Councils can't afford strategic housing programme

EXCLUSIVE by OUR LOCAL GOVERNMENT EDITOR

The UK Government is being asked to assist in developing seven strategic housing sites across the south-east of Scotland, including the extension to Tweedbank 'town' in the Borders, by joining a special task force which would also include Scottish civil servants and local government representatives.

The tripartite approach has been suggested even though housing is a devolved matter under the control of the SNP administration at Holyrood. 

But it appears none of the sites - between them capable of delivering 41,000 new homes and levering in over £4 billion of private investment - will be developed without government help to pay for expensive infrastructure. Council budgets in the Lothians, Borders and Fife are stretched and incapable of coming up with the necessary financial resources.

The so-called Strategic Sites Programme is one of the most crucial issues facing the joint committee which oversees the Edinburgh and South-east Scotland City Region Deal. The housing areas earmarked for development are  Blindwells, Calderwood, Dunfermline, Edinburgh’s Waterfront, Shawfair, Tweedbank and Winchburgh. They have long been identified as key areas of change and growth in the region.

A recent committee meeting heard the investment fund underpinning the city deal was inadequate, and there were obstacles to developing all of the sites. Members urged governments to prioritise the sites which are located in "the fastest growing region of Scotland".

It is claimed all of the housebuilding programmes must be developed rapidly to accelerate supply in light of the housing emergency.

A report which has been sent to Scottish Government Housing Minister Paul MacLennan, warns: "The impact of accommodating growth in capital and revenue terms is constraining the ability to deliver it, and same is true in terms of the ability to run services needed to sustain it. This situation places delivery, equality and our overall prosperity at risk."

To do nothing is not an option, according to the report from the joint committee.

"Underinvestment in housing and infrastructure will undermine our regional economy, cause overheating in the housing and labour markets, stifle positive transformation, impact access to affordable housing, and hold back equality for, and the potential and productivity of, our people, places and the region, as key drivers of Scotland’s and the United Kingdom’s overall prosperity".

The scope, scale and duration of government support needed for each site will be set during the respective business case development process, when it can be identified in detail.

Details for each of the locations includes a timescale for development. In Tweedbank's case the year quoted is 2040. A full business case is expected to be finalised in the summer of 2025.

The report says the Tweedbank Town Expansion will provide 300 mixed use homes, including 130 affordable houses. It adds: "Requirement - road and rail bridge; heating network; Homes excludes privately funded element; business space; care village".

It is recommended a Strategic Sites Task Force should be established by governments to oversee the delivery of the Strategic Sites Programme. 

The Task Force should comprise Scottish and UK Government civil servants as well as Ministerial and civil servant "champions", and include representatives from the Regional Partners as well as a representative for housebuilding interests. 

"The Task Force should be predicated on partnership working to deliver the strategic sites programme and ensure strategic alignment and collective action to unlock the delivery of our strategic sites.

"Financial innovation, both in capital and revenue terms, will be key to unlocking the strategic sites due to the scale of the delivery challenge and the significant challenges facing public sector finances. 

The last published assessment of infrastructure costs required to expand Tweedbank across the greenfield Lowood Estate related to a 2018 report, presented to Borders councillors in private as they decided to proceed with the purchase of the estate.

Details released following a Freedom of Information request in 2020 showed the Lowood element of the so-called Tweedbank Masterplan would require £106 million, including a £10 million sum to cover acquisition of the estate. Various infrastructure costs linked to the future developments at Tweedbank and set out in the report totalled more than £21 million.

The capital requirement for the project will have increased considerably over the last six years. The original intention was to have the first phase of housing (30 homes) built by Eildon Housing Association, and occupied by now. But the programme has been delayed several times with a firm starting date still to be announced.

In the report requesting the establishment of the task force, Nile Istephan, Eildon Housing's chief executive is quoted as saying: "This Programme has the potential to unlock the transformation of the region by removing barriers for growth and enabling prosperity to be delivered for citizens and the wider United Kingdom and Scottish economy.”