FORMER finance secretary Kate Forbes has said the UK Government’s cuts to Scotland’s Budget are “brutal” amid fears over whether a key target to combat the housing crisis will be met.
The Scottish Government revealed yesterday that £205.1 million would be cut from the housing budget – with £188.8m coming from the new homes fund.
In the wake of the budget, the Scottish Federation of Housing Associations said the cuts would have “long-lasting consequences for the nearly 250,000 people throughout Scotland stuck on a waiting list for a social home”.
Forbes, who narrowly lost out to Humza Yousaf in the SNP leadership race earlier this year, highlighted analysis from the Scottish Funding Council which showed rapidly declining capital budgets as a result of cuts in Westminster.
She said: “The UK [Government] is cutting Scotland’s capital by 20% (after inflation) by 2028/29 – that’s brutal for Scotland’s infrastructure, including roads, schools, hospitals.”
Capital spending is different from day-to-day spending and is focused on investing in infrastructure and physical assets.
According to the Scottish Fiscal Commission, the Scottish Government’s funding from Westminster has increased by 0.9% after taking into account inflation.
But an increase in spending on things like the NHS and social security means cuts to the capital budget, which is to fall by 4%.
The Scottish Government has a target of building 110,000 new affordable homes by 2032, while three councils have declared a housing emergency.
A review of this target which was scheduled to take place in 2026-27 has been brought forward to next year.
Speaking on BBC Radio Scotland on Wednesday, Deputy First Minister Shona Robison (below) said the target was still “important”, but there would have to be different methods of funding used to fulfil it.
“A 10% cut to our capital budget over the next five years is having an impact on our capital programmes,” she said.
“What we had to prioritise next year was our legal and contractual commitments, things that were already in train.”
She added: “What we’re doing, and the work we’re doing with the housing minister, is to look at how we can lever in innovative finance.
“Work is well advanced on that to make sure that working with private sector organisations we can lever in additional finance because we recognise that affordable housing is a key anti-poverty measure and we want to be able to deliver on our commitments, but we’ll have to do that in a different way.”
Local authorities have also raised fears they will be forced into making swingeing cuts as a result of the council tax freeze.
Cosla, the body which represents Scotland’s 32 local authorities, said that the Budget has dealt cuts of £350.5m to councils.
But Robison has insisted the funding settlement for councils was “not a bad offer”.
She pointed out local authorities were getting a bigger slice of the overall budget – to the tune of £14 billion – but acknowledged the impact of cuts to capital funding.
“And of course on capital, yes, capital is difficult, we’ve got a 10% cut to our capital budget over the next five years, so nowhere in the public sector can be immune from the impact of that capital budget reduction that we are having to manage,” said Robison.
