Brexit uncertainty could put the city council’s “ability to build houses” at risk – amid a funding shortfall of almost £72million.
The City of Edinburgh Council has committed to build 20,000 affordable homes in the next decade – but success could be derailed by the unknown outcomes of Brexit having an impact on supply chains.
Since the commitment was made in 2017, 2,118 homes have been completed and a further 3,101 homes have been approved – while 1,700 approvals and 1,300 completions are expected this year.
The council’s strategic housing investment plan (SHIP) for 2020 to 2025 – outlines the authority’s housebuilding programme, which includes building 9,500 homes.
SNP councillor David Key quizzed housing officials whether Brexit could have an impact on the plans.
He said: “How do you think Brexit, if it ever happens, might affect our ability to build houses – particularly in terms of the cost of materials and personnel to do the building?”
Housing services manager, Elaine Scott, said: “There are underlying issues in relation to the construction industry capacity, the need to modernise that industry and that’s something we’re working with government and other partners on.
“Brexit is happening on top of that. Those challenges are essentially already there and Brexit is part of that dimension that needs to be looked at.”
Housing, Homelessness and Housing Convener, Cllr Kate Campbell, said the council is concerned about the impact Brexit could have on its strategy.
She said: “If we talk about the amount of subsidy needed per home, that will change because construction costs change. Brexit is one i don’t think we can ignore both in terms of supply chains and in terms of skills. We are doing a lot of things to mitigate that – but actually there are serious concerns about what impact it may have on construction costs and therefore our ability to build houses.”
The council currently has a £71.8m gap in grant funding from The Scottish Government in the plan. But “due to the strength of the pipeline programme”, the council has managed to secure an extra £21.2m in grant funding over the last two years and an additional £3.1m at the beginning of 2019/20.
Ms Scott said the council has “sufficient funding to move forward with our affordable housing programme”.
She added: “Grant funding is only a small part of the money that goes into the programme.”
Labour councillor Gordon Munro called for the Scottish Government to provide more grant funding.
He said: “Edinburgh is using every tool at its disposal but it still needs more money.
“This report says we need a 44 per cent increase in grant funding from Holyrood to fill a shortfall of £71.8m in funding to 2021. Even this will not be enough to meet the ambitious target of 20,000 homes. Holyrood has budget surpluses for the last two years of £453m and £449m, some of which could build homes in Edinburgh.”
Conservative housing spokesperson, Cllr Jim Campbell, raised concerns of a skills shortage following the UK Government’s commitment to build more houses – asking officials “Are we worried about skills going south of the border?”
He added: “I think we are deceiving our fellow citizens if we don’t address that fundamental issue of supply and demand. If we believe that housing is too expensive in the city, then we have to look at what can be done around the supply side to try and change that.
“We remain a popular city, we have people who want to come here to live here or to visit. As long as that continues, if we don’t look at the supply side, what will happen is prices will continue to rise.”
