Scottish Government plans to address cuts to affordable rented housing through private investment are in danger of destabilising Scotland's social housing, the Scottish Federation of Housing Associations (SFHA) has warned.

During her opening speech at SFHA's Annual Conference in Glasgow, Chief Executive Sally Thomas, warned of the risks of withdrawing state support for affordable rented housing and said that relying on private finance would leave housing associations and social tenants facing a huge financial burden.

The warning follows a 'hammer-blow' £196m cut to the affordable housing programme in the previous Scottish Budget and the declaration of a national housing emergency by the Scottish Government last month.

While the new First Minister has said that increasing the supply of affordable homes is a priority, there is an increasing government focus on increasing the role of private finance in social housing. Currently, housing associations and co-operatives generally receive around half of the funds needed to build homes from public funding – with this previously being higher- using that to leverage another 50% of private funds. SFHA say changing this model would destabilise the sector – and leave social tenants with the burden.


A recent Westminster committee report outlined the impact of similar moves in England, concluding that in some cases, 'poorly designed investment models' had led to poor outcomes and poor housing quality for tenants.

In her speech to delegates, Sally Thomas said: "Not only has the Scottish Government slashed the public grant available, it's also in danger of destabilising the very concept of state support for social housebuilding.

"We're not against the concept [of private finance] – after all, our members already double the amount of government funding that's provided, through their access to private funders.

"But all of the proposed models introduce more risk and uncertainty... So let's be clear: this is not the route to building social housing at scale."

She added: "We know that this Scottish Government believes that one of the worst mistakes that have been made in recent memory was the introduction of the Private Finance Initiative (PFI). The First Minister has called it a 'crippling burden' for government and local authorities.

"So, quite simply, we can't drift into the introduction of PFI for Scotland's social homes, leaving councils, housing associations and ultimately social tenants with a crippling financial burden for years to come."