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Homes for Scotland's People: A Scottish Housing Policy Statement

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HOMES FOR SCOTLAND'S PEOPLE: A Scottish Housing Policy Statement

SECTION 3 QUANTITY: MEETING SCOTLAND'S HOUSING NEEDS
OUR ACTIONS

WE HAVE INVESTED £1.5 BILLION IN THE DELIVERY OF MORE THAN 41,000 AFFORDABLE HOMES ACROSS SCOTLAND SINCE DEVOLUTION.

WE HAVE FUNDED OVER 8,300 AFFORDABLE HOMES IN RURAL AREAS AND RAISED THE RURAL SHARE OF THE HOUSING INVESTMENT PROGRAMME TO 28% - AN ALL TIME HIGH.

WE HAVE PUBLISHED A NATIONAL PLANNING FRAMEWORK TO ENCOURAGE LONGER-TERM DECISION MAKING AND INTRODUCED NEW PLANNING POLICIES TO ENSURE THE PLANNING SYSTEM SUPPORTS HOUSING AND LAND SUPPLY.

WE HAVE LEGISLATED TO ENHANCE THE STRATEGIC ROLE OF LOCAL AUTHORITIES AND TO ENSURE THAT EACH AUTHORITY PRODUCES A COMPREHENSIVE LOCAL HOUSING STRATEGY FOR THEIR AREA.

WE HAVE PROVIDED MAJOR FUNDING PACKAGES FOR NEW AFFORDABLE HOMES LINKED TO TRANSFERS UNDER THE COMMUNITY OWNERSHIP PROGRAMME - UP TO 10,000 HOMES IN EDINBURGH, 1,000 IN THE HIGHLANDS, AND 150 IN THE WESTERN ISLES.

WE HAVE MODERNISED THE RIGHT TO BUY SCHEME TO ACHIEVE A BETTER BALANCE BETWEEN THE NEEDS OF THE INDIVIDUAL AND THE NEEDS OF THE COMMUNITY.

WE HAVE BROUGHT EMPTY PROPERTIES BACK INTO USE, IN PART THROUGH THE EMPTY HOMES INITIATIVE WHICH RETURNED ALMOST 1,400 PROPERTIES TO USE BETWEEN 1999 AND 2002.

WE HAVE GIVEN LOCAL AUTHORITIES FLEXIBILITY TO RAISE ADDITIONAL INCOME FROM COUNCIL TAX ON SECOND HOMES FOR INVESTMENT IN AFFORDABLE HOUSING.

WE HAVE UNDERTAKEN A COMPREHENSIVE REVIEW OF HOUSING SUPPLY AND AFFORDABILITY IN SCOTLAND AND PUBLISHED OUR ANALYSES.

OUR PLANS

WE WILL INVEST UP TO £1.2 BILLION TO ACHIEVE A NEW THREE-YEAR TARGET FOR THE PROVISION OF 21,500 AFFORDABLE HOMES BY 2008.

WE WILL PROVIDE OVER 16,500 SOCIAL RENTED HOMES TO IMPROVE ACCESS AND CHOICE FOR HOMELESS PEOPLE AND PEOPLE ON HOUSING WAITING LISTS.

WE WILL EXPAND THE LOW COST HOME OWNERSHIP PROGRAMME BY 80% TO PROVIDE NEARLY 5,000 HOMES TO HELP FIRST-TIME BUYERS AND OTHERS ASPIRING TO A HOME OF THEIR OWN.

WE WILL PROGRESS OUR REFORM OF THE PLANNING SYSTEM WITH NEW LEGISLATION AND GUIDANCE TO HELP DELIVER THE HOUSES WE NEED, WHEN AND WHERE WE NEED THEM.

WE WILL INVEST IN STRATEGIC WATER AND SEWERAGE INFRASTRUCTURE TO REMOVE THE CONSTRAINTS AFFECTING ALL ESTIMATED NEW HOUSING DEVELOPMENTS.

WE WILL PROVIDE AN EXTRA £14 MILLION PER YEAR TO REFLECT THE COSTS OF LOCAL WATER INFRASTRUCTURE CONSTRAINTS AFFECTING AFFORDABLE HOUSING DEVELOPMENTS.

