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The voice of Scotland’s vibrant voluntary sector

Published by Scottish Council for Voluntary Organisations

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Housing associations fear impact of Brexit

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Leaving Europe is all about damage limitation say Scotland's housing associations

Scottish housing associations fear Brexit will have a negative impact on their finances and their plans for future housing developments, a new survey shows.

Key areas of concern highlighted in the report, The Potential Impact of Brexit on Housing Associations in Scotland, released by the Scottish Federation of Housing Associations (SFHA), are: ongoing uncertainty; financial impact on private finance; and the possible impact on construction and workforce supply chain and costs.

However, the report also found some organisations remain pragmatic and see some balance between the risks and opportunities of Brexit.

Nearly 70% of respondents think Brexit will decrease the capacity of the construction workforce to deliver on new social housing developments and over 80% believe it will impact on the supply chain of trade and building materials through increasing costs in general – inflation and exchange rates – and in building materials and components in particular.

One respondent stated: “Many components are sourced from the EU, or contain materials sourced from the EU, which could potentially result in cost increases or shortage of supply if trade agreements are not in place when the UK leaves the EU.”

Two thirds of respondents do not foresee any change on the Scottish Government’s Housing Association Grant (HAG) rate but some consider overall pressure on Scottish public finances may result in reductions of HAG overall.

Mary Taylor, chief executive of the SFHA, said: “The capacity of the construction industry to deliver new social housing is paramount at a time when 50,000 affordable homes are to be delivered within five years. It is therefore a huge concern that almost 70% of respondents to our survey think Brexit will decrease capacity of the construction workforce."

Not surprisingly, 90% of respondents said Brexit will ‘significantly restrict’ access or ‘restrict’ access to three investment options in particular – the European Investment Bank, European funds such as the European Social Fund, and the European Regional Development Fund.

Many communities have benefited from the wider community development work which housing associations do, much of which is currently paid for using EU funds.

Taylor added: “While there is little optimism about the challenges ahead, there is a recognition that it may prompt better training and employability opportunities. However, to exploit those effectively, and minimise disruption, we need to start acting now. I have already written to Scottish Ministers to encourage them to create a significant number of apprenticeships in order to safeguard the future of the housebuilding sector in Scotland.

“Access to funding and investment is also an area of huge concern for the social housing sector, and we will be seeking clarity on the situation as negotiations progress.”