Item 10 - Housing Capital Investment Programme
West Dunbartonshire Council · 25 February 2026
Back to Housing & Communities Committee — 25 February 2026 and its agenda
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WEST DUNBARTONSHIRE COUNCIL Report by the Chief Officer, Housing Housing and Communities Committee: 25 February 2026 __________________________________________________________________ Subject: Housing Capital Investment Programme 1. Purpose This purpose of this report is to provide the Housing and Communities Committee (the Committee) with an overview of Housing Revenue Account (HRA) proposed capital investment and spending plans and assess options for future investment. 2. Recommendations 2.1 It is recommended that the Housing and Communities Committee: (i) Notes the content of this report and the financial pressures on the Council’s Housing Revenue Account and the actions that have been taken to improve the wider health of the HRA and ensure tenant and service investment priorities are delivered, including the reduction in the borrowing requirement in 2025/2026 by £6m as outlined in 4.10 of this report; (ii) Approves that the Council’s Better Homes Investment Programme proceeds as detailed in sections 4.14 - 4.20 through Option 2 which will see a proposed 50% reduction in capital spend on environmental works form part of the tenant rent consultative exercise for 2027/28 which will commence in October 2026, subject to discussion with tenant representatives. (iii) Approves the delivery of the Council’s More Homes Affordable Housing Supply Programme set out in the Strategic Housing Investment Plan (SHIP) and proceeds as detailed at 4.37-4.47 of this report, and with Option 2 to target the delivery of 25 new council homes every year from 2028/29-2031/32, subject to ongoing review in terms of deliverability and affordability and discussion with tenant representatives. (iv) Note the remedial actions led by the Chief Officer, Housing to address the financial challenges by progressing a plan to replenish and maintain HRA reserves to above prudential levels and work towards a CFCR (Capital Financed from Current Revenue) strategy. The aim of this approach is to reduce future borrowing as seen with the £6m borrowing reduction in 2025/26 and mitigate future borrowing cost risks, while still delivering tenant and service investment priorities and (v) Invites the Chief Officer, Housing to fully refresh the HRA 30-year business plan and develop a future rental and investment strategy ITEM 10
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and report back to the Housing and Communities Committee later this year. 3. Background 3.1 On 5 March 2025 the Council approved an 8% rent increase for 2025/26 to deliver tenant priorities and the Housing Capital Investment Plan for the 5- year period until 2029/30. 3.2 The capital investment plan estimated expenditure over the five-year period of £291m with capital grant / other income of £50m resulting in a net borrowing requirement of £241m. This estimated borrowing was split between £175m (73%) for investment in current homes and £66m (27%) to deliver the More Homes West Dunbartonshire programme inclusive of the Council’s buyback programme. This is illustrated in Table 1. Table 1 – Housing Capital Investment Plan 2025-2030 agreed March 2025 HRA Financial Position 3.3 The HRA, consistent with many other HRAs across Scotland, is under financial pressure. Whilst the HRA revenue budgetary control report (BCR) presented to the Committee today projects a 2025/26 in-year surplus of £1.087 million this has been driven by lower HRA debt servicing costs including a non-recurring in year benefit through debt restructuring. The BCR also confirms there remain high cost and demand pressures in areas such as: Responsive/void repairs Bad debt provisions Void loss and council tax Furthermore, staff costs have increased in particular due to the increase in employer national insurance contributions. This has proved a challenge to a 25/26 £m 26/27 £m 27/28 £m 28/29 £m 29/30 £m Total £m 1 More Homes Expenditure 30.2 33.7 16.5 12.7 23.3 116.4 2 More Homes Grant Income -15.3 -11.9 -4.8 -5.8 -12.6 -50.4 3 Net More Homes Expenditure / Borrowing Requirement (1-2) 14.9 21.8 11.7 6.9 10.7 66.0 4 Better Homes Expenditure / Borrowing Requirement 40.4 36.8 35.9 31.7 30.0 174.8 5 Total Borrowing Requirement (3 + 4) 55.3 58.6 47.6 38.6 40.7 240.8 6 % of Borrowing that relates to More Homes (including buyback programme) 26.9% 37.2% 24.6% 17.9% 26.3% 27.4% 7 % of Borrowing that relates to Better Homes 73.1% 63.8% 75.4% 83.1% 73.7% 72.6%
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number of housing providers across Scotland and is one of the causes of above inflation rent increases in 2026/27 and beyond. 3.4 Table 2 provides a HRA financial analysis, alongside the proposed HRA capital investment detailed in the rent consultation exercise. It confirms the Council has: higher rents than most other Scottish councils (though below the national social rented average) a lower proposed rent increase in 2026/27 than most Scottish councils the second highest housing debt level per home of all Scottish Local Authorities Consequently, as with public sector finances in general, HRA finances will remain challenged for the near future with revenue and capital plans requiring rent increases in the region of 7% over the next few years to provide sufficient income to meet increasing operating and debt financing costs. Table 2 also advises of expected HRA capital debt levels in March 2030 based on existing borrowing plans. Table 2 – HRA Financial Analysis HRA Rent - Rent was increased by 8% from April 2025. The average council house rent in 2025/26 was £102.28. (52-week basis) Scottish Housing Network HRA statistics for the 2024/25 financial year reported West Dunbartonshire had the fifth highest council house rents in Scotland behind Edinburgh City Council, Aberdeenshire, Renfrewshire, and Orkney Councils. Wheatley Homes the largest housing association operating in Scotland (Loretto Housing in West Dunbartonshire) also have a higher average rental charge. Housing Rent Analysis 24/25
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2026/27 Rent Increase - The 2026/27 tenant rent consultation has a base option of a 6.7% rent increase and three additional options. The options are: Rent Increase Includes 1 6.7% (average weekly increase of £6.84) Maintaining all services tenants receive Delivering New Build housing programme Delivering Capital Investment programme to improve existing Council homes Tenant Priority Budget of £200k for tenant- led improvements 2 6.95% (average weekly increase of £7.09) Option 1 plus: Additional expenditure of £140k to re-instate open space maintenance to 2024/25 funding levels. 3 7.2% (average weekly increase of £7.35) Option 1 plus: Additional £3.6m of Capital Investment during 2026/27 expanding the Buy Back Scheme to deliver 24 additional Council homes for rent. 4 7.45% (average weekly increase of £7.60) Option 1 plus: Additional expenditure of £140k to re-instate open space maintenance to 2024/25 funding levels. Additional £3.6m of Capital Investment during 2026/27 expanding the Buy Back Scheme to deliver 24 additional Council homes for rent. There are a range of cost pressures contributing to the rent increase, the key pressures being increased employee costs (pay award, national insurance changes, employer pension costs) and increased debt servicing costs as capital debt increases. HRA financial modelling for the next five years takes account of additional income from new build and buyback properties, and significant revenue cost pressures that require to be addressed including the impact of current capital investment plans on HRA borrowing and associated debt financing costs. This modelling indicates that annual rent increases of around 7% per annum over the period 2027/28 – 2030/31 are needed to provide the sufficient income to meet increasing operating and debt financing costs. The housing service will as part of future planning look at ways to reduce operating costs without impacting negatively on the quality of life of our current and future tenants. The information below highlights the average rent increases across Scottish local authorities in 2025/26.
