By NEIL RIDDELL
HJALTLAND Housing Association is facing a huge cut in funding from the Scottish government at a time of acute housing shortage in central areas of Shetland.
The association had bid for a £9m government grant for building new houses but has learned it will only receive £2.64m in 2008/9, just 44 per cent of last year’s £6m grant.
It means Hjaltland, which already has around 110 houses in the process of being built, will have to scale down its plans over the next 12 months. It had hoped to begin work on a further 70 houses but is now likely to revise that down to only 30, in a year when there are currently more than 900 people on the SIC’s waiting list for housing.
Hjaltland Housing’s property services manager Bryan Leask said that he was “disappointed” by the news but he hoped it would prove to be a “blip” as, when the SNP took power in Edinburgh last year, it promised £1.5bn for housing over the next three years, a 20 per cent increase on what the previous government had offered between 2004 and 2007.
“The waiting list is not going down anyway [and] there is pressure, not just on us but on the local authority as well, so it’s not great news,” Mr Leask said. “It’s a bigger disappointment to the communities we were hoping to get started in sooner rather than later… [but] we can only work with the money we have got.”
The association was due to meet yesterday to discuss how to deal with the funding shortfall and Mr Leask said Hjaltland had been planning to start building work on phase three of the Quoys project in Lerwick, along with new developments in Brae, Aith, Cullivoe and Eshaness. “Obviously we can’t start all of them now,” he said.
Mr Leask said the association was not keen on raising tenants’ rents in order to deal with the funding gap.
“We have to be very careful with that,” he said. “What we’re building here is housing for social rent. We can’t go making the rents unaffordable … we have to be careful we’re not pricing ourselves out of the market.”
He said the government’s intention was to make housing associations more efficient and, while he argued Hjaltland Housing had already been doing that in the past, it may have to look at different ways of financing projects rather than adding more burden to rent-payers.
Head of SIC housing Chris Medley said the council relied “heavily” on what Hjaltland can build to provide relief for the waiting list and that he wasn’t sure the government’s decision made short-term sense, particularly for island communities.
“In the long term the rationale to achieve efficiencies is sound, but I would question their methodology,” he said. “To make housing associations more efficient by cutting their funding to me doesn’t seem to offer a short-term solution, especially in a Shetland context when the local housing association is doing its very best to deliver what it can.
“There’s a limit to what Hjaltland can do and it has more of an impact in island authorities where there’s less scope for the efficiencies that can be achieved in central belt areas.”
Shetland’s MSP Tavish Scott said he had written to communities minister Stewart Maxwell asking him to review the decision.
“My principal concern is what it will mean in terms of Hjaltland’s ability to build new properties for people in
Shetland needing housing,” Mr Scott said. “We have a housing list that is getting worse and worse; therefore there is no reduction in the number of families and individuals needing to rent accommodation. We need an increased allocation, not a cut [but] all they seem to think about is the central belt and not the much more difficult issues that arise in the islands.”