Scottish Budget member briefing - December 2023

Scottish Government budget 24–25

On Tuesday, Deputy First Minister and Cabinet Secretary for Finance Shona Robison delivered the Scottish Government budget 24–25 (Scottish Budget: 2024 to 2025 - gov.scot (www.gov.scot)).

In stark contrast to the Scottish Government’s stated aim in this budget to provide further support to those in greatest need, we are alarmed to see an unprecedented cut to the affordable housing budget at a time when we urgently need to deliver new homes. Rather than asking those with the broadest shoulders to carry the load, it is those most in need of our support and affordable housing that risk being left behind.

The Affordable Housing Supply Programme (AHSP) budget has dropped from £752 million in the Scottish Government’s original 23/24 budget to £556 million for 24/25: a reduction of 26%. This represents a decrease of £196.1m (26%) made up of a decrease of £74.7m capital (16%) and a decrease of £121.4m (71%) in financial transactions.

Prior to the Budget, we briefed key MSPs on the priorities of the social housing sector over the next year, none of which have been acted on.

We had called on the Scottish Government to urgently prioritise the delivery of social homes, address the erosion of the AHSP budget through inflation and adequately fund the AHSP budget to reflect the level of need. To achieve this, we called on Scottish Government to reinstate the £700m lost to inflation.

The target of delivering 110,00 affordable homes by 2032 – part of the Scottish Government’s long-term strategy of Housing to 2040 is now at real risk without the adequate funding of the affordable housing supply programme.

Currently, 250,000 people sit on waiting lists for social housing, and separately almost 10,000 children are living in temporary accommodation. Tackling child poverty is the defining mission of the Scottish Government. We know social homes protect people against poverty and are at greater risk now of failing to meet the Scottish Government’s statutory targets on child poverty.

We also made asks to the Scottish Government to protect tenants by bolstering devolved winter heating benefits and committing to funding the Fuel Insecurity Fund until the end of this Parliament in 2026. Instead, the Scottish Government have pulled the plug on the Fuel Insecurity Fund at a time of continued higher energy costs and cost of living challenges.

The Scottish Government have noted that one of the most difficult choices they have taken is to reduce the funding for their Affordable Housing Supply Programme and have issued a full stakeholder response (in Annex 2 below).

Responding to the announcements, Conservative spokesperson for Social Justice, Housing and Local Government, Miles Briggs MSP, raised the cuts to the housing budget and pressed on the delivery of affordable housing.

Scottish Labour echoed our concerns while Leader of the Scottish Liberal Democrats said that at a time of a housing emergency this was the wrong time to be cutting the housing budget.

The Cabinet Secretary also outlined tax changes and a new income tax band will be created for those earning between £75,00 and £125,140. The top rate of tax levied against those earning more than 1% will also rise by 1% next year to 48%. The three lowest rates will see no increase while the starter and basic rates will increase by inflation. On Council tax – the government advised they will “fully fund” a council tax freeze and councils will be given £144m in extra funding equivalent to a 5% rise.

On Child Poverty, the Scottish Child Payment will rise from £25pw to £26.70 from next April. This isn’t a specific policy decision as the Scottish Government is legally obliged to uprate social security in line with inflation.

SFHA will continue to work with MSPs from all parties as the budget process progresses to make the case for an independent sector with strong government support.

We hope you find this useful in explaining the 2024-25 budget position.

Contact

For any further information, please contact our Director of Public Affairs and Communications, Carolyn Lochhead: Clochhead@sfha.co.uk

ANNEX A - Budget Table

Our budget table below demonstrate all the important developments in the 2024/25 budget.

	Budget 24/25	Additional information
Supply
Affordable Housing Supply Programme	£556m (26% reduction)	The overall Affordable Housing Supply Programme available stands at £556m once financial transactions and the Transfer of Management funding are taken into consideration.
Housing Support and Homelessness	£62.8m (3% reduction)	Scot Gov advise reduced funding for the adaptations programme reflect overall capital pressures. This is likely to lead to a reduction in the number of adaptations that can be taken forward. Scot Gov advise some Registered Social Landlords may fund adaptations for disabled tenants from their own resources. Also in individual cases where supporting adaptations helps meet local health priorities, some resources may be available from Integrated Joint Boards. They note the reduction in the homelessness budget reflects budgetary pressures across Scottish Government.
Discretionary Housing Payments	£90.5m allocated for Discretionary Housing Payments (increased 5% from £85.9m)	Funding for Discretionary Housing Payments to mitigate losses as a result of the ‘bedroom tax’. Also supports delivery of commitment to mitigate the Benefit Cap as far as possible.
Building Standards	£2.4m (increased from £1.3m)	Funds a programme of research and professional advice to ensure the Building Standards system in Scotland delivers its regulatory requirements and supports the creation and renewal of safe and sustainable buildings that stand the test of time.
Cladding Remediation	£41.3m (increased by 42%)	The budget underpins the delivery of the Cladding Remediation Programme which supports homeowners within scope affected by unsafe cladding on their buildings and the Housing (Cladding Remediation) (Scotland) Bill published by Parliament in November 2023.
Fuel Poverty and Housing Quality	£1.6m (92% reduction)	To tackle fuel poverty and improve quality of Scotland's housing, which will also support our targets on climate change. Scot Gov advise the Fuel Insecurity Fund was for 2023-24 only and has been scrapped.
Social Security	£6.2b overall spend (increase 20%) £3.2b Adult Disability Payment (replacement of Personal Independence Payment) (increase 20%) Scottish Welfare Fund at £41m (0% change)