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As part of our rent consultation exercise, we have benchmarked our proposed rent increase for 2026/2027 with comparable councils. Current available contextual information is provided below. Around 60% of Council tenants receive assistance with rent through housing benefit or universal credit. Council Proposed 2026/27 Rent Increase Aberdeenshire 12% Angus 8% Dundee 8% Falkirk 8% Highland 8% Renfrewshire 7.5% Shetland 7.5% East Ayrshire 7% East Lothian 7% Edinburgh 7% West Dunbartonshire 6.7% Perth and Kinross 6.5% Clackmannanshire 6% Moray 6% Stirling 5.8% Aberdeen 5% Orkney 4% West Lothian 3.5% Rent Affordability - An affordability analysis undertaken prior to the commencement of the Council’s 2026/27 rent consultation determined Council WDC rents are on average £77 (42%) less than Market Rents with all properties comfortably below the equivalent average market rent. In addition, all households on minimum income can afford Council rents assuming the 35% rent to income ratio. Using equivalised income measures, all tenant household types spend under 35% of their income on
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housing, in some cases as little as 14%. Single adults on Universal Credit are the only group exceeding the 30% mark. Reserves - HRA reserves are forecast to be circa £1.70m in March 2026, which exceeds the prudential HRA reserve target of £1.16m. The current rent increase assumption of around 7% per annum over the period 2027/28 – 2030/31 is predicted to maintain reserves at March 2026 levels over the next 5 years. Interest Rates - HRA financial modelling for the next five years assumes a 4.25% interest rate on debt. Interest rates have been volatile over the last 3 years with the interest payable on council debt sharply increasing placing strain on HRA finances. An increase in the interest rate is considered the most significant financial risk to HRA finances. To illustrate, HRA capital debt is forecast to be £414m in March 2027. An increase of 0.25% to 4.50% in 2026/27 would add around £1m annually to HRA costs placing considerable pressure on HRA finances. The current modelled rent increase would need to be increased by circa 1.5%. Similarly, a reduction of 0.25% to 4.00% would reduce HRA costs by £1m annually, this could be utilised by decreasing the modelled rent increase by 1.5% or strengthening reserves. Currently most financial institutions are projecting interest rates will continue to fall, however there is no clear consensus around the speed or depth of the projected reductions. Capital Debt - The HRA had £348m of HRA capital debt in March 2025, circa £33,500 of capital debt per lettable unit (excluding surplus stock). For 2024/25 West Dunbartonshire had the second highest HRA debt level per lettable unit in Scotland. Current HRA capital investment plans will increase debt servicing costs to circa £40m by 2029/30 and contribute to the 7% projected rent strategy needed over the next three years. The Housing Investment Taskforce, established by the Scottish Government, reported in Summer 2025, and set out a series of actions to support investment in new and existing business models. This included an action to seek to write-off of historic HRA debt to provide immediate capacity for new supply. If this were to be achieved, it would require agreement with the UK Government and would have a significant positive impact on the Council’s HRA financial position. 3.5 As a housing provider with landlord responsibilities for over 10,500 properties, the housing service must be agile to continue to deliver tenant priorities in a challenging strategic and financial landscape. A balance needs to be struck between meeting tenant needs, maintaining and improving existing assets, building new homes to meet identified need, and keeping rent levels as affordable as possible. This balance is achieved in West Dunbartonshire through strong tenant participation mechanisms. These have highlighted
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continued tenant support for the Council’s housing investment plans as highlighted below. 3.6 In November 2024, the Housing Service conducted an independent Tenant Satisfaction Survey. The survey highlighted HRA cost pressures to tenants and asked tenants to outline their two most important spending priorities within this context. Feedback overwhelmingly showed that the two top spending priorities for tenants to be a responsive and high-quality housing repairs service and building new Council homes: 3.7 The survey findings were reported to the Housing and Communities Committee on 26 February 2025, which approved the recommendation for the Chief Officer, Housing to ensure tenant spending priorities were reflected in the delivery of investment plans over the next three-year period. 3.8 The tenant satisfaction survey highlighted 86% of tenants felt their rent represents good value for money. Only 2.6% of tenants felt the rent is poor value for money, a reduction from 15% in the previous survey in 2022. Table 3, taken from the Scottish Housing Regulator Charter Return, highlights the Scottish local authority average for this measure is 80%. Table 3 - % of tenants who feel rent represents good value for money. Housing Emergency Council % of tenants Stirling Council 93% Loretto Housing Association (Wheatley) 93% West Dunbartonshire Council 86% River Clyde Homes 85% All RSLs (Scotland) 82% All Social Landlords 82% All Local Authorities 80% East Dunbartonshire Council 76% Renfrewshire Council 70%
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3.9 In May 2024, informed by extreme pressures facing housing and homelessness services in meeting statutory duties, the Council declared a Housing Emergency. This prompted the development of the Housing Emergency Declaration Action Plan which had four strategic themes. Deliver and maintain More Homes - West Dunbartonshire approach to the delivery of affordable housing. Make Best Use of Existing Stock. Enhancing Housing Access and the prevention of homelessness. Strengthen the Financial viability and capacity of the Housing Revenue Account and associated Housing and Homelessness budgets. 3.10 The Scottish Government’s Housing Emergency Action Plan, published in September 2025, sets out a range of enhanced and accelerated actions to tackle the national housing emergency. The plan is structured through the following three pillars: Ending children living in unsuitable accommodation as a vital part of the Scottish Government’s determination to end child poverty. Supporting the needs of vulnerable communities. Building our future – maximising investment in Scotland’s housing sector. The plan includes a commitment of funding of £4.9billion over the next four years to support the delivery of over 25,000 new social rented homes in Scotland. 