Payments to Housing Associations are being increased to ensure construction work continues in the current economic climate.

The standard Housing Association Grant assumptions are rising by an average of six percent. This will mean an additional grant of between £4,000 and £5,000 per house.

These measures have been taken in response to the current financial situation and to support housing associations during this difficult period. The Government is committed to the role of housing associations and to ensuring that they build the maximum number of affordable homes for the public subsidy available.

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The changes in Housing Association Grant assumptions take immediate effect and will apply until to the end of 2009-10.

Cabinet Secretary for Health and Wellbeing Nicola Sturgeon said: "In the coming year we are committed to spending a record level of resources on affordable housing. Our budget of £644m will allow us to build more homes, support the construction industry and keep the economy moving.

"We have listened to concerns from Housing Associations and have made changes to Housing Association Grant assumptions. This will ensure that we continue to maximise the number of new homes built, increase the likelihood of meeting the 2012 homelessness target and deliver value for money for the public purse."

Brian Gegan, Chair of the Scottish Federation of Housing Associations said:"The SFHA believes that we must maximise the number of homes that can be built with public subsidy. We must seek to get the best value from every public pound which is put into our sector. Housing Associations have been delivering high quality homes for over 30 years in Scotland."

(GK/BMcC)