period the previous year, the number of unresolved applications had increased by 10 per cent.

On September 30, 9,860 children were in temporary accommodation in Scotland – a slight fall from June 30, but an 8 per cent increase compared to the same time the previous year.

The number of people who applied for homelessness assistance between April and September last year having slept rough the night before was also the highest since at least 2020, at 888 – an increase of 23 per cent from the same period the previous year.

Applications from people who reported having slept rough in the past three months was 1,408 – a 20 per cent increase from the previous year.

Shelter Scotland Director Alison Watson said: “The Scottish Government’s strategies for housing and homelessness are failing and any attempt to say otherwise is starting to feel like an attempt to gaslight the Scottish public.

“The Scottish Government can’t claim to be determined to fight poverty while presiding over record homelessness, repeatedly deprioritising housing in its spending choices, and ploughing ahead with a strategy which today’s figures once again clearly show isn’t working.

“Local authorities are breaking the law on an industrial scale every day and yet there’s no new plans, no new money, and no new leadership to meet the scale of the emergency.”

Ms Watson added: “The ongoing housing emergency in Scotland was not inevitable, it is a result of poor political choices and serious mismanagement across every tier of government. Anyone who backed that budget can’t expect to be taken seriously in the future when they claim they’re fighting homelessness.”

Matt Downie, chief executive of the charity Crisis, said it was “deeply worrying” to see a rise in rough sleeping, and he urged the Scottish Government to take action through its coming housing Bill.

Housing minister Paul McLennan described the figures as “sobering”, adding they “demonstrate the challenge we face in tackling homelessness, which has been made worse by the UK government’s Local Housing Allowance freeze, cuts to the Scottish Government’s budget and the bedroom tax”.