3.11 This national intervention provides both an opportunity and a challenge. While the enhanced resources will support the expansion of the Council’s Affordable Housing Supply Programme and enable delivery of much-needed new homes, the Council must also ensure alignment with evolving national priorities and demonstrate capacity to secure and deploy any additional funding effectively. Once the Scottish Government makes formal announcements on the aspects of the Action Plan, such as distribution of funding, the Council will review the current programme with a focus on maximising investment opportunities and ensuring the delivery of affordable housing continues to meet the needs of West Dunbartonshire’s communities. 4. Main Issues 4.1 In response to the financial challenges facing the Council’s HRA, the Chief Officer, Housing chairs a weekly HRA Value for Money (VFM) Group. It consists of senior staff across housing and finance and has overseen interventions that have positively impacted on HRA finances, including preventing the HRA from fully exhausting its reserves in 2024/25, and the improved financial position reported to Council. This group is progressing a plan to maintain HRA reserves to above prudential levels and to develop a future CFCR (Capital Funded from Current Revenue) strategy to enable the Council to deliver tenant investment priorities with a reduced need to borrow to deliver those investment plans. 4.2 The HRA VFM Group also targeted efficiencies across HRA income and expenditure in advance of the rent consultation, targeting reduced spend
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across budgets not aligned with tenant and service priorities. These targeted reductions helped reduce the rent increase in the options developed for the tenant consultation exercise which was launched on 30 October 2025 and are outlined in Table 2. This efficiency work will also be one of the building blocks to progress to deliver on a future CFCR strategy that will help reduce future borrowing risks. The consultation closed on the 23 January 2026, and the outcome will inform the rent setting report to West Dunbartonshire Council on 4 March 2026. 4.3 The proposed rent increase of 6.7% - 7.45% will help support the ongoing financial viability of the HRA and provide financial headroom for the capital investment needed to deliver agreed tenant priorities. However, further actions are required to reduce the impact of borrowing commitments over the next period. This will include a full refresh of the HRA 30-year business plan, this essential piece of work will report to the Housing and Communities Committee in Autumn 2026 and inform a future rental and investment strategy from 2027/28 and beyond. 4.4 As highlighted in Table 1, the Housing Capital Investment Plan approved March 2025, assumed borrowing levels of circa £241m, as illustrated below: Year Estimated Borrowing (£m) 2025/26 55.3 2026/27 58.6 2027/28 47.6 2028/29 38.6 2029/30 40.8 Total 240.9 4.5 These borrowing requirements include expenditure to support the decision taken by the Council meeting on 1 March 2023 to approve a 5% rent increase for 2023/24. The 5% rent increase levered borrowing for an additional £50m of capital expenditure over a five-year period (2023/24-2027/28). This investment decision was taken at a time when borrowing costs were at historically low levels. Since that decision was made, global events have contributed to a significant increase in council borrowing costs. 4.6 The decision to borrow an additional £50m and agree the tenant priorities with tenant representatives has led to the following positive outcomes: Scaling up of the Council’s buyback scheme, supported by Scottish Government funding, strengthening the financial viability of the HRA and helping meet housing need particularly in relation to family homes. An agreed approach to eradicating damp and mould issues in council properties through a multi-year investment in environmental sensors. The Council is the sector leader in this area, and this will prove to be prudent expenditure as we prepare for the introduction of Awaab’s law as part of the Housing (Scotland) Act 2025 in March 2026. Awaab’s law is designed to protect social and private tenants from unsafe housing conditions, specifically requiring landlords to investigate and fix damp and mould within mandatory timeframes, it was introduced following the tragic death of 2-year-old Awaab Ishak caused by prolonged exposure to mould in his family’s housing association home in Rochdale, England in 2020.
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Tenant-initiated upgrades to CCTV provision within our multi storey homes to improve the quality of life for the tenants and help minimise vandalism, wider anti-social behaviour and criminality, and reduce future repair costs. 4.7 These three priorities contributed £20.8m of the additional £50m included as part of the Enhanced Housing Capital Programme. The remaining £29.2m has been earmarked to support existing investment programmes including external wall insulation and heating system replacements. Approximately £12.8m has been added to the HRA borrowing since 2023/24 to support these investment programmes. 4.8 As referenced within paragraph 4.3 there requires an element of service intervention to reduce borrowing levels in the short term to help maintain the ongoing financial viability of the HRA and rent affordability for our current and future tenants. These interventions have been led by the Chief Officer, Housing supported by senior colleagues in housing and finance, and they have reprofiled housing investment plans which were reported to the October 2025 meeting of the Council. This reprofiling has ensured tenant investment priorities will continue to be delivered in parallel with the planned reduction in HRA borrowing requirements. 4.9 On 27 August 2025, the Housing and Communities Committee agreed budget adjustments that revised the 2025/26 capital expenditure budget to £55.6m and the capital income budget to £6.3m, resulting in an updated one-year borrowing requirement of £49.3m from £55.3m as illustrated in Table 4 below. 4.10 The Chief Officer, Housing will continue to lead the HRA VFM Group to identify areas where capital and revenue spend can be minimised without significantly impacting on tenant and service priorities and will progress a plan which will reduce borrowing requirements as outlined in Table 4. Table 4: HRA Borrowing Projections Year Approved Borrowing Commitment £m Refreshed Borrowing Commitment £m Proposed Change to Borrowing Commitment £m 2025/26 55.3* 49.3** - 6. 2026/27 58.6* 50.0*** - 8.6 2027/28 47.6* 50.5*** +2.9 2028/29 38.6* 37.9*** -0.7 2029/30 40.7* 37.1*** -3.6 Total 240.8 224.8 -16 *Approved 5th March 2025 ** Approved 27th August 2025 ***Projected 4.11 The impact of reduced borrowing has been included as part of the preparation of the rent consultation exercise with tenant representatives through the Joint Rent Group, which is the established tenant consultative and engagement forum for issues directed related to the financial health of the HRA and is chaired by the Housing and Communities Committee Convener.