WE WILL SET A BENCHMARK IN NEW PLANNING ADVICE FOR 25% OF ALL NEW HOUSING DEVELOPMENTS TO BE AFFORDABLE HOMES, INCREASING CERTAINTY AND REDUCING DELAYS IN HOUSING DEVELOPMENT.

WE WILL FUND INNOVATIVE LAND BANKING SCHEMES AND WORK WITH OTHER PUBLIC BODIES TO STREAMLINE THE TRANSFER OF SURPLUS PUBLIC LAND FOR AFFORDABLE HOUSING.

WE WILL CONTINUE TO IMPROVE THE EVIDENCE BASE, PARTICULARLY LOCAL HOUSING ASSESSMENTS, AS A FOUNDATION FOR FUTURE HOUSING PLANNING AND INVESTMENT.

WE WILL PUBLISH A STATEMENT BY THE END OF THIS YEAR ON HOW WE WILL ENSURE THAT ALL HOMELESS PEOPLE WILL HAVE ACCESS TO PERMANENT ACCOMMODATION BY 2012.

OUR APPROACH

3 .1 The supply of housing - particularly affordable housing - is a key ingredient in shaping and creating local communities and neighbourhoods where individuals and families with different needs and different incomes want to live and work and where the private sector - shops, offices, businesses - wants to stay or invest.

3 .2 To achieve our vision that everybody in Scotland has a decent home to live in, regardless of their circumstances, it is vital that the housing market functions efficiently and that we intervene where necessary to help this happen. This means ensuring that changing housing requirements are clearly identified and influencing housing providers to respond to meet these requirements. This will ensure that the stock of homes in Scotland and the housing services provided are as close as possible to the requirements of the people and the economy in Scotland.

3 .3 Our reforms and investment since devolution are changing the landscape of Scottish housing but we should build this momentum further through investing in infrastructure, providing essential subsidy for affordable housing, ensuring a responsive planning system, strengthening partnership working across the public and private sectors and ensuring that the house-building industry and the public sector have the right skills to deliver.

3 .4 Local authorities have a crucial strategic role to play at regional and local levels. Their housing function has evolved over the past decade from that of being predominantly housing providers to having statutory responsibility for a comprehensive housing strategy for their area. The strategic role ensures that housing strategy and development planning are integrated and address housing requirements across all sectors and across all tenures - tackling the needs of communities in both pressured markets and low demand areas subject to regeneration. Where new house-building in areas of housing shortfall and housing renewal in regeneration areas are not keeping up with plans, we will work with the local authorities concerned to identify and tackle the causes.

3 .5 The local housing strategies of local authorities are critical in giving a full understanding of the local picture. It is essential that these strategies are of high quality to ensure the right and most efficient local responses to a complex pattern of shortages, surpluses, and changing demographics. They also need to reflect a regional perspective through the recognition of wider housing market areas and must fit with development planning frameworks.

3 .6 A year ago, we embarked on a wide-ranging review of housing supply and affordability in Scotland. This followed our concerns about trends which showed the housing system in Scotland had not been delivering the right house types in the right places to cater for the increasing number and variety of households, to maintain the viability of communities, and to support the operation of local labour markets. A primary focus of the review was the requirement for affordable housing - broadly defined as housing of reasonable quality that is affordable to people on modest incomes. In some places the market can provide some or all of the affordable housing that is needed. However, in other places it is necessary to make housing available at a cost below market value, most commonly in the form of social rented accommodation, various forms of low cost home ownership and, in some cases, private sector rented accommodation available at lower cost than market rents.

3 .7 Our review has clarified the underlying issues and key housing supply challenges facing us. It has directly informed the wide range of new actions we will take to improve housing supply and affordability in the market and to increase provision of subsidised housing.

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SCOTLAND'S PEOPLE

3 .8 Despite a slight fall in population, the number of households in Scotland has been increasing at a fairly steady pace and is projected to continue to increase by about 13,000 households per year to reach 2.4 million by 2016. The average size of households is falling. As a consequence of rising income and social and demographic trends, the number of single person, lone parent and elderly households has been increasing, while the number of households with two or more adults with children has been falling. Projections show that, on current trends, by 2016 just under a quarter of all households will be single people (compared with 15% in 1991) while only 15% will be "traditional" families with two or more adults and children (compared with 25% in 1991).

