The Scottish Government is failing to meet targets to boost the number of affordable homes for rural and island communities, according to documents obtained by The Ferret.

Ministers promised three years ago that a £25 million rural housing fund would provide 500 new homes by 2021. But only 80 have been approved so far and, of them, just 23 have been built.

Ministers also said that a £5 million islands fund would provide 100 new homes by the same date. But only 14 have so far been approved of which just four have been completed.

Campaigners say excessive bureaucracy, lack of support, tight time frames and restrictive regulations have prevented communities from making use of the funding. Ministers have been urged to “match their stated ambition” for affordable homes in rural and island areas.

Claim that 200,000 people are waiting for affordable housing is Half True

The £30 million rural and islands housing funds were both launched in 2016. They were initially designed to cover three years but were extended to five years, with all approved projects to be completed by the end of March 2021.

The purpose of the funds is to increase the number of new homes where they are needed for local people. They are primarily available for capital support but also offer smaller contributions towards feasibility studies.

Funds can be used for new build, refurbishments and property conversions. Organisations are only able to apply for funding if projects meet six qualifying criteria.

These include having identified a specific site or property, being located within particular geographical areas and having the support of the relevant local authority.

Government officials insisted that the funds have “no target”. But when they were announced in 2016 ministers stated how many new homes they were aiming to build.

The rural housing fund would “provide an estimated 500 new affordable homes”, they said, adding that the islands fund would mean “up to 100 affordable homes will be delivered in island communities.”

Data released by the government under freedom of information law shows that neither of the funds are on track to meet the government’s aims. Less than one fifth of the number of new homes promised have so far been given the go ahead, and less than five per cent have been built.

Just 80 homes have had money from the rural housing fund, with a single-home project in South Lanarkshire currently awaiting approval. Less than £5m of the £25m fund has been allocated and, according to the Scottish Government’s online list, only 23 homes have been completed.

One proposal to provide 12 homes in Moray was approved but is now being revised, while plans to fund a further 12 homes – 10 in Dumfries and Galloway and two in the Scottish Borders – were withdrawn after approval was granted. One proposal, described as a “speculative application”, was rejected.

Only 14 homes across seven projects have been approved under the islands housing fund, accounting for just over £1m of the £5m fund. One previously approved application is currently being revised while another is being “reworked following feedback.” The government lists four houses as “complete”.

The Scottish Government was asked to release “any documents evaluating, considering or discussing the success” of the two housing funds. But officials said there were no such documents and advised that evaluations of the funds were planned for 2019-20.

It’s clear that the targets set are being missed and are denying people living in rural Scotland the chance to live in good quality and affordable homes. Andy Wightman, Green MSP

The Scottish Greens called on ministers to do more to support rural communities. “These figures are deeply disappointing and should be a wake-up call to the Scottish Government,” said the party’s housing spokesperson, Andy Wightman MSP.

“While the initial news of funding was welcome, it’s clear that the targets set are being missed and are denying people living in rural Scotland the chance to live in good quality and affordable homes.”

Wightman added: “It’s time for Scottish ministers to match their stated ambition with real funding to deliver the housing rural Scotland so desperately needs and deserves.”

The charity, Rural Housing Scotland, argued that changes were needed to remove “substantial barriers” that prevented communities from using the funds. Help was needed to access support for grant applications and project development, to access land and to cover high infrastructure costs such as roads.

“We know that despite the apparent limited take up of the funds that the need for rural housing across the country is substantial and that many rural communities are very willing to develop housing projects where the financial and practical support to help them is available,” said Rural Housing Scotland’s chief executive, Derek Logie.

“We hope that the rural and islands housing funds continue but will have greater flexibility to encourage more communities to bring forward projects and will fund more support for communities.”

Logie pointed out that his organisation had worked with communities to access funding. Further “substantial applications” were currently being planned in Braemar in Aberdeenshire, Dervaig on the island of Mull and Ettrick in Scottish Borders.

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The Dumfries and Galloway Small Communities Housing Trust has also supported a number of successful and ongoing applications. “We need to be very clear that the obvious shortfall is not being caused by a lack of demand,” said chief executive, Mike Staples.

“It is absolutely imperative that there is a fund for community led housing and rural housing available from the Scottish Government. Our experiences of this fund have been positive thus far.”

But he added: “There are, however, a few key barriers. One critical element is simply the pace of community-led development – the process tends to take a long time, specifically in terms of taking control of the land or a particular building.

“The process is also complex and effectively mirrors a housing association application. There exist specific trusts to provide support in the Highlands and Dumfries and Galloway and they have been important in facilitating applications, but these groups need to be supported by the Scottish Government.

“Another issue is that projects need support from local authorities. We have had that support from our council but that is not necessarily the case in other areas and can be a major barrier.”

Scottish Land and Estates, which represents landowners, urged “greater flexibility” in the funding schemes. “Unfortunately, concerns exist over the ability of the current scheme, the rural and islands housing funds, to deliver new long-term affordable rural housing,” said the group’s executive director, Sarah-Jane Laing.

“Those who have applied to the scheme have found that homes must be leased at affordable rates in perpetuity, which goes beyond the lifespan of the house and is often considered unworkable.”

She added: “An additional concern for members is a clawback clause where the government reserves the right to ask for the money to be paid back immediately. Despite assurances that this is unlikely to be triggered, the limited definition around this clause has led to a lack of confidence in the scheme.”

We are continuing to listen to understand any specific local barriers to housing delivery and to set out the support available from the Scottish Government. Kevin Stewart, Scottish housing minister

The Scottish housing minister, Kevin Stewart, stressed that the rural and islands funds were part of wider housing policy to increase supply of long term affordable housing in rural Scotland. “We recognise the complex nature of rural housing projects so the timescales for these funds were extended from the initial three years to five to allow as many projects as possible to come forward,” he said.

“We continue to assess project applications to the rural and islands housing fund which can deliver affordable homes by March 2021 and these homes will contribute to the Scottish Government’s overall target of 50,000 affordable homes by 2021. We are on track to deliver that over this parliament, which will include 35,000 homes for social rent.”

Stewart added: “Collaboration and close working between the Scottish Government and all local authorities, including for rural areas, is critical to the delivery of affordable homes across Scotland. We are continuing to listen to understand any specific local barriers to housing delivery and to set out the support available from the Scottish Government.”

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