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4.12 The Housing Capital Investment Programme is underpinned by a strategic framework aligned to the Council’s housing objectives, statutory duties, and tenant priorities. Those evidenced tenant priorities are highlighted in paragraph 3.6 and confirm the building of new homes to be the top capital spending priority with the lowest being environmental improvements and tackling damp and mould. While the Council continues to explore further options for reduced capital investment, these decisions need to be considered alongside the Council’s legal and regulatory frameworks. 4.13 Specifically, the Council holds a statutory duty to ensure housing stock meets the Scottish Housing Quality Standard (SHQS). This effectively sets a guide for necessary capital expenditure informed by our housing asset management data. Any reduction in investment that compromises these standards would result in a breach of regulations. It would also be counter productive as insufficient planned investment in viable housing stock would lead to the Council incurring significantly higher reactive repair costs in the future. 4.14 Better Homes Option Analysis As a result, three assessed options to reduce spend in these areas from 2027/28 to 2030/31 are as follows: Option 1 – Maintain planned housing investment programme. Option 2 – 50% reduction in spend on environmental works. Option 3 – 50% reduction in spend on environmental sensor programme (tackling damp and mould) Table 5a: Option 1 – Maintain planned housing investment programme. 27/28 £m 28/29 £m 29/30 £m 30/31 £m Total Borrowing Requirement Current Environmental Works 1.2 1.2 1.2 1.2 4.8 Current Environmental Sensor Programme 1.5 1.5 1.5 0.0 4.5 Table 5b: Option 2 – 50% Reduction in Environmental Works 27/28 £m 28/29 £m 29/30 £m 30/31 £m Total Borrowing Requirement Current Environmental Works 1.2 1.2 1.2 1.2 4.8 Option 2 – Revised Environmental Works 0.6 0.6 0.6 0.6 2.4 Table 5c: Option 3 - Environmental Sensor Programme Reduction 27/28 £m 28/29 £m 29/30 £m 30/31 £m Total Borrowing Requirement Current Environmental Sensor Programme 1.5 1.5 1.5 0.0 4.5
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Option 3 – Revised Environmental Sensor Programme 0.75 0.75 0.75 0.75 3 4.15 Tables 5b and 5c illustrate: Option 2 - annual reduction in borrowing of £0.600m and total reduction of £2.4m over 4 years Option 3 – annual reduction in borrowing of £0.750m and total reduction of £1.5m over 4 years 4.16 Table 5d summarised the changes to the overall borrowing requirements for the three options. Table 5d: Revised HRA Borrowing Projections from 2027/28-2030/31. Option 1 Borrowing £m Option 2 Borrowing £m Option 3 Borrowing £m 2027/28 50.5 49.9 49.75 2028/29 37.9 37.3 37.15 2029/30 37.1 36.5 36.35 2030/31 38.6 38 39.35 Totals 164.1 161.7 162.6 4.17 The reduction in borrowing requirement for the three options would reduce debt servicing costs which would support lower rent increases. This is summarised in Table 5e. Table 5e: Indicative impact on rent of options 2 and 3 Option 2 - Reduced Cost of Borrowing £,000 Option 2 - Impact on Rent % Option 3 - Reduced Cost of Borrowing £,000 Option 3 - Impact on Rent % 2027/28 26 -0.04% 32 -0.05% 2028/29 70 -0.10% 88 -0.12% 2029/30 114 -0.15% 146 -0.19% 2030/31 157 -0.20% -69 0.09% Table 5e highlights option 2 would reduce future rent increases by 0.04% in 2027/28 up to 0.2% in 2030/31. Option 3 would reduce future rent increases by 0.05% in 2027/28 up to 0.19% in 2029/30 but require a 0.09% increase in 2030/31 unless the environmental sensor programme was ceased without being inclusive of the Council’s total housing stock. This is because the programme would require to be extended. 4.18 Following approval of the Housing Act 2025, the Scottish Government on 21st January 2026 introduced legislation for Awaab’s Law (detailed in paragraph 4.6 of this report) to come into force across the social rented sector from
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March 2026, starting with tackling damp and mould to ensure cases are swiftly investigated and acted upon as appropriate. 4.19 The Council’s agreed approach to eradicating damp and mould issues in council homes is supported by a strong preventative strategic response through the investment in environmental sensors to prevent future damp and mould issues within our homes and improve tenant’s health and wellbeing. Option 3 as detailed above would dilute this strategic intention. Maintaining the current proposed expenditure would lead to wider revenue savings through the spend to save preventative approach supporting the financial health of the HRA together with the health of tenants. Therefore, the officer view is that the Council should not pursue Option 3. For the same rationale a fourth option which would have seen options 2 and 3 combined was not considered. 4.20 Option 2 is recommended. It provides a £2.4m borrowing reduction consistent with the wider financial strategy for the HRA over a 4-year period with minimal impact on statutory standards, evidenced tenant priorities and also maintains compliance with the introduction of Awaab’s Law through the Housing Scotland Act 2025 and the Council’s wider approach to tenant safety, unlike Option 3 and the potential combined option of 2 and 3. It is therefore proposed that Option 2 will form part of the rent consultation exercise in 2027/28 which will commence in October 2026. Affordable Housing Supply Programme 4.21 A key element of the Housing Capital Investment Plan is the Council’s Affordable Housing Supply Programme. Financing the new build programme, as with every element of expenditure incurs additional costs that adds to financial challenges and requires a strategic approach to ensure the service can deliver on evidenced tenant priorities. In terms of the cost of new build homes this is partially mitigated by a 15% premium applied to new build home rents. The refreshed Strategic Housing Investment Plan approved by the Housing and Communities Committee in November 2025 reprofiled our development plans, which has positively impacted on our projected borrowing requirements in the short term. 4.22 The delivery of new social homes, including new council homes, plays a key role in: tackling the housing emergency combatting poverty, principally child and fuel poverty revitalising local economies and assisting with wider economic recovery negating the impacts of the current cost of living crisis improving social, economic and health outcomes for tenants providing a huge capacity for significant preventative savings to wider society and public finance and delivering net zero ambitions. 4.23 It is also clear the need for new social homes will continue to increase in the economic and social environment the Council is operating in, including demographic challenges such as an ageing population. West