3 .9 Increasing life expectancy for both men and women is reflected in the growth in numbers of older households, both single people and couples, and in increases in numbers of the very old. Between 2001 and 2016 the number of couples with the head of household aged 65 or over is projected to increase by a fifth, from just over 250,000 to just over 300,000 and the number of single older households is projected to increase at about the same rate, from just under 300,000 to just under 350,000. Within this trend, the number of very old, mainly single, households whose head is aged 85 or over is projected to increase by two fifths, from around 60,000 in 2001 to 80,000 in 2016. These changes mean that more people with a wider range of needs will require support to live in the community.

3 .10 While household growth has been at a relatively modest rate for Scotland as a whole, there have been sharp regional differences. Over the past 10 years household growth has varied between over 15% in West Lothian and Stirling to below 2% in Inverclyde, Glasgow and Dundee. As a consequence of these contrasting patterns, housing issues have been very different in various parts of Scotland. In areas of high household growth the main concerns have been about the scale and nature of overall housing supply and related infrastructure while in areas of low household growth there has been related low demand, particularly in some parts of social housing. Population and household projections show this differential trend continuing.

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SCOTLAND'S HOMES

3 .11 Scottish builders are currently building between 23,000 and 24,000 houses per year (including around 6,000 funded through Communities Scotland programmes) and have sustained new building at over 20,000 houses per year since the early 1990s. A key feature of house building in Scotland over the last 60 years has been the sustained growth in private new building, which now accounts for around 80% of all new building.

3 .12 Over the past 10 years the total stock of houses in Scotland has been increasing by around 19,000 houses per year (new building minus houses demolished) while the total number of households has been increasing at a slightly lower rate of around 18,000 households per year. However the scale of household growth in some parts of Scotland, coupled with recent rapid increases in house prices, demands housing and planning systems that are far more responsive to economic and social change.

3 .13 A combination of the high and growing proportion of private sector new building and Right to Buy sales has dramatically changed tenure patterns in Scotland. Between 1981 and 2003 owner occupation increased from 36% to 65%, while social renting decreased from 54% to 27%.

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HOUSING REVIEW IN SCOTLAND

3 .14 In last year's review we analysed the functioning of the market at the national and sub-national level and examined the implications this has on housing supply and affordability. We conducted research on the requirements across Scotland for affordable housing and assessed the 32 local housing strategies produced last year by local authorities. We published our analyses and research in July 2004.

3 .15 We also considered the relevance to Scotland of the findings and recommendations of the Barker Review, published in March 2004. This review, chaired by Kate Barker, was commissioned by the UK Government to identify the issues underlying the lack of responsiveness of housing supply in the UK as a whole and to make recommendations to address them.

3 .16 Our Scottish review confirmed that, while many housing issues are present across the UK, those in Scotland tend not to be of the same magnitude. While the Barker Review found that prices in the UK have risen on average by 2.5% per annum in real terms over the last 30 years, the rate of increase in Scotland is considerably lower, at 1.5%. Price changes have also been less volatile in Scotland and the economy has not suffered the same reduction in economic activity associated with sharp adjustments in house prices.

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3 .17 The analysis at the national level, however, masks a range of challenges at the regional and local level. There are severe housing supply and affordability problems in particular localities - and problems of housing market failure and surplus housing in others. These are problems which range right across tenures - private housing, subsidised low-cost home ownership and social rented housing - and exist in complex patterns across the country. Dominant geographical distinctions are:

  • Urban areas under pressure, such as the wider Edinburgh housing market, characterised by housing supply shortages in both market and affordable housing.
  • Urban areas dominated by regeneration requirements, such as the Greater Glasgow housing market, featuring problems of housing quality and type, with existing major drainage and water supply constraints.
  • Rural areas, characterised by diverse and very localised housing markets. These include the hinterlands of major settlements with high demand for affordable housing and areas experiencing high levels of in-migration and second homes where house prices are pushed beyond the reach of local people. They also embrace remote areas, including a number of the Islands, which often experience depopulation through a mix of economic decline and limited housing options.

