Chamber and committees

Yes, and we monitor that carefully. As you will be aware, the housing system for Ukrainian displaced persons is a bit separate. They have the welcome accommodation and then we try to get them into host accommodation. There are also opportunities for accommodation in the private rented sector and the social rented sector.

A lot of work is going on, and £50 million has been made available to local authorities to provide new accommodation in refurbished and repurposed properties. We have had a good response from a number of local authorities. The latest is 500 units in Aberdeen that needed refurbishment and had been seen as surplus to requirement. We are trying to keep that housing stream a bit separate to create additional capacity, but we need to keep a close eye on it.

It is really important that the opportunity for host accommodation is continued beyond six months. There have been a number of changes in who is in charge of the programme in the United Kingdom Government. My colleague Neil Gray has sought urgent discussions about the importance of ensuring that we are able to keep hosts beyond the six-month point. English local authorities are really concerned about the matter as well. We do not want people to end up coming out of host accommodation and presenting as homeless. It is really important that that does not happen, so it is crucial that hosts can continue to host while people are supported into more settled accommodation.

All of those things are linked.

The action plan has to address all those issues. The key stakeholders have been clear and have been informing the development of the plan by raising the issues that you have just articulated and others and setting out what needs to be done. It is about trying to reduce as much as possible the timelines that I talked about earlier when it comes to getting projects from inception through to having spades in the ground, and it is about the capacity to provide support for local communities—and the myriad other issues that we know the plan needs to resolve.

Having said that, it is reassuring that we are seeing more affordable homes coming through in rural and island communities. The 25 per cent increase that was delivered in 2021-22 compared to 2020-21 is cause for optimism that things are improving, although that comes with all the caveats about peaks and troughs. The plan will absolutely help to keep the momentum going. It is important that we listen to organisations such as Community Land Scotland and make sure that the plan addresses the issues that they raise.

Given the backdrop of all the pressures that we heard about from labour costs and supply costs, I am quite comfortable with the figures. For a while, when I saw Brexit, Covid and global factors all pressing on costs for projects, I worried about whether projects would continue to come in under benchmark, to be honest. That half are still under benchmark—although there is a bit of geographical variation in the figures—is perhaps a better position than I might have envisaged, given all the pressures. We need to keep an eye on things, but that is not a bad position to be in at this moment. What is crucial is that we still have the flow of projects to keep momentum going on the programme.

As you said, the issue was quite contentious—local authorities strongly said one thing and RSLs strongly said another thing. The revised benchmarks struck the right balance, because they represented a significant closing of the gap between the council and RSL baseline benchmarks. As you pointed out, the differential exists because of the difference between the borrowing opportunities that are still open to councils and those for RSLs when delivering the programme, which it would be wrong not to recognise.

That is where we landed, on getting the balance. We acknowledged that there was an argument for closing the gap but said that there should still be a differential, given the borrowing position. Given the continued pressures on the social rented sector and RSLs, that was probably the right decision, but we will keep that under review and continue to listen to all representations. I am comfortable with where we are.

Whether it is capital moneys or resource moneys, the Scottish budget is constantly under pressure—and increasingly so. However, the affordable housing supply programme is a key priority for capital spend for the Scottish Government, so I am therefore confident about its position in any capital spending review.

That said, we have to be innovative and look at other ways of growing the pot. I have just rehearsed some of that. We need to get the biggest bang for the bucks. The pressures that we have talked about over the past hour or so can all reduce the value of what we get for that £3.6 billion, of what is raised by RSLs and of local authority contributions. It all shrinks as costs go up, so we have to be front-footed and look at what other finance we might be able to lever in to take account of that. We can perhaps use some of the innovative thinking to deal with the troughs.

I am happy to keep the committee updated on the work of the finance group, as we go forward.

We are trying to get the right expertise round the table to look at what else we might do in that space.

As I have said, it is borne out of the strategic housing plans from local authorities and consultations with local authorities and registered social landlords. The target must be ambitious and it must be deliverable. There is no point in our plucking a target out of thin air that is not deliverable. We have had calls to go further, but whatever we do must be deliverable. The 110,000 target, of which 10 per cent will be rural housing, is stretching, not least in the current climate of cost pressures.

It is important that we have a stretching target. Our target is fit for purpose, but we must keep it under review. The midpoint will be important in assessing the progress towards the target.

I should also say that the target is not one that will be met by breaking it down into individual years, with the same number of homes being delivered each year. The challenges and the costs will change so the target will be met in peaks and troughs as we moved towards 2032. The midpoint is important in letting us see what progress is being made and whether there need to be changes at that point.

It was important for fairness that the approach should apply to both the private and social rented sectors, because it will set the framework for anything that happens after March. We are looking at six months in this context, but we are putting in the levers for what might happen beyond those six months.

It is important that the social rented sector looks at what it can do to support tenants—as it has already done and will continue to do. Every time that I have had a meeting with the social rented sector, whether that was with individual RSLs or the SFHA, I have been struck by people’s absolute determination to support their tenants. They do that by minimising rent increases, making sure that tenants are aware of and supported through any rent arrears that they have, and avoiding eviction, which is very much a last resort. The social rented sector is doing all that and will continue to do it, and that is important.

Of course, Government has taken other action to support the sector and tenants directly through increased support through discretionary housing payments and the ability to consider not just rent arrears but support for energy costs through that mechanism. There is also the tenant grant fund, which we are pivoting towards dealing with the cost of living, and we will keep that under review in the emergency budget review. We are considering how we can support tenants to avoid rent arrears and to tackle rent arrears when they arise. That is not the only action that we are taking—there are many other supports as well.

Brexit, alongside a number of other issues, is having an impact. It has had a direct impact on labour supply and on materials at a time when such issues are being exacerbated, as we are aware, by global supply issues, such as the war in Ukraine, and Covid. All of those things have created a very difficult environment.

We have been working with the construction sector. Ivan McKee has been leading work around support for the construction sector. Those factors are global factors and it is very difficult for the Scottish Government to resolve them ourselves, but we can look at, for example, the development of local supply chains. We can consider the importance of small and medium-sized enterprises in Scotland in how we create more local supply chains. That will not happen overnight, but it is important that we look to do that in order to have more stability in the system. If we can get that stability and resilience in those local supply chains, the system will not be as buffeted in the future. That comes back to looking at local timber supplies, off-site construction—all the things that can perhaps help us to be less reliant on global factors.

It is a really challenging time for the construction sector. Having said that, projects are still coming in. On the costs of those projects, around half are coming in under benchmark and half are coming in over benchmark. The good news is that projects are still coming in and they are still being approved. That means that we are still getting shovels in the ground, to help towards that affordable housing supply programme target.

I will bring Alastair Dee back in.