The majority of Scottish housing associations believe Brexit will have a detrimental impact on the construction industry's workforce, according to the Scottish Federation of Housing Associations (SFHA).

In its new report, 'The Potential Impact of Brexit on Housing Assocations in Scotland', nearly 70% of respondents think the UK's decision to leave the European Union will decrease the capacity of the industry's workforce.

In addition, over 80% believe Brexit will impact on the supply chain of trade and building materials through increasing costs in general – inflation and exchange rates – and in building materials and components in particular.

Key areas of concern include:

• Capacity of the construction industry to deliver new social housing developments

• Financial investments via European funds for social housing

• Equally weighted were: workforce capacity for service delivery and private sector investment in social housing

• Potential changes in regulation and procurement

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• Demand for social housing and future developments

However, some respondents suggested the decision could present new opportunities when it comes to developing a greater supply of Scottish and British construction trades and an increased workforce.

The majority of respondents said they have not experienced any change in attitude from potential private finance providers or investors since the referendum, while two thirds do not foresee any change on the Scottish Government's Housing Association Grant (HAG) rate.

However, there are examples of uncertainty and concerns in future growth and development plans due to current discussions with lenders, while some participants expect consider overall pressure on Scottish public finances may result in reductions of HAG overall.

Overall, 90% of respondents agreed Brexit will 'significantly restrict' access or 'restrict' access to the European Investment Bank, European funds such as the European Social Fund, and the European Regional Development Fund. Many communities have benefited from the wider community development work which housing associations do, much of which is currently paid for using EU funds.

Mary Taylor, Chief Executive of the SFHA, said it is a "huge concern" the majority of HA's think Brexit will decrease capacity of the construction workforce.

"While there is little optimism about the challenges ahead, there is a recognition that it may prompt better training and employability opportunities," she said.

"However, to exploit those effectively, and minimise disruption, we need to start acting now. I have already written to Scottish Ministers to encourage them to create a significant number of apprenticeships in order to safeguard the future of the housebuilding sector in Scotland.

"Access to funding and investment is also an area of huge concern for the social housing sector, and we will be seeking clarity on the situation as negotiations progress."

(LM)