skye homes

Fewer than half of Scottish Government’s pledged rural homes built

The Scottish Government has built fewer than half of the houses promised in rural areas and islands more than four years after funding of £30m was announced.

The Rural and Island Housing Funds (RIHF) were supposed to deliver up to 600 homes between 2016 and 2021 but, to date, just 203 have been approved. Both funds are due to close next year, with approved projects to be completed by March 2021.

The Scottish Greens described the situation as “disappointing” and called for formal evaluation of the schemes “to see where it went wrong.”

Two organisations that have made extensive use of the scheme called for it to be continued beyond 2021 despite the failure to meet existing targets, arguing that “momentum has now developed” and warning against “putting communities right back to square one.”

Data obtained through Freedom of Information requests shows that only 157 homes have been approved through the Rural Housing Fund, with just 62 completed, since it was launched in February 2016.

At the time, the Scottish Government claimed that the scheme would lead to the construction of “an estimated 500 new affordable homes.”

An island Housing Fund was also launched in September 2016 with a goal of providing “up to 100 affordable homes” across Scotland’s island communities. To date, 46 have been approved with just nine completed. Another nine homes are currently awaiting approval.

The £25m Rural Housing Fund and £5m Island Housing Fund can be used for the provision of new build, refurbished and converted homes. Only organisations are able to apply for funding, and projects must meet six qualifying criteria in order to be eligible.

Scotland’s rural housing crisis has been under the spotlight for many years. However earlier this month community leaders in the Hebrides and Skye warned that rising house prices were leading to “an economic clearance” that was threatening the sustainability of the islands.

Up to 40 per cent of housing stock on some of Scotland’s islands are holiday homes and while the availability of affordable properties for young islanders had been a long-running problem, it is expected to worsen post-lockdown.

In July 2019, The Ferret reported that neither rural funding scheme was on track to meet the government’s aims – at this stage, only 80 homes had been approved through the Rural Housing Fund while the Island Housing Fund registered just 14 approvals.

As of August 2020, 31 per cent of the Rural Housing Fund target has been met, with 37 per cent of the budget having been spent. Around 70 per cent of the Island Housing Fund has been allocated but just 46 per cent of targeted homes have been provided.

A total of 33 projects have been approved under the Rural Housing Fund, with the largest being 12-home developments in Drumnadrochit, Findhorn and Fort Augustus. The largest project approved via the Island Housing Fund is on Skye where 11 homes are due to be built at Kilbeg.

This fund was welcomed by rural and island communities where the lack of housing is well documented, so it’s very disappointing that currently less than half of the 2021 target has been reached.

john finnie, Scottish greens

The Scottish Government was asked to release details of an analysis of the funds’ success, set to take place in 2019-20, but officials confirmed that there has been “no formal evaluation of the fund and there are no documents to release on the overall success of the fund so far.”

Scottish Greens rural spokesperson John Finnie MSP said: “This fund was welcomed by rural and island communities where the lack of housing is well documented, so it’s very disappointing that currently less than half of the 2021 target has been reached. Given this outcome, it would be good if some kind of formal evaluation takes place to see where it went wrong.

“We should also look at where things have succeeded. For example, over 1,000 Croft House Grants have been awarded in some of Scotland’s most remote communities, so there is much to learn from that. Targeted funds need to be flexible so that communities in rural areas are empowered to lead decisions themselves, responding to local housing needs and ensuring that they are well-served by amenities and public transport.”

Ronnie MacRae of the Communities Housing Trust (CHT) told the Ferret that “the important thing is to protect the confidence and demand that has grown in a very large number of rural communities.” The CHT has supported many of the successful applications to the Rural and Islands Housing Funds and directly delivered 43 of the 203 houses approved so far.

It would be devastating for rural communities and development in general as well as for organisations such as ours if [the Rural and Island Housing Funds] did not continue.

Ronnie MacRae, Communities Housing Trust

MacRae added: “After many years of working with unreliable and short term funding packages it would be devastating for rural communities and development in general, as well as for organisations such as ours, if RIHF did not continue.

“It would be equally devastating if it changed significantly and lost the confidence of the extremely large number of communities that have now committed to housing developments because of the confidence gained from having the RIHF.”

This position was echoed by Mike Staples of the Dumfries and Galloway Small Communities Housing Trust, which has also supported a number of successful applications to the Rural Housing Fund (RHF).

“Communities who have delivered via RHF have gained confidence and want to do subsequent – and often larger, more complex – projects,” he said.

“Other communities are witnessing success and are seeking to emulate as the wider issues of rural housing demand in low-wage economies becomes more acute.

“One key element of the current RHF has been its flexibility. Communities have taken up the mantle around challenging projects that are not attractive to other housing suppliers. To this end, RHF has facilitated development in empty homes, difficult sites, change of use in problematic or derelict buildings and remote locations.”

The Scottish Government did not comment on missing the Rural and Island Housing Fund goals, instead pointing to the homes delivered under the Affordable Housing Supply Programme.

Housing minister Kevin Stewart said: “The £30 million Rural and Islands Housing Funds were specifically created to support additional rural and island affordable homes – and are part of the record investment of more than £3.5 billion over this parliamentary term, that funds the wider Affordable Housing Supply Programme.

“The funds are demand led and were created by working closely with a rural housing stakeholder group. They have successfully provided much needed housing in rural and island areas.”

He said that a recent Scottish Land Commission report called the funds a “game changer” for rural housing development and that the Scottish Government was reviewing how the funds had operated and listening to feedback.

The Scottish Land Commission report pointed out that the expiration of funds such as the Rural and Island Housing Funds in March 2021 was “creating a great deal of uncertainty in the rural housing market.”

The Commission called this uncertainty “debilitating” and argued that a “long-term, stable funding regime would be significant in enabling more homes to be delivered.”

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