3 .18 Our review has demonstrated that not enough homes are being built in particular areas. Increases in house prices in some parts of Scotland have had a significant impact on affordability. In the late 1990s lower quartile house prices were below £50,000 in almost all local authority areas across Scotland. By 2003-04, lower quartile house prices had increased to over £70,000 in five areas - Edinburgh, East Renfrewshire, East Dunbartonshire, East Lothian and Midlothian - and to over £55,000 in Stirling, West Lothian, Highland and Glasgow.

3 .19 Research undertaken for us by Heriot-Watt University analysed local housing need and affordable housing requirements for Scotland. 2 This estimated that at the local authority area level there is a total net need for 7,000 additional houses per year, while if assessed at housing market area level the net need figure is around 4,500 houses per year. However, it showed a very mixed picture. Large parts of the country have a net surplus of affordable housing (most notably Greater Glasgow with a surplus of over 3,500), while elsewhere there is a sizeable net shortfall (most notably Edinburgh and the Lothians, with a net shortfall of over 3,000).

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HOUSING MARKET AREAS

These are areas within which most people both live and work, and where most people would choose to relocate if moving home but not changing their place of employment. Housing market areas are based upon the origins and destinations of house purchasers in the private market. Scotland has 13 identifiable housing market areas including the four main cities with their surrounding regions, eight other towns with their hinterlands and one grouping of three towns in North Ayrshire. Importantly, housing market areas do not reflect local authority boundaries.

3 .20 There is no 'right' spatial level to consider housing need. However, the housing market area - areas in which people typically move house - is an important level in policy terms. Having assessments at both housing market area and local authority levels allows more strategic and responsive approaches in housing planning and local investment decision-making.

3 .21 We recognise, however, that while many households may be able to exercise housing choice over areas as wide as a local authority or housing market area, others may not find this feasible or appropriate. For these households, many of whom may be potential customers for affordable housing, a more localised settlement or neighbourhood area may be more relevant.

3 .22 The Heriot-Watt research was complemented by assessments of local housing strategies undertaken by Communities Scotland. Local housing strategies have a crucial role to play in ensuring, within the wider housing market area context, the right local responses to a complex pattern of shortages, surpluses, and changing demographics. The assessments of strategies found a broadly similar distribution of need for affordable housing to the pattern identified by the Heriot-Watt research. Although these strategies do not provide a complete picture, 15 of the strategies identify a need for additional affordable housing, totalling almost 5,700 new houses a year and evidence suggests there may be local pockets of shortage in at least eight other local authority areas.

Outcome of our Review

3 .23 From our review, we have concluded that:

  • a broader view is needed of housing policy if the required range of housing types, prices and tenures is to be delivered in the right locations. A well functioning housing market will reduce pressure on the need for public investment in affordable housing, while the provision of low cost home ownership can reduce pressure on the social rented sector.
  • the dominant issue in Scotland is the need to respond to the geographical imbalances in supply and demand at regional and local levels. Broadly, this means targeting new supply of affordable housing in those areas with a shortfall, placing the emphasis on regeneration in those areas which have a surplus and ensuring that affordable housing provision is tailored to the sustainability needs of rural areas.
  • we need to recognise and support the trend towards owner-occupation. Our research indicated up to a third of affordable housing need could be met through forms of support for low cost home ownership. In a responsive housing system, tenure should reflect people's requirements and preferences and respond to the nature and pace of economic and social change.
  • we need to continue to build upon the assessments of housing requirements produced by the review. In particular, this means assessing housing needs and demand across the whole market, the implications of changing demography for the future shape and type of housing stock, and the impact of the commitment to ensure that by 2012 all homeless people are entitled to a permanent home.

Increasing Housing Supply and Improving Affordability

3 .24 Our review has directly informed the wide range of actions we are now taking on a broad front to improve housing supply and affordability in the market and to increase provision of affordable housing.

