The 2023/24 Scottish Budget represented a crucial opportunity for the Scottish Government to show that it’s serious about reducing affordable housing need and tackling the backlog of thousands of homeless households living in limbo in temporary accommodation. Unfortunately, it has failed to seize that opportunity and, in our opinion, is failing to grasp the seriousness of Scotland’s housing emergency and its impact.

TL;DR: By our calculations, we can see a significant 16% year-on-year cut (£112.8m) to the housing capital budget in 2023/24, which has the potential to completely derail the Scottish Government’s ability to reduce housing need in this parliamentary term. We think this choice is the wrong one in a worsening housing emergency.

The Scottish Government’s approach to the budget doesn’t recognise how central housing is to so many aspects of our society – including health, education, child poverty, and meeting our net-zero targets. The Scottish Government often talks about living up to the preventative ambitions outlined in the Christie Commission, yet choosing not to invest enough in social housing damages health and education and will leave children trapped in temporary accommodation for long periods of time.  It will also cost the government more in the long term.

For those of you who have campaigned with us for a while, we have consistently called on the Scottish Government to acknowledge the urgency of the housing emergency. The issues are well-documented – not only rising inflation, the illegal invasion of Ukraine, the ongoing impact of the UK government’s disastrous ‘mini-budget,’ supply chain disruption, and the consequences of Brexit, but also the cost-of-living crisis and record numbers of homeless children struggling in temporary accommodation. The Scottish Government can make the choices required and take action to tackle these housing challenges head-on. It is disappointing that they have chosen not to.

As the Scottish Budget progresses through its various stages of scrutiny before it’s finalised, we are calling on the Scottish Government to:

  • Reverse its planned cuts to the housing capital budget to ensure 38,500 social homes are delivered by 2026 to reduce housing need.
  • Prioritise funding in the Affordable Housing Supply Programme exclusively to deliver homes for social rent and introduce a national acquisition programme.
  • Fully fund local government and local homelessness services, including carrying out a full audit of existing homelessness spend
  • Create a new Homelessness Emergency Fund to direct money where it is most needed.
  • Guarantee the right to a home for everyone experiencing homelessness.

Here’s the techy bit.

We are really concerned about the 16% year-on-year cut to the housing capital budget in 2023/24. Cuts to the budget for social housing at a time when rising costs and inflation are already eating into the spending power of local authorities and housing associations will prove disastrous for attempts to build the social homes we urgently need in Scotland.

Capital Investment in Affordable Homes through the Affordable Housing Supply Programme (AHSP) Budget £m 2022/23 Budget 2023/24 Draft Budget (15 December) Difference
Capital 601.81 489.02 -112.8
Transfer of Management of Development Funding (TMDF) 92.2 92.23 0
TOTAL (Capital plus TMDF) 694 581.2 -112.8 (-16.2%)

We acknowledge the current challenges in meeting social housebuilding targets across Scotland – that is why we’ve already offered creative solutions to the Scottish Government in our Social Housing Emergency Action Plan to help ensure the social homes we need are still delivered:

  • redirect all public subsidy in the AHSP exclusively to homes for social rent
  • develop a national acquisition programme to increase the supply of social homes
  • reverse the cuts announced in the draft budget, which will prove doubly devastating for the delivery of social homes in the current inflationary environment.

So what does Scottish Government say?  It claims that the cut ‘only’ amounts to 4.7%. We believe this claim to be inaccurate.

Scottish Government calculations:

Affordable Housing Supply Programme (AHSP) Budget £m Previously planned (Capital Spending Review) 2023/24  15 December Draft Budget 2023/24 Difference £m
AHSP – Cdel 543.570 489.100 -54.570
Transfer of Management of Development Funding (TMDF) 92.245 92.245 0
AHSP – Financial Transactions 153.000 170.600 17600
TOTAL AHSP 788.815 751.945 -37.320 (-4.7%)

The government’s figures do not compare budget-to-budget but instead compare previously planned spending for 2023/24 in the Capital Spending Review with the draft Budget 2023/24. This is a comparison of two potential cuts rather than a year-to-year change.

The Scottish Government’s calculations also factor in types of funding that do not deliver social homes but the broader category of ‘affordable housing.’ We have been clear that this emergency requires a focus on the delivery of social homes, so that part of the budget is absolutely crucial. The Scottish Government has sought to reassure by saying that they are mitigating the cut with funding from Financial Transactions (which do not deliver social homes), funding from the zero-emissions heating budget (which do not deliver social homes but will improve the quality of those already being built), and funding from the Charitable Bonds scheme which we understand is part of the Financial Transactions budget. While a welcome addition, the Charitable Bonds scheme is no substitute for a 16.2% year-on-year cut to the capital budget for social homes. The Scottish Government must reverse this cut.

Now is the time for bold action, not taking our foot off the gas.  The Scottish Government can choose to finally prioritise ending homelessness. These cuts must be reversed – Scotland needs to build more social homes to tackle the worsening housing emergency.  More than 9,000 children without a home are counting on it. 

Email the Deputy First Minister John Swinney MSP to ask him to STOP the cut to social housing today 👉

1 Scottish Budget 2022/23, Table 5.03, p.40.
2 Draft Budget 2023/24, Table 5.03, p.45.
3 Draft Budget 2023/24, Table 5.11, p.48.