‘Real risk’ large part of reinstated housing funding goes to more urban areas
WARNINGS have been sounded that a U-turn from the Scottish Government on housing funding may end up benefiting urban areas more than island ones.
Shetland Islands Council (SIC) leader Emma Macdonald suggested reinstated funding could end up going to urban areas where housing crises have been declared.
Last year the council had been advised to plan housing developments over the next five years against a backdrop of reduced government funding.
This resulted in timelines of some developments, such as the Knab redevelopment, being affected.
A recently approved strategic housing investment plan (SHIP) for 2025/26 was £16 million down in total over the next five years compared to the previous year’s programme.
Some projects were also removed from the SHIP and placed on a “shadow” programme.
However, not long after the SHIP was approved the Scottish Government published its draft budget for 2025/26 – with more funding pledged for housing.
This budget had been bolstered by increased funding from Westminster following Labour taking charge in the UK Government.
The matter was raised at a meeting of the SIC’s development committee on Wednesday, where members sought an update on housing funding.
The message back was that it remains unclear at this stage where the reinstated funding will go.
But leader Macdonald warned members not to get their hopes up and said there was a “real risk” that a large part of the reinstated housing funding goes tackling “significant issues” in the more urban areas.
The Shetland North councillor said the issue has been raised at Convention of Scottish Local Authorities (COSLA) meetings, and the pressure coming from some urban areas could mean the government will prioritise them.
Macdonald said the SIC will continue to make the case for the government investing in island communities like Shetland.
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But she said members cannot assume the money will be coming back in full to Shetland.
“We are obviously making the case really strongly for the importance of investing in island communities to make sure that we can grow our housing so we can grow the industries that are really important to Scotland,” Macdonald said.
“But I think there is a real risk that actually we’ll see it reinstated into the budget, not necessarily into our budget.”
Development director Neil Grant also said that larger local authorities who have declared housing crises will “undoubtedly” be a consideration for the government.
Recently elected Shetland North councillor Andrew Hall has initially asked whether projects like housing at the former Moorfield Hotel side, which had been moved to the “shadow” programme, could be brought back to the SHIP in light of the government being set to increase its budget.
He said Moorfield could be a “quick win” given it has planning consent.
Grant said the housing team have already been operating with a shadow programme and that the staff are “pretty on the ball” regarding switching projects.
However, he said projects across the housing programme needed to be synchronised.
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