  • A significant increase in investment in affordable housing.
  • New financial instruments for low cost home ownership.
  • Major planning reforms to improve the functioning of the housing market.
  • New planning advice setting out the relationship between private house building and affordable housing provision.
  • New land supply measures.
  • Major investment to address infrastructure constraints.
  • Better modelling of future housing requirements.
INVESTMENT IN AFFORDABLE HOUSING

3 .25 Our housing investment in urban and rural areas provides new and improved affordable housing in disadvantaged communities to replace or improve poor quality housing. In areas of housing pressure, it helps people on low incomes to rent social housing or buy a home where housing demand exceeds supply or where market prices are beyond the reach of their incomes. We have:

  • since devolution, invested £1.5 billion in the delivery of more than 41,000 affordable homes across Scotland.
  • provided 34,400 homes for social rent and 6,600 homes for low cost home ownership for people on low incomes and first-time buyers.
  • approved for authorities on the Community Ownership Programme substantial funding packages for regeneration and new build to supplement the investment which stock transfer will bring to the existing houses. Packages agreed or offered in the last year are:
    • a £600 million package to deliver up to 10,000 new affordable homes in Edinburgh.
    • a £50 million package to produce 1,000 additional affordable homes in the Highlands.
    • a £12.5 million package for 150 additional affordable homes in the Western Isles
  • injected an extra £20 million into the Affordable Housing Investment Programme in 2004-05 to accelerate new supply in pressured areas and the acquisition of land by RSLs for new housing developments.

3 .26 We have pursued a range of initiatives to bring empty properties back into use. Houses can be empty for various reasons. A number will always be empty for a period between occupiers, especially in areas of relatively slow demand for renting or purchase. We have encouraged public sector landlords to minimise transitional vacancies through efficient letting processes. Other long-term vacant public or private sector housing may be in unsuitable locations in the wake of demographic or economic change. In Scotland there is no indication that empty homes are a problem in the private sector in areas of housing shortage.

3 .27 The significance of empty homes as a housing issue will vary across the country according to market conditions, and a local response is the most effective way of dealing with this. We implemented the Empty Homes Initiative, which brought around 1,400 houses back into use in the period 1999-2002, to stimulate such a response. Local authorities are now responsible for assessing the need for action on empty homes and including it in their local housing strategies if it is a priority for their area. Empty homes in the local authority and RSL sectors can be dealt with through community ownership proposals, whether demolitions or improvements or Scottish Housing Quality Standard delivery plans.

3 .28 We recognise the vital part affordable housing has to play in ensuring the sustainability of rural communities and the need to respond to the acute and localised nature of housing pressures facing many rural areas. We have:

  • raised the rural share of the housing investment programme to 28% - £80 million in 2004-05 - an all-time high.
  • given local authorities flexibility to raise additional income from reduced Council Tax discounts on second homes - income of up to £20 million per year nationally which can be invested in affordable housing or in the removal of development constraints.
  • almost doubled our investment this year to £2.6 million in Rural Home Ownership Grants.
  • set out, through a package of planning policy and advice, a positive framework for rural development.
  • introduced a new Forestry Commission Scotland policy for the preferential release to RSLs of surplus forestry land for affordable housing (see para 3.35).
  • approved over £3 million for a pilot innovative land banking fund for the Highlands to secure land for affordable housing (see para 4.35).

3 .29 Looking ahead, we plan a major expansion in housing investment over the period to 2008. Over the next three years we will:

  • increase our investment in affordable homes for those who need them most. Public investment of £1.2 billion will allow us to increase the number of affordable homes funded over that period from 18,000 to 21,500.
  • as part of this investment, fund over 16,500 homes for social rent to help homeless people move from temporary accommodation into a permanent home and to give people on housing waiting lists a better chance of getting the house that they want.
  • invest in the largest expansion in low-cost home ownership for a decade - nearly 5,000 homes under low-cost home ownership schemes by 2008 to help meet the ownership aspirations of first-time buyers, hard working families and essential workers. Under this expanded programme we will introduce an innovative "Homestake" scheme (described in para 2.10) based on shared equity to enable first-time buyers to get a foot on the property ladder.
  • over the period to 2008, expand our housing investment programmes in both urban and rural Scotland, sustaining or increasing investment in regeneration areas and increasing investment in both urban and rural pressured areas.
  • ensure our investment in new supply is complemented by the addition of good quality renovated housing through social landlords' delivery of the new Scottish Housing Quality Standard, as described in section 4.
  • as part of our wider effort to improve the total supply of new housing in the market, expect our increased investment to accelerate the supply of market housing on sites where both private and social housing are being developed.
  • explore with rural private landowners the scope for private landlords to play a greater role in the provision of affordable housing in rural areas.
MODERNISING THE PLANNING SYSTEM