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Dunbartonshire’s Strategic Housing Investment Plan 2026-2031 addresses these challenges. 4.24 Furthermore, the addition of new homes has a significant longer term positive impact on the financial health of the HRA although, as with any expenditure, it does place pressure on rent levels in the short and medium terms. All projects, before commencement, are subject to a robust viability assessment as part of the Affordable Housing Supply Programme grant funding eligibility rules 4.25 The long-term positive impact on the financial sustainability of the HRA from the development of new homes is outlined using the modelling from the currently on-site development at Bonhill. This development delivers 28 new homes including a number of large homes as set out in Table 6. Table 6: Bonhill Gap Site Housing Mix 4.26 Key Financial Assumptions and Model – Bonhill (28 homes) Rental Income – The site is projected to generate £213,552 of rental income in year 1. For future years it has been assumed rent will increase by 3% per annum (general assumption of 2% CPI plus 1%) Capital Costs and Loan Charges - The site has a development capital cost of £6.983m (£249,375 per unit) of which £3.360m was assumed to be funded through Scottish Government Affordable Housing Supply Grant. This therefore requires net borrowing of £3.622m. Based on borrowing £3.622m over 60 years, and assuming a loan interest rate of 4.25%, the Council would repay £10.011m over the life of the loan, including repayment of the principal and the interest. This equates to £166,850 per annum. Operating Costs – Operating costs are assumed to be £2,750 per unit so 28 homes at £2,750 per annum = £77,000. For future years highlighted in Table 7 it has been assumed operating costs will increase by 2% per annum (general assumption of 2% CPI). Operating costs includes all management and maintenance costs including staff, responsive repair and maintenance costs and includes provision for void periods and bad debt provision. Replacement Costs – Assumption there will be no replacement costs in years 1-15 then fixed costs of £1,500 per unit per annum so a total of £42,000 per annum. House Size Sustainability Standard New Homes 1bed wheelchair Net Zero 4 1 bed general needs Net Zero 10 2 bed wheelchair Net Zero 3 3 bed general needs Net Zero 3 4 bed general needs Net Zero 2 5 bed general needs Net Zero 4 7 bed general needs Net Zero 2
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Number of Tenants – 10,500 Table 7: - Bonhill Gap Site Housing Development Financial Modelling Year Rent Revenue (£) Operating Costs (£) Capital Replacement (£) Net Revenue (£) Loan Repayment (£) Surplus /Deficit (£) Cumulative Surplus (£) Per Tenant Impact (£) 1 213,552 77,000 0 136,552 166,850 -30,298 -30,298 -2.89 5 240,355 83,347 0 157,008 166,850 -9,842 -101,184 -9.64 7 254,992 86,714 0 168,278 166,850 1,428 -104,055 -9.91 10 278,637 92,022 0 186,615 166,850 19,765 -63,492 -6.05 13 304,474 97,654 0 206,820 166,850 39,970 35,779 3.41 15 323,016 101,599 0 221,417 166,850 54,567 137,497 13.10 16 332,707 103,631 42,000 187,076 166,850 20,226 157,723 15.02 20 374,465 112,200 42,000 220,265 166,850 53,415 320,281 30.50 22 397,270 116,733 42,000 238,537 166,850 71,687 454,373 43.27 30 503,250 136,772 42,000 324,478 166,850 157,628 1,400,255 133.36 4.27 Table 7 shows, over the 60-year borrowing life, the cost and benefit to HRA. The Bonhill Development, based on this modelling, achieves: Cash-flow positive from Year 7 Cumulative Surplus from Year 13 A 30-year surplus of £1.4m to support the wider HRA. This evidences that the site is financially viable over its life. Furthermore the 48% grant ratio and £249,375 per unit cost maintain the project within affordability thresholds. The 28 new homes will also generate additional council tax revenue. However, the financial modelling highlights a continued need for rent increases to be higher than the CPI rate. 4.28 It should be noted that council tenants in new build council homes are subject to a 15% rental premium and as a result will contribute more to the cost of new home developments through this. Those tenants benefit with lower fuel bills because of the superior energy efficiency performance of the new build homes compared with existing stock. 4.29 The modelling summarised within this report conservatively includes a 60- year lifetime of the new asset (council home). However, in reality our new build homes will be a longer-term asset to the HRA of over 100 years. 4.30 The Bonhill development is one of the Council’s current developments within our wider new home build programme More Homes West Dunbartonshire which has approval to deliver 212 new homes before the end of 2027/28: - Table 8: Current More Homes Delivery Programme Willox Park, Dumbarton Ph1 17 Bank St, Alexandria 22
