SALMOND POLICY IS 'STRANGLING AFFORDABLE HOUSING IN THE HIGHLANDS' - MP demands change to policy that is making economic crisis worse

4.17.00pm BST (GMT +0100) Mon 13th Oct 2008

Changes to the funding of housing associations made by the Scottish government are combining with the credit crunch to create "a vicious circle that is strangling affordable housing in the Highlands", Highland Liberal Democrat MP Danny Alexander said in a letter to First Minister Alex Salmond today.

The Scottish government has told housing associations that a higher proportion of the cost of new developments has to be raised from the private sector. As a consequence, many simply cannot afford to proceed with new developments. On Friday, Mr Alexander opened the new 'Moorings' housing development by Cairn housing in Inverness, which would not have gone ahead under the new rules.

Mr Alexander has asked the First Minister to review the policy immediately, and in the meantime to return to the old rules so that new developments can be planned. This is important to meet the growing need for affordable homes as well as to support the house-building sector, he said. A full text of the letter is attached.

Mr Alexander said:

"There is a consensus across the housing sector in the Highlands that the Scottish government's new approach to funding housing associations will reduce dramatically the number of affordable homes built in the Highlands - and in some areas could stop development completely.

"Governments have a responsibility to help people through the economic crisis - but this policy is making it worse.

"There is a desperate need for homes that people can afford to live in, and sadly that demand is likely to grow as the economic crisis bites. And government-funded work could help to reduce job losses in the house-building sector.

"I hope Mr Salmond will agree to my suggestion to immediately review this policy, and return to the old rules in the meantime. The alternative is that government policy and the economic crisis will create a vicious cycle that will strangle affordable housing in the Highlands."