Affordable Housing Supply Programme (AHSP) - Deliverability Review

Efficiency of the Affordable Housing Supply Programme

Is our approach, proportionate, transparent, fit for purpose and supportive of the overall delivery and policy objectives?

It was suggested that the Scottish Government should demonstrate greater transparency in terms of in-year movement of funding.

Stakeholders broadly welcomed and supported the partnership approach to the delivery of affordable homes and noted the strong relationships that existed between local authorities, housing providers and Scottish Government teams.

Some expressed a degree of frustration at the 110,000 affordable homes target having been set by the Scottish Government without the direct involvement of the sector. However, it is also noted that at the time of Housing to 2040, the overall ambition and the scale of the delivery proposed (100,000 affordable homes by 2032) was very much welcomed by the sector and aligned with the outcomes of a report commissioned by Shelter Scotland, the Scottish Federation of Housing Associations, and Chartered Institute of Housing Scotland into the Affordable Housing Need in Scotland Post-2021.

Stakeholders noted that the move away from multi-year planning assumptions has undermined certainty and the sector’s ability to forward plan for private investment.

Many respondents acknowledged the challenge of the target. That perspective was mainly in reference to the reduction in funding^[9] and rising additional costs. They welcomed the review’s focus on deliverability as an opportunity to evaluate the process of delivery and the actions now required. Several stakeholders perceived a fragmentation of ambition in terms of the increase in the number of ring-fenced funds. In their view, that suggested a lack of clear strategic oversight for the programme and a potential inhibitor on the flexibility by reducing the share of the budget being made available to local authorities through resource planning assumptions. Some stakeholders reflected on the alignment of the Affordable Housing Supply Programme’s central budget against local authority priorities, and suggested available funding should be allocated through the Strategic Housing Investment Framework instead. Similarly, there was a view that the priority should be to deliver affordable housing in the places where it is most needed, with a focus on social rented housing.

While a number of stakeholders noted the time that has passed since Strategic Housing Investment Framework indicators have been revised, none suggested that the indicators were now wrong. Instead, it was felt there may be benefit in re-considering the weighting between them to ensure that the initial allocations in terms of resource planning assumptions were reflective of need.

Efficiency and proportionality-centred discussions focused on the perceived responsiveness of the planning system. Concerns were also raised about the proportionality of some planning requirements, particularly in rural and island communities.

Respondents also noted the potential to be more efficient in unlocking small sites, including rural and brownfield sites, with one suggestion being to consider innovative funding/joint venture models across the public and private sectors.

• as well as building costs, some stakeholders flagged issues around affordable sites, including availability, land cost, issues around assembly and land remediation challenges. Some issues were also raised around alignment of wider infrastructure and services. Suggestions included land value capture infrastructure funding and securing more public sector land for affordable homes

A summary of general observations follows:

• processes underpinning the operation of the Affordable Housing Supply Programme aim to support effective and proportionate joint working across the housing sector, respecting the statutory role of local authorities
• the collaborative partnership approach was seen as a strength in the planning, management and delivery of the programme with strong relationships between teams and a willingness to be flexible and support solutions
• multi-year planning assumptions give certainty and increase delivery confidence around risk as well as the ability to secure investment
• national management of the programme supports strategic focus through the identification of common issues and concerns as well as efficiency, including the ability to move funding between local authorities
• the Strategic Housing Investment Framework indicators are well-established and relative weightings have remained static for some time

Scottish Government Response to Feedback

The process supporting the operation of the Affordable Housing Supply Programme supports effective and proportionate joint working across the housing sector to support delivery. Importantly, it acknowledges and reflects the statutory housing role of local authorities in assessing and addressing local housing requirements and aligns this within the national strategic policy context and alongside the role of Scottish Ministers. It also ensures that the benefits and efficiencies of managing the programme at a national level are optimised. This includes responding to strategic issues and the ability to support flexibility and efficiency, for example, by moving funding between local authorities where it is at risk of not being spent in-year to optimise delivery in other areas where it is required to support deliverable priority projects (noting the direct management arrangements that exist in Glasgow City Council and The City of Edinburgh Council).

Published out-turn reports include information on actual expenditure against local authority resource planning assumptions as well as any variance. We will continue to engage with stakeholders to explore whether there is any scope to enhance this beyond the comprehensive information that is already provided. We will explore using published out-turn reports as a starting point for ongoing engagement with stakeholders to, for example, (i) discuss regional variations and challenges, (ii) celebrate successes, including social impact, and (iii) consider ways forward where challenges exist.

The Minister for Public Finance made a statement in Parliament on 12 November 2024, launching the Planning and Housing Emergency Delivery Plan, which sets out a package of measures to accelerate work on planning support for housing. It covers a wide range of actions on policy, delivery, efficiency and capacity to optimise the contribution of planning to tackling the housing emergency. Meanwhile, a short life working group has been established to share examples and expertise on good practice for proportionate information to support decision making. The 2025-26 Programme for Government also commits to measures to boost planning capacity and reduce barriers to delivery, including consulting on mechanisms to accelerate housebuilding.

Housing Emergency Actions

• take forward actions in Planning and Housing Emergency Delivery Plan and progress Programme for Government commitments to increase the capacity and improve the performance of planning services
• explore with COSLA the merit of any reconsideration of Strategic Housing Investment Framework (SHIF) indicators/weightings and associated timing and prioritisation