3 .30 Over the long term, the planning system has a central role in maintaining a healthy housing market, by ensuring an adequate, effective supply of land. We have already set out new planning policies for housing with the publication of Scottish Planning Policy 3. More widely, the Partnership Agreement commits us to reforming the planning system as a whole to "strengthen involvement of communities, speed up decisions, reflect local views better and allow quicker investment decisions". We have consulted on a major reform agenda which will involve new legislation and guidance to achieve this.

3 .31 Greater efficiency in the preparation and implementation of development plans is a key aim of planning reform. This in turn will play a role in the efficient functioning of the housing market through the release of sufficient land for housing, whilst balancing other considerations. We set out a number of proposals in our consultation paper Making Development Plans Deliver. While the full extent of the reform package has yet to be agreed, we have already announced our intention to:

  • remove the requirement for two tiers of development plans, except in the four city regions.
  • streamline the process so that there should only be one draft plan (rather than going through consultation and deposit draft stages).
  • prepare model development plan policies, demonstrating best practice and increasing consistency.
  • require planning authorities to produce an action plan for each development plan, to show exactly how they and other stakeholders will deliver the vision set out in the development plan.
  • examine with local authorities and housing providers an improved approach to monitoring the amount of land being delivered for housing.

3 .32 We will also:

  • determine the most appropriate measures to ensure that development plans are produced on time, such as a statutory duty to update within a set timetable.
  • continue our reform of development control. This is likely to involve modernising processes governing the submission, consideration and approval of planning applications and encouraging much greater use of Information Technology. This will have a positive impact on housing development by improving speed and efficiency in the processing of applications for major housing developments.
  • set out our proposals for the reform of planning agreements to reduce the extent to which they can slow down the processing of applications for planning permission, including applications for housing developments.
  • taking account of recent consultation, make a decision on rights of appeal in planning in the context of, and in line with, the timescale of reforms to the planning system as a whole.
  • publish a White Paper later this year setting out all of our planning proposals in detail.

PLANNING ADVICE FOR AFFORDABLE HOUSING

3 .33 SPP 3: Planning for Housing indicated that the planning system has an important role to play in the delivery of appropriate affordable housing. Our new Planning Advice Note on Affordable Housing, which complements other measures including increased funding, identifies ways of making the planning role more effective. Our advice:

  • aims to create a climate of greater certainty and confidence in the requirement for affordable housing by setting out a benchmark figure of 25% of all new housing developments to be affordable homes where need is justified by a housing needs assessment; the intention is to reduce delays in negotiations and procurement of housing - not just for affordable housing but also market housing.
  • promotes good practice in the use of planning agreements, including their speedier preparation.
  • explains the roles of the main agencies involved, providing advice on the relationship between the local housing strategy and the development plan and on measures to be taken through development plans and development control.

3 .34 We will monitor the impact of this advice and, taken alongside lessons from the experience in other countries such as Ireland, will consider if provisions are needed in future planning legislation.

PUBLIC SECTOR LAND RELEASE AND LAND BANKING

3 .35 Our reforms to the planning system will improve land supply for housing. We are also taking action to make better use of public sector land, to permit the development of more market and affordable housing, particularly in pressured areas, and to support land banking by the RSL sector. We have:

  • agreed a land release policy with Forestry Commission Scotland. In handling sales of surplus land, Forestry Commission Scotland now provides a preferential opportunity for Registered Social Landlords, supported by Communities Scotland, to acquire the land for affordable housing. Around 20 new sites for affordable housing are already feeding the housing development programme, particularly in rural areas where need is often especially acute.
  • injected an additional £20 million into the housing investment programme this financial year almost half of which has been directed to accelerate land acquisitions by RSLs, particularly in pressure market areas.
  • approved investment of over £3 million to create a pilot innovative land banking fund to address land supply for affordable housing in the Highlands. In this partnership between Highland Council and Communities Scotland, the fund will operate in a way which allows public funding to be recycled. With matched funding from Highland Council, derived from contributions of land and investment raised from reducing the discount on second and holiday homes, the aim is to grow this fund to £10 million within four years.
  • completed a study last year of RSL landholdings and constraints on land acquisitions which is informing land banking strategy and programme planning with RSLs to ensure delivery of our £1.2 billion affordable housing investment programme to 2008.

