Page last updated at 00:15 GMT, Saturday, 12 September 2009 01:15 UK

'Black hole' for housing budget

Houses on new estate
Demand for affordable homes is "extremely" high

A budget "black hole" is looming for public spending on housing, according to the Scottish Federation of Housing Association (SFHA).

The SFHA urged ministers to act to protect "a vital area" of investment.

It said £675m was being spent this year on affordable housing but some funds were brought forward from future years, leaving a £490m budget for next year.

The Scottish Government said it had invested record amounts on affordable housing over its time in office.

The SFHA said the problem had intensified as housing associations have been asked to pay upfront to fund housing schemes, but would only receive grants in future years.

There is a danger that affordable house building ... will fall significantly
Jacqui Watt
SFHA chief executive

The organisation has argued that 10,000 new affordable homes are needed in Scotland each year.

Chief executive Jacqui Watt said: "The SFHA commends the Scottish Government for reacting to the recession by bringing forward £120m to kick-start affordable house building.

"But that money can't be spent twice and housing associations are now facing gaps opening up in their budgets for 2010-11 and beyond.

"There is a danger that affordable house building, which has been bridging some of the gap created by the slump in private developments, will fall significantly at a time when demand for homes, especially affordable homes, is extremely high.

"Scottish ministers need to act now to protect a vital area of public investment, one which supports communities and the economy."

'Record investment'

The call has been backed by the Liberal Democrats. MSP Jamie Stone said: "SNP ministers keep on boasting about their record investment in affordable housing.

"But the money they've brought forward so far is accelerated funds that will have to be paid back."

A spokesman for the Scottish Government said it had put record amounts into affordable housing, totalling more than £1.5bn over three years.

He said: "Our early response on accelerating funding for affordable housing, in conjunction with our local authority partners, is bringing forward £120m and has allowed local authorities and registered social landlords to plan early and maximise the benefits from this additional resource at a difficult economic time.

"The tough times we continue to face mean that the Chancellor should use his Pre Budget Report this autumn to allow the Scottish Government to further accelerate the capital budget into 2010-11 from the following year."

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