Scottish Government proposals to slash funding for low-cost housing in the Highlands will drive building firms out of business, industry leaders said last night.
The Scottish Building Federation (SBF) described the cuts as a “hammer blow” to companies in the region which could lead to “substantial lay-offs”.
And Tulloch Homes chairman David Sutherland said “blinkered” ministers were spending hundreds of millions on a new Forth Road Bridge while “young couples and pensioners see their hopes of a new home move further into the future”.
Housing and homelessness charity Shelter Scotland said thousands of people in the Highlands need a roof over their heads, and described demand for affordable rented properties as “acute”.
Highland Council’s grant for the construction of affordable properties is to be almost halved, from £32million to £17.5million in 2011-12.
Nearly 400 low-cost homes will be completed in the Highlands this year, but the cut could see 200 fewer homes being built next year.
SBF’s chief executive Michael Levack said: “We expected cuts but these are even worse than we had feared.
“This is yet another hammer blow for the Highland construction industry.
“Such a drastic cut in public funding will stifle the region’s economic recovery, forcing an increasing number of younger people to leave the Highlands in search of a job and an affordable roof over their head.”
He added: “I’m hearing many horror stories of Highland construction firms, desperate for work, forced to put in suicidal tenders to secure an ever-diminishing supply of public-sector contracts. For some of these firms, this latest announcement may be the final nail in the coffin.”
Mr Sutherland said: “The government has its priorities badly wrong when it is taking a slash-and-burn approach to affordable housing at a time when the need of ordinary families is greater than ever.
“Squeezing council budgets so sharply is not only severely damaging to the hopes of people trying to get on the housing ladder and to the construction sector, but it is also extremely harmful to local economies at a time when such economies, particularly in rural areas, are fragile.”
“It is a blinkered approach when the government can spend a fortune on looking at another Forth Bridge.
“If you don't keep building a sustainable stream of affordable homes, the price will keep going up relative to people's incomes. That is so unfair on those who have been on the waiting list for so long. Everyone's a loser.”
Willie Gray, managing director of Inverness-based William Gray Construction, said: “The 45% cut in investment in affordable housing could mean almost 200 fewer homes getting built in the Highland region next year.
“That’s a huge reduction, not just for building firms such as my own, but for all of the associated services and trades that rely on our industry for new work.”
Highland councillors were told last week the government’s funding would be reduced at a time when more than 10,000 people are on housing waiting lists.
Housing and social work chairwoman Margaret Davidson said yesterday: “It is the potential tenants who will be affected.”
Council budget leader David Alston said the government’s figures were “indicative” at this stage.
Shelter Scotland’s head of communications and policy Gordon MacRae said: “Across the Highlands, thousands of people are in need of a home, either homeless or stuck on a waiting list. It’s clear the need for more affordable rented homes is acute.
“We were disappointed the government cut investment in housing in the recent budget negotiations and failed to support the ambition of local councils to deliver the homes local communities need.”
A government spokeswoman said the figures were “simply planning assumptions”. Detailed allocations are due to be revealed next month.