Published: Thursday, 25th June, 2009 7:30am

1,000 affordable homes

AN EXTRA £100 million investment to create 1,000 new affordable council homes was given the green light by East Lothian councillors on Tuesday.

At a meeting of the full council in Haddington, elected members agreed to revise the Housing Revenue Account budget to including an additional £100 million expenditure on affordable housing over the next five years.

The funding, which adds to a £39m investment already earmarked for affordable housing, will mainly come from increased borrowing.

Council bosses say the massive cash injection presents a 'significant acceleration' of the council"s housing building programme while also providing vital support for the construction industry during the economic recession - though opposition councillors expressed concern that the plans would see existing council tenants footing the bill for the creation of future homes.

The council has about 8,000 properties, with 50 per cent of its stock having been sold under "Right to Buy" legislation.

Councillor Stuart Currie, cabinet member for housing and community services, told the meeting: 'With homeless numbers rising and the turnover of properties falling, it"s clear that we need to take urgent action if we are to make a real difference in our communities and address the shortfall in the number of affordable homes.

'Over the past six months, East Lothian has received significant levels of investment from the Scottish Government for both council and housing association development. This funding is already being put to good use during 2009/10, with the go-ahead being given for a minimum of 300 new affordable homes.'

Over 5,000 people are on the housing waiting list while, last year, the stock turnover dropped to around 300 homes.

The exact amount spent of the latest investment will vary each year depending on the building opportunities available but has been estimated at between £5m and £35m annually, culminating in a total of £100m over five years.

The council is also to explore recent changes to Scottish Government"s rules on council tax receipts, specifically in the areas of second homes and empty homes discounts, to increase funding.

It will be seeking ministerial approval to use this revenue of around £2 million over the five-year period towards the cost of borrowing for new council houses.

However, Councillor Willie Innes, Labour Group leader, expressed concern that existing council tenants would be the ones to 'pick up the tab' left by the massive investment, in the form of increased council rents.

In the report of the proposals, written by council head of finance David Spilsbury, it states that the budget is based upon 5.2 per cent rent increases in each of the next five years.

Mr Innes added: 'Obviously £100 million is good news for affordable housing in East Lothian.

'Though I think it"s really important that we get the opportunity to debate this in detail as there are aspects of this paper that would be a problem for us (Labour) to accept.

'I"ve serious concerns about the council providing affordable housing that we don"t have ownership of.'

Mr Spilsbury report also stated that the budget plan included £11 million a year to be spent on modernisation of existing properties.

Mr Innes pointed out that the £100 million investment was concentrated on adding to the 'new housing market' and suggested that the council considered spending funds on improving the 'second hand housing market'.

In response, Councillor David Berry, council leader, said that the 'key thing' was that all councillors supported the 'principle' of the paper.

'Whether we set the rent increase at 5.2 per cent will be a mater for debate but the principle of this report doesn"t have to be comprised,' he said.

'Something like 1,000 new houses is something that we should all be supportive of in this chamber.'

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