The Scottish Government plans to invest £1.5bn in affordable housing over the next three years, with the hope of delivering 21,500 new homes across Scotland. The Government has also said that it will be cutting the level of subsidy per house that housing associations have to spend.

The Scottish Government pointed to the level of subsidy in England to defend this measure. In 2006-07, subsidy levels in England averaged £62,000 whereas in Scotland the figure was £77,000, it therefore argues that there is ‘substantial scope to make savings’.

This is not a sentiment shared by the Scottish Federation of Housing Associations (SFHA). The SFHA have warned that cutting the subsidy given to housing associations will mean that extra cost will have to be covered by increases to the rent, therefore making housing less affordable.

David Stewart, good practice advisor for the SFHA, told PIN: “Housing associations had not wanted to raise rents but we would now estimate for rents to rise 1% above the Retail Price Index (RPI) for the next 30 years. A rise in rents would affect the financially vulnerable members of society with an increase in people falling into the benefit trap and making it harder for those who are already there to get back out.”

When PIN put these concerns to the Scottish Government, a spokeswoman said: “The assumption for rent increases is based on the performance reported to us by housing associations. Current rent levels are generally affordable and will remain so if rents were to rise by RPI +1%, as associations have planned.”