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4.31 Key Financial Assumptions and Model- More Homes Committed Programme (212 homes) The same modelling scenarios are applied as in Table 7 to this wider programme, (for illustrative purposes it is assumed that all complete in year 1). Rental Income – The More Homes Committed Programme is projected to generate £1,618,752 of rental income in year 1. For future years it has been assumed rent will increase by 3% per annum (general assumption of 2% CPI plus 1%) Capital Costs and Loan Charges - The combined next phase developments has a total development capital cost of £54.06m (£255k per unit) of which £25.44m (£120k per home) is projected to be funded through Scottish Government Affordable Housing Supply Grant. This therefore requires net borrowing of £28.62m. Based on borrowing £28.62m over 60 years, and assuming a loan interest rate of 4.25%, the Council would repay £79.53m over the life of the loan, including repayment of the principal and the interest. This equates to £1.33m per annum. Operating Costs – Operating costs are assumed to be £2,750 per unit so 212 homes at £2,750 per annum = £583k. For future years highlighted in Table 9 it has been assumed operating costs will increase by 2% per annum (general assumption of 2% CPI). Operating costs includes all management and maintenance costs including staff, responsive repair and maintenance costs and includes provision for void period and bad debt provision. Replacement Costs – Assumption there will be no major component replacement costs in years 1-15 then fixed costs of £1,500 per unit per annum so a total of £318k per annum. Number of Tenants – 10,500 Table 9: - More Homes committed new build programme financial modelling. Bonhill Gap Sites, Alexandria 28 Dennystoun Forge, Dumbarton 20 West Thomson St, Clydebank 42 Willox Park Dumbarton Ph 2 22 Ottawa Crescent, Dalmuir 21 28 Bridge St, Alexandria 8 Silverton, Dumbarton 9 O’Hare, Alexandria 6 Queen Mary Avenue, Clydebank 17 Total 212
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Year Rent Revenue (£) Operating Costs (£) Capital Replacement (£) Net Revenue (£) Loan Repayment (£) Surplus/ Deficit (£) Cumulative Surplus (£) Per Tenant Impact (£) 1 1,618,752 583,000 0 1,035,752 1,325,443 -289,691 -289,691 -27.54 9 2,050,587 679,969 0 1,371,618 1,325,443 46,175 -1,156,316 -110.12 10 2,112,105 693,348 0 1,420,757 1,325,443 95,314 -1,061,002 -101.05 15 2,448,509 761,347 0 1,694,162 1,325,443 368,719 216,694 20.64 16 2,521,964 775,174 318,000 1,428,790 1,325,443 103,347 320,041 30.48 20 2,838,493 831,262 318,000 1,689,231 1,325,443 363,788 1,373,238 130.78 25 3,290,591 903,251 318,000 2,069,340 1,325,443 743,897 4,306,661 410.16 30 3,814,697 977,528 318,000 2,519,169 1,325,443 1,193,726 9,345,623 890.06 4.32 Table 9 shows, over the 60-year borrowing life, and the cost and benefit to the HRA. The More Homes Committed New Build Programme based on this modelling, achieves: Cash-flow positive from Year 9 Cumulative Surplus from Year 15 A 30-year surplus of £9.3m to support and strengthen the wider HRA. This evidences that the sites are financially viable over its life. Furthermore, the projected 47% grant ratio and £255k per unit cost maintain the project within the affordability thresholds. The 212 new homes will also generate additional council tax revenue. 4.33 The financial assessment modelled in Table 9 has been scenario tested looking at the following sensitivity scenarios: - Scenario 1 – 4% per annum rent increases (CPI (2%) + 2%) and 2% cost inflation. Scenario 2 – 5% per annum rent increases (CPI (2%) +3 %) and 2% cost inflation. Scenario 3 – 6% per annum rent increases (CPI (2%) + 4%) and 2% cost inflation. Scenario 4 – 5% per annum rent increases (CPI (3%) = 2%) and 3% cost inflation (CPI uprated) Table 10 - More Homes committed new build programme Sensitivity Testing Scenario First Positive Annual Surplus Cumulative Surplus Achieved Year 30 Surplus/Deficit (£) Baseline case (Rent CPI at 2% plus 1% = 3% Operating Costs CPI at 2%) Year 9 Year 15 +£1,193,726 Scenario 1 (Rent CPI at 2% plus 2% = 4% Operating Costs CPI at 2%) Year 8 Year 14 +£1,750,000 Scenario 2 (Rent CPI at 2% plus 3% = 5% Operating Costs CPI at 2%) Year 7 Year 12 +£2,500,000 Scenario 3 (Rent CPI at 2% plus 4% = 6% Operating Costs CPI at 2%) Year 6 Year 10 +£3,500,000 Scenario 4 ( (Rent CPI at 2% plus 3% = 5% Operating Costs CPI at 2% plus 1% = 3%) Year 8 Year 13 +£2,100,000
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Table 10 illustrates that in all the modelled scenarios the project will breakeven significantly within the 60-year borrowing period meaning the project is viable overall. However, it again highlights a need for rent increases to be higher than the CPI rate in the coming period to protect the financial health of the HRA. 4.35 Notwithstanding the positive long-term benefit to the HRA the Council’s home building programme also has a short to medium term negative impact on rent levels with the examples above in Table 7 and Table 9 highlighting this. 4.36 As part of the Housing Capital Investment Programme approved by Council in March 2025 it was assumed there would be a £42.5m allocation in uncommitted new build projects up until 2030/31, of which £7m has been allocated against new approved projects included in the Table 8 of this report leaving £35.5m budget provision exclusive of affordable housing supply programme grant funding. A number of future sites are identified in the West Dunbartonshire Strategic Housing Investment Plan which was approved by the Housing and Communities Committee in November 2025, these include the following future development opportunities. These future development opportunities will be subject to a robust financial and viability assessment prior to any formal approval. It should also be noted that other future development opportunities could be identified through the Local Development Plan for the delivery of social housing and the sites identified below are therefore not exhaustive: More Homes Option Analysis 4.37 While the delivery of new homes is a high-confidence strategy for strengthening the long-term health of the HRA and is the main route to tackle our housing and homelessness emergency, it adds to HRA costs until such time as the project returns an in-year surplus. To assess the optimum short term delivery model for the development of new Council Homes the following options have been assessed: Option 1 – 45 homes a year - Current Delivery Model = 45 new homes per year (180 new homes) for the 4 years 2028/29-2031/32 (The additional cost of borrowing is £292k in year 1, £584k in year 2, £876k in Year 3 and £1.168m from Year 4-Year 60) Option 2 – 25 homes a year - Revised Delivery Model = 25 new homes per year (100 homes) for the 4 years 2028/29-2031/32 (The additional cost of borrowing is £163k in year 1, £325k in year 2, £488k in Year 3 and £650k from Year 4-Year 60) Artizan Centre, Dumbarton North Mountblow, Clydebank Gray Street, Alexandria Queens Quay Site C, Clydebank Edinbarnet, Faifley Skypoint, Faifley Central Radnor Park, Clydebank Sheltered Housing Regeneration, Various
