Page last updated at 23:06 GMT, Thursday, 28 May 2009 00:06 UK

Council cannot meet home demands

Bricks being layed
Highland previously revealed a wish to build council houses again

Highland Council cannot meet demands from the public for affordable homes because of a lack of government funding, councillors have claimed.

The local authority now intends to increase the pressure on the UK and Scottish governments to put more money into low-cost housing.

It said funding for the provision of such properties will fall from £40m to an anticipated £26m in 2010-11.

The housing and social work committee said the future was not looking bright.

We are going to have to put a brake on building
Margaret Davidson
Committee chairwoman

Committee chairwoman Margaret Davidson said: "It is nothing short of a miracle that we will be able to provide 470 affordable homes this year in the Highlands.

"But as the year unfolds, we are going to have to put a brake on building. We know how tight money is and we know it will get tighter."

She added: "Our plea to the Scottish Government is that they must give a higher priority to housing and invest in areas, such as Highland, that are experiencing sustained and very real housing pressures."

The committee has agreed that the authority should continue prioritising the use of council tax revenue from second and holiday homes for part funding of high cost rural projects in areas of housing need.

Highland Council previously said it wants to build houses again, but could not afford to take part in a government scheme aimed at encouraging authorities to do so.

The authority said it did not make "financial sense" until it reduced its high loan debt.

It said the Scottish Government subsidy available would, "at best", cover about 20% of supplying new council houses.

However, the equivalent housing association grant subsidy would be nearer 70%.

In February, a delegation from Highland Council met a senior Treasury official in Westminster about easing its £146m housing debt.

The local authority is spending £15m a year on loan charges to service that borrowing.

It has said that if the UK Government "eased that burden" it could commit more money to improving housing stock.

Earlier this month, MSPs said the creation of much-needed housing in Scotland's countryside has been held back by an over-cautious planning culture.

Holyrood's rural affairs committee said more needed to be done to address the shortage of homes.

Allowing councils to levy higher taxes on second homes was among recommendations to increase supply.


Highland Housing Alliance (HHA) was held up as a model of best practice in tackling the problem.

HHA is a not for profit development company set up with the aim of building more new affordable and private houses for people in the Highlands.

It works with housing associations, landowners and private developers to try and make sure as many housing sites as possible are used for new homes.

One of its main interests is promoting housing for people who are priced out of many new build and second hand properties, but who have little chance of a traditional public sector rented house because of demand.

The rural affairs and environment committee was responding to a Scottish Parliament report which suggested the planning system was burdened by a centuries-old belief that the countryside should be protected from development.

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