3 .36 We will:

  • following consultation, introduce new regulations under the Local Government in Scotland Act 2003, to streamline the consents process for the disposal by local authorities of land at less than market price.
  • improve the operation of the public land register system to include participation by more public bodies and to streamline the system for site identification and transfer.
  • work with other public bodies and UK Government Departments to develop framework agreements with a view to securing transfers of surplus land for housing in areas where particular need has been identified.
  • seek preferential schemes for land release at favourable prices building on the approach already agreed with Forestry Commission Scotland.
INFRASTRUCTURE

3 .37 High-quality infrastructure is a pre-requisite for thriving and successful enterprise in Scotland and for delivering an adequate supply of housing. We have begun to tackle the years of underinvestment in Scotland's infrastructure and are committed to sustained long-term growth in our capital investment.

3 .38 The development strategy set out in the National Planning Framework will inform decisions on investment in infrastructure. The Framework recognises the cities as the main drivers of the economy and highlights the relationship between Edinburgh and Glasgow as being of key importance to Scotland's economic success. It highlights the need to accommodate a substantial growth in the number of households in Edinburgh and the Lothians and identifies the Clyde Waterfront and Clyde Gateway as areas where major change is already occurring and the scale and complexity of the issues to be addressed is such that co-ordinated action is needed in the national interest.

3 .39 The main infrastructure constraints in Scotland on housing development relate to water and sewerage, transport, and in some key growth areas, schools and health services.

To unlock housing development, we will:

Water and Sewerage

  • target funding allocated in the current water services programme to 2006 - £200 million to help release development constraints, and £41 million for first-time connections in rural areas, to assist in the early development of affordable housing units which have already been approved, improve some drinking water supplies and allow first-time connections to public networks.
  • invest to tackle all the anticipated development constraints on strategic (water and sewerage treatment works) infrastructure during the next investment programme. This is expected to provide sufficient strategic capacity to allow all estimated new housing developments to be connected to the public networks between 2006 and 2014.
  • supplement the housing investment programme with an extra £14 million per year commencing in 2006-07 to reflect the cost of local water and sewerage infrastructure required by affordable housing projects developed by RSLs. This will ensure charges are not translated into higher rents to tenants.
  • ensure that, in developing the new regulations to implement the principle that the developer should fund any local capacity requirement, there is a transparent income allocation from Scottish Water to take account of any charge income Scottish Water will derive from such investment.

Infrastructure Planning and Investment

  • publish an Infrastructure Investment Plan setting out our detailed plans for investing in the physical fabric of Scotland, in new schools and hospitals, housing and transport projects.
  • legislate to ensure infrastructure providers engage fully with planning authorities and delivery agencies for transport, housing and regeneration and contribute to development plans to ensure that vital information and infrastructure relating to development sites is provided at the earliest stage.
  • develop an appraisal framework which can be applied at development plan and project level for assessment of proposals for major new developments and any associated transport infrastructure requirements.

TAKING ACCOUNT OF THE BARKER REVIEW

3 .40 In developing and shaping new actions to improve housing supply and affordability in Scotland, we have assessed the relevance to Scotland of the recommendations made by the Barker Review to the UK Government. This has been done against the backcloth of our analysis of Scotland's housing position and the different systems and structures in Scotland. We have published separately a statement providing details of how we are taking account of these recommendations in housing and planning reforms in Scotland.

TAKING ACCOUNT OF THE BARKER RECOMMENDATIONS

The Barker Report to the UK Government was published in March 2004
. It contains 36recommendations designed to increase the supply of housing. The main recommendations range across planning, housing, investment, infrastructure and the construction industry. Other key recommendations, primarily those relating to taxation, deal with matters reserved to the UK Government.

Planning system - We have consulted on a modernising planning agenda for Scotland and will publish a White Paper in
2005 setting out our plans in detail.