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Option 3 – No investment in new homes over the four-year period 2028/29- 2031/32. (while no additional borrowing costs will be required it will lead to reduced projected income to the HRA and increased expenditure to the Council’s General Fund through higher homelessness and lower council tax income than would otherwise be the case). 4.38 West Dunbartonshire continues to be in midst of a housing emergency with 5,688 households on the Council waiting list as of 30 September 2025. Furthermore, there are 424 homeless households and 257 children experiencing homelessness. In the last quarter of 2025 over 90 households required to be placed in bed and breakfast accommodation. This emphasises that the need for more Council housing is acute, and therefore the risks associated with Option 3, with no further investment in new homes, will increase homelessness and not contribute to the longer-term financial health of the HRA. On that basis the officer recommendation is not to progress Option 3. 4.39 Research undertaken by Policy Scotland/Cyrenians estimates the cost of an incidence of homelessness to a local authority at £23k. It would also mean the Council would lose over a 4-year period £32m of available grant funding. 4.40 The delivery of these new homes within Option 1 and Option 2 in as yet unknown development sites, has been modelled in Tables 11 and 13 below and demonstrates consistent outcomes as the current development appraisals modelled above for Bonhill and the Committed More Homes Programme. Option 1 – (45 homes a year) Rental Income – The proposal is projected to generate £351k of rental income in year 1. For future years it has been assumed rent will increase by 3% per annum (general assumption of 2% CPI plus 1%). Capital Costs and Loan Charges – Option 1 would have a development capital cost of £46.8m (£260k per home) of which £21.6m (£120k per home) is projected to be funded through Scottish Government Affordable Housing Supply Grant. This therefore requires net borrowing of £25.2m. Based on borrowing £25.2m over 60 years, and assuming a loan interest rate of 4.25%, the Council would repay £68.33m over the life of the loan, including repayment of the principal and the interest. This equates to £1.17m per annum. Operating Costs – Operating costs are assumed to be £2,750 per unit for the 45 homes in year 1 this would be £123,750. For future years it has been assumed and illustrated within Table 11 operating costs will increase by 2% per annum (general assumption of 2% CPI). Operating costs includes all management and maintenance costs including staff, responsive repair and maintenance costs and includes provision for void period and bad debt provision.
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Replacement Costs – Assumption there will be no replacement costs in years 1-15 then fixed costs of £1,500 per unit per annum so a total of £318k per annum. Number of Tenants – 10,500 Table 11 – Option 1 – 45 new homes a year Year Rent Revenue (£) Operating Costs (£) Capital Replacement (£) Net Revenue (£) Loan Repayme nt (£) Surplus/ Deficit (£) Cumulative Surplus (£) Per Tenant Impact (£) 1 351,000 123,750 0 227,250 292,000 -64,750 -64,750 -6.17 2 722,060 252,225 0 469,835 584,000 -114,165 -178,915 -17.04 3 1,114,904 388,000 0 726,904 876,000 -149,096 -328,011 -31.24 4 1,468,453 527,000 0 941,453 1,168,000 -226,547 -554,558 -52.82 5 1,512,506 537,540 0 974,966 1,168,000 -193,034 -747,592 -71.20 10 1,753,408 593,488 0 1,159,920 1,168,000 -8,080 -1,169,922 -111.42 11 1,806,010 605,358 0 1,200,652 1,168,000 32,652 -1,137,270 -108.31 15 2,032,680 655,258 0 1,377,422 1,168,000 209,422 -571,875 -54.46 20 2,356,433 723,457 270,000 1,362,976 1,168,000 194,976 -124,536 -11.86 21 2,427,126 737,926 270,000 1,419,200 1,168,000 251,200 126,664 76.68 25 2,731,752 798,755 270,000 1,663,997 1,168,000 495,997 1,732,209 165.00 30 3,166,848 877,789 270,000 2,036,059 1,168,000 868,059 5,295,797 504.36 4.41 Table 11 shows, over the 60-year borrowing life, the cost and benefit to the HRA. Option 1 based on this modelling, achieves: Cash-flow positive from Year 11 Cumulative Surplus achieved at Year 21 A 30-year surplus of £5.3m to support and strengthen the wider HRA. This evidences that the site is financially viable over its life. Furthermore, the projected 46% grant ratio and £260k per unit cost maintain the project within the affordability thresholds. The 180 new homes will also generate additional council tax revenue. 4.42 The financial assessment modelled in Table 11 has been scenario tested looking at the same sensitivity scenarios highlighted in 4.33 of this report but have been stress tested further through the introduction of scenarios 5 and 6 - o Scenario 5 – Borrowing rate increased to 5% o Scenario 6 – Borrowing rate increased to 10%
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Table 12 Option 1 Sensitivity Testing Scenario First Positive Annual Surplus Cummulative Surplus Achieved Year 30 Surplus/Deficit (£) Baseline case (Rent CPI at 2% plus 1% = 3% Operating Costs CPI at 2%) Year 11 Year 21 +£868k Scenario 1 (Rent CPI at 2% plus 2% = 4% Operating Costs CPI at 2%) Year 10 Year 20 +£1,650,000 Scenario 2 (Rent CPI at 2% plus 3% = 5% Operating Costs CPI at 2%) Year 9 Year 19 +£2,300,000 Scenario 3 (Rent CPI at 2% plus 4% = 6% Operating Costs CPI at 2%) Year 8 Year 17 +£3,200,000 Scenario 4 ( (Rent CPI at 2% plus 3% = 5% Operating Costs CPI at 2% plus 1% = 3%) Year 10 Year 20 +£1,950,000 Scenario 5 (as with baseline), but with 5% capital borrowing rate Year 13 Year 27 +£756k Scenario 6 (as with baseline), but with 10% capital borrowing rate Year 35 Year 57 -£444k 4.43 Option 2 (25 homes a year) Rental Income – The site is projected to generate £195k of rental income in year 1. For future years it has been assumed rent will increase by 3% per annum (general assumption of 2% CPI plus 1%) Capital Costs and Loan Charges – Option 2 would have a development capital cost of £26m (£260k per home) of which £12m (£120k per home) is projected to be funded through Scottish Government Affordable Housing Supply Grant. This therefore requires net borrowing of £14m. Based on borrowing £14m over 60 years, and assuming a loan interest rate of 4.25%, the Council would repay £38.03m over the life of the loan, including repayment of the principal and the interest. This equates to £650k per annum. Operating Costs – Operating costs are assumed to be £2,750 per unit (£68,750 in year 1). For future years it has been assumed and illustrated in Table 13 operating costs will increase by 2% per annum (general assumption of 2% CPI). Operating costs includes all management and maintenance costs including staff, responsive repair and maintenance costs and includes provision for void period and bad debt provision. Replacement Costs – Assumption there will be no replacement costs in years 1-15 then fixed costs of £1,500 per unit per annum so a total of £150k per annum. Number of Tenants – 10,500
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Table 13 – Option 2 - 25 homes per year Year Rent Revenue (£) Operating Costs (£) Capital Replacement (£) Net Revenue (£) Loan Repayment (£) Surplus/D eficit (£) Cumulative Surplus (£) Per Tenant Impact (£) 1 195,000 68,750 0 126,250 162,500 -36,250 -36,250 -3.45 2 401,700 140,250 0 261,450 325,000 -63,550 -99,800 -9.50 3 619,200 215,625 0 403,575 487,500 -83,925 -183,725 -17.50 4 815,808 293,250 0 522,558 650,000 -127,442 -311,167 -29.63 5 840,282 299,115 0 541,167 650,000 -108,833 -420,000 -40.00 10 974,117 330,247 0 643,870 650,000 -6,130 -662,731 -63.12 11 1,003,340 336,852 0 666,488 650,000 16,488 -646,243 -61.55 15 1,129,267 364,619 0 764,648 650,000 114,648 -338,856 -32.27 19 1,270,999 394,675 150,000 726,324 650,000 76,324 19,436 1.85 20 1,309,129 402,568 150,000 756,561 650,000 106,561 125,997 12.00 21 1,348,403 410,620 150,000 787,783 650,000 137,783 263,780 25.12 25 1,517,639 444,468 150,000 923,171 650,000 273,171 1,147,969 109.33 30 1,759,360 490,728 150,000 1,118,632 650,000 468,632 3,087,753 294.07 4.44 Table 13 shows again, over the 60-year borrowing life, the cost and benefit to the HRA. Option 2 based on this modelling, achieves: Cash-flow positive from Year 11 Cumulative Surplus achieved from Year 19 A 30-year surplus of £3m to support and strengthen the wider HRA. This evidences that the site is financially viable over its life. Furthermore, the projected 46% grant ratio and £260k per unit cost maintain the project within the affordability thresholds. The 100 new homes will also generate additional council tax revenue per annum. 4.45 The financial assessment modelled in Table 12 has been scenario tested looking at the same sensitivity scenarios highlighted in the previous modelling example and this is shown at Table 14: Table 14 – Option 2 – Sensitivity Analysis Scenario First Positive Annual Surplus Cummulative Surplus Achieved Year 30 Surplus/Deficit (£) Baseline case (Rent CPI at 2% plus 1% = 3% Operating Costs CPI at 2%) Year 11 Year 19 +£468k Scenario 1 (Rent CPI at 2% plus 2% = 4% Operating Costs CPI at 2%) Year 10 Year 18 +£1,050,000 Scenario 2 (Rent CPI at 2% plus 3% = 5% Operating Costs CPI at 2%) Year 10 Year 18 +£1,500,000 Scenario 3 (Rent CPI at 2% plus 4% = 6% Operating Costs CPI at 2%) Year 9 Year 17 +£2,200,000 Scenario 4 (Rent CPI at 2% plus 3% = 5% Operating Costs CPI at 2% plus 1% = 3%) Year 10 Year 18 +£1,250,000 Scenario 5 (as with baseline), but with 5% capital borrowing rate Year 14 Year 27 +357k Scenario 6 (as with baseline), but with 10% capital borrowing rate Year 41 Not within 60 years -£552k
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4.46 A further detailed comparison of Option 1 and 2 is outlined in Table 15 below. Option 1, in terms of a projected 80% higher borrowing requirement to deliver the 45 homes a year places added risk to the shorter-term health of the Housing Revenue Account with the required additional annual capital spend. 4.47 Option 2 balances tackling ongoing housing and homelessness pressures in the midst of a housing emergency with maintaining shorter term financial sustainability of the HRA and the need to avoid overstretching borrowing capacity. It may be more prudent at this time to plan forward with Option 2 and review that on an ongoing basis to see if additional financial capacity could deliver much needed more homes without adding financial risk to the HRA the financial capacity will be investigated through the planned HRA Business Plan refresh exercise. It is therefore the officer recommendation to plan ahead with Option 2. Table 15 Option 1 and 2 comparison Metric Option 1 45 homes/year programme (180 homes) Option 2 25 homes/year programme (100 homes) Difference (45 vs 25) Notes / Reason for Difference Total homes 180 100 +80 homes Scale difference Total Borrowing Requirement £25.2m £14m +£11.2m 80% additional borrowing requirement with Option 1 proportional to number of homes. Cumulative Surplus Achieved 21 years 19 years +2 years Option 1 longer as larger programme includes higher absolute borrowing. First Positive Annual Surplus Year 11 (£33k) Year 11 (£16k) +£17k Both achieve first positive annual surplus in Year 11 positively impacting on the financial health of the HRA Year 1 Surplus/Deficit -£64,750 -£36,250 -£28,500 Only 45/25 of the 180/100 delivered. Proportional to number of new homes. Year 2 Surplus/Deficit -£114,165 -£63,550 -£50,615 Only 90/50 of the 180/100 delivered. Proportional to number of new homes Year 3 Surplus/Deficit -£149,096 -£83,925 -£65,171 Only 135/75 of the 180/100 delivered. Proportional to number of new homes Year 4 Surplus/Deficit -£226,547 -£127,442 -£99,105 Full capacity reached; Annual deficits increase to highest point in the modelling. Year 5 Surplus/Deficit -£193,034 -£108,833 -£84,201 Deficits begin to lessen from this point in both scenarios. Year 10 Cumulative Surplus -£1,169m -£662,731 -£507,191 Both negative at Year 10; larger programme has bigger absolute deficit Year 20 Cumulative Surplus -£124,536 +£125,997 -£250,533 Option 2 has a positive cumulative surplus at this point, it is a further year before Option 1 (Year 21)achieves this. Year 30 Cumulative Surplus £5.3m