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Scottish housing associations, local authorities and the Scottish executive agency Communities Scotland have pledge...
Scottish housing associations, local authorities and the Scottish executive agency Communities Scotland have pledged to work together constructively when housing funding arrangements change in future.

Under the Housing (Scotland) Act 2001, the Scottish executive has powers to place government investment in housing under council control enhancing the strategic role of local authorities. This means local authorities will be able to distribute the money currently allocated to housing associations via Communities Scotland.

Speaking this morning in advance of a ministerial meeting with Iain Gray, Cosla housing spokesperson Alistair Gray said: 'Decisions about the way housing development funds are spent should be made at the local level. These decisions will be taken in the context of well-researched local housing strategies, which councils are compiling with key stakeholders under the terms of the Housing Scotland Act.

'In a situation where numerous local housing providers will be competing for funds, we will clearly demonstrate that money for housing is allocated fairly and transparently in line with local needs and that the outputs from public investment are maximised.'

SFHA Chair Anne Lear said: 'Cosla, Communities Scotland and SFHA are keen to ensure that the any new housing investment systems are efficient, and are developed through careful planning and negotiation with housing providers. We are committed to getting this right, and so between us we've identified a list of issues that need to be dealt with.

'We will take the best from the current system and work together at a national and local level to ensure that local communities and housing providers deliver the right product at the right price.'

Maud Marshall, Communities Scotland said: 'Communities Scotland is currently working closely with councils to agree local housing strategies. These new strategies will give an up-to-date assessment of the areas which are most in need of investment in the future. By working together nationally and locally, we can ensure that this investment continues to be directed strategically, and at the people who need it most.'

Among the issues raised in a Memorandum of Understanding are the need for proper monitoring of the effectiveness of the new arrangements, 'checks and balances' to ensure fairness between landlords, and a framework which creates value for money and a 'commitment to excellence'.


1. Under current arrangements, development funding could transfer to Local Authorities from the New Executive Agency in two circumstances:

following the transfer of the local authorities housing stock; or

if stock has not transferred, within the context of the single housing planning process - 'where appropriate checks and balances were in place, where RSLs and funders were supportive of any proposed change and where there was otherwise general agreement locally.'

2. The SFHA is the representative body for housing associations and co-operatives in Scotland. It currently has about 190 members responsible for 140,000 houses.

3. Cosla is the representative voice of Scotland's unitary local authorities.

4. A copy of the Memorandum agreed between Cosla, Communities Scotland and SFHA is attached.

Convention of Scottish Local Authorities

Scottish Federation of Housing Associations

Communities Scotland

Transfer of Development Funding

Memorandum of understanding between Cosla, Communities Scotland and SFHA for the transfer of development funding from Communities Scotland to Scottish Local Authorities.


Scottish Local Authorities have been actively developing their strategic and enabling role in the relation to housing and housing related matters. This reflects the desire to meet the challenges of modern government and also to work in partnership with housing associations, private developers and other partners including Communities Scotland and the Enterprise companies.

This memorandum has been agreed by the three organisations to assist with the development of a framework for the transfer of development funding from Communities Scotland to Local Authorities. Such transfers have been made possible by the passing of the Housing (Scotland) Act 2001, and have been promoted by the Executive as an integral part of the strategic and enabling role. The framework will include the development of a set of checks and balances that should be addressed to ensure probity with regard to development funding and the development of appropriate advice, guidance and training to ensure that this transfer is carried out as smoothly as possible so as to avoid disruption to customers at all levels.

Common Understanding

All parties wish to ensure that the transfer of development funding to Local Authorities is undertaken on the basis of:

1) Maintaining the ability to invest the development-funding programme in accordance with the priorities as set out in the Local Housing Strategy, including delivering on commitments previously agreed with Scottish Homes or Communities Scotland.

2) Recognising that individual Local Authorities, in taking on the development funding function, will seek to proceed at a pace, which reflects local needs and circumstances.

3) Developing together the criteria, known as the 'checks and balances'.

4) Identifying and addressing the issues relating to the effective transfer of development funding, including local housing strategies, an appropriate resource allocation methodology, required skills and resources, transparent budgets, and key stakeholder support for this.

5) Seeking to introduce improvements to the process which maximise the advantages gained from modernising procurement practices and which ensure that the outcomes clearly benefit local strategic objectives.

6) Developing a consistent appraisal methodology and monitoring and evaluation framework across all Local Authorities, supported by an appropriate operating system.

7) Developing a framework that clearly demonstrates value for money and a commitment to excellence.

8) Protecting the rights of staff affected by the transfer process.

January 2002

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