Scottish Government axes £100m from renewal budget

Funding for housing and regeneration in Scotland is to be sliced by almost £100 million under plans unveiled yesterday by the Scottish Government.

Scotland’s draft budget for 2011/12 states that funding for housing and regeneration will be cut from £488 million in 2010/11 to £394 million in the next financial year – representing a 20 per cent reduction.

However, the budget also announces £2.5 billion of infrastructure investment, to be delivered by the Scottish Futures Trust, a charity set up by the Scottish Government to finance public infrastructure projects.

Scottish Futures Trust will deliver a package of projects that includes:

- £11 billion of transport projects, including the £230-290 million Border Railway project, and a number of road improvement schemes;
- £750 million of education projects, including specific projects within Scotland’s Schools for the Future schools improvement programme and a number of college modernisation projects; and,
- £750 million of health projects, including up to £300 million of improvement projects for individual hospitals, health centres and mental health facilities across Scotland.

Barry White, chief executive of the Scottish Futures Trust, said: "This £2.5 billion of investment in Scotland’s infrastructure is a good deal for Scotland. It will support economic recovery as well as growth and help protect jobs in the construction industry."

The budget also announced plans to expand the Scottish Government’s National Housing Trust affordable housing scheme, which enables councils to make more affordable homes available for below market rent value in areas where demand outstrips supply.

Affordable housing providers will be able to bid for a share of Scotland’s new £50 million Jessica fund to boost regeneration and urban development, according to the budget. The Joint European Support for Sustainable Investment in City Areas programme provides financing for urban renewal and development projects, as well as for social housing provision, in European Union member states.

Meanwhile, the Scottish budget announced 34,500 new skills training opportunities in 2011/12, in addition to increased support for new businesses through the Scottish Investment Bank.

It also announced that funding for Scottish third sector organisations will shrink by 24 per cent, from £35.5 million this year to £27 million in 2011/12.

Scottish finance secretary John Swinney said: "This is a budget that addresses a financial challenge without precedent since Devolution. To address the challenge I have taken steps to reduce the impact of the cuts where possible.

"We have placed at the heart of our decision making our determination to create economic opportunities, protect household income, support frontline services and improve our environment."

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