Housing assessments and targets - We are pursuing a range of measures to improve assessments of future housing and land requirements, particularly at regional and local levels, and joining up housing and planning interests. We will explore the feasibility of affordability targets drawing on work underway by the UK Government. This will build on our existing arrangements for housing system analysis.

Social housing - We have substantially increased provision for subsidised housing and have an efficiency programme underway to ensure value for money from registered social landlords.

Infrastructure - Our infrastructure investment plan announces our future strategic investment intentions for addressing the major water and sewerage infrastructure constraints affecting new housing developments.

Construction industry - We are working in partnership with Homes for Scotland, the representative body for the house-building industry in Scotland, on our wider housing and planning reforms and action in response to specific recommendations addressed to the industry.

ASSESSING FUTURE REQUIREMENTS

3 .41 Our review has provided an essential foundation of new evidence for planning and investment to address identified housing supply and demand imbalances across the country. It has highlighted that the dynamics of supply and demand are creating discrete markets. We will therefore continue to build on this evidence base to support efficient functioning of the housing market, effective provision of affordable housing, and the planning of housing support for vulnerable people. We will do this through clarifying trends, requirements and opportunities for housing planners, funders and providers.

3 .42 Working with partners, we will:

  • assess the feasibility of regional affordability targets as an indicator of whether the housing market is functioning effectively, and as a trigger for action. These could take the form of regional targets based on indicators of affordability (e.g. the ratio of lower quartile incomes to house prices) and provide a basis for determining estimates for new housing requirements. Work on affordability targets in Scotland will be linked with parallel work by the Treasury and the Office of the Deputy Prime Minister.
  • improve approaches to the forecasting of housing and land requirements as part of our reforms to better integrate development planning with housing - forecasting which covers whole housing markets taking into account both market information and housing needs backlogs.
  • build on current guidance to local authorities to ensure that there is a common approach at the core of local housing assessments. In addition to identifying particular local issues, this will help the development of a more robust picture of overall housing requirements and provide a stronger basis for future strategic and investment decisions.
  • seek detailed analyses from local authorities on the likely demand for, and supply of, social housing in light of our commitment that by 2012 all unintentionally homeless people will have access to permanent accommodation. This will enable assessment of requirements for additional permanent accommodation for homeless people to be undertaken within the wider context of housing supply and improvement across all sectors. It will help forge links between local homelessness and housing strategies. Crucially, it will inform the statement we will publish by the end of 2005, setting out how we plan to ensure the 2012 target is met.
  • assess future housing and support provision for the elderly, in the light of an ageing population and changing dependency levels. This will allow modelling of the scale and costs of different combinations of housing, care and support to meet these changing needs. It will inform the future planning of services, the setting of priorities and the effective co-ordination of capital and revenue funding streams for housing, care and support.
  • prepare a report to Parliament in 2006 on the effect of the Right to Buy on the nature and condition of the housing stock, people's housing needs and the demand for, and availability of, housing. As described in section 2, this report will provide the evidence base against which we will consider the merits of the cases being made for adjustments to the Right to Buy policy.
  • undertake research to investigate further the nature of the relationship between housing supply and the labour market. As outlined in para 2.13, we will use this to establish whether more specific support is required, beyond our range of new low cost home ownership measures, for defined categories of essential workers.

REGENERATION

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It isn't easy to get Bette Gurvan to say a bad word about Ardler. Even when the 1960s Dundee estate became a byword for urban deprivation, Bette, a resident for more than 30 years, would prefer to look back on happier times. "Ardler was a bonnie scheme to start with," she insists. "There was a real sense of community."

But in the 1980s the area became run-down with many empty properties, while vandalism and crime made it an unattractive place to live. But Ardler is now being reborn with the help of the Dundee Partnership, a co-operative venture between Communities Scotland, Dundee City Council, Scottish Enterprise Tayside and other agencies. Most importantly, the local community is heavily involved.

The Ardler Village Trust, which Bette now chairs, is a community organisation that manages and co-ordinates Partnership activity in Ardler and promotes social inclusion in the area. New homes are being built and new green spaces are being created. The renewed enthusiasm in the neighbourhood is palpable.

Ardler is once more a community where people want to make their homes. "The place," says Bette, "is beginning to tingle again."