The Scottish Government has been warned that it needs to be more honest about what its funding of new social rented housing can actually provide.

In an opening address to the Chartered Institute of Housing Scotland conference in Glasgow, Chair Jim Strang called for politicians and civil servants to come clean about the scale of this year’s 35% budget cuts and the likely numbers of affordable homes the country can expect to see.

The professional body for Scotland’s housing sector, The Institute, said big question marks hang over the Scottish Government’s £50m 'innovation and investment fund' announced in February. The majority of this is meant to be targeted at building new social rented homes.

Housing associations have been told their £20m part of the fund is primarily for social rented housing, but CIH Scotland says that with a £40,000 per house grant benchmark compared to around £77,000 subsidy in recent years, the money will not go far in building for people in serious housing need.

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Strang, who is also the chief executive of Parkhead Housing Association in the east end of Glasgow, commented: "Most associations will struggle to make even half of any new provision 'social rented housing', as opposed to other tenures such as shared equity or mid market rent. We think the Scottish Government knows this only too well, but doesn't want to say it. We fully acknowledge that money is tight and that new tenures will be an important part of the landscape in some parts of the country, but there’s an elephant in the room here – everyone knows the reality but neither Ministers nor officials are coming clean on it.

"With a subsidy benchmark of £40,000 per unit, you just can't get 75% or 80% social rented housing out of this fund. Other question marks over the fund include the fact little or nothing will actually be paid out in 2011/12 as the grant is not paid until completion – so is this a commitment rather than actual funding for next year? And in areas where associations have worked in partnership to develop, they will now be bidding directly against each other.

"The Scottish Government really needs to come off the fence and commit to research and set out criteria for what an affordable rent is. We are not asking for a straightjacket, but the Government must set a realistic benchmark. Then when it funds new development, it can ensure the funding packages allow affordability to be met."

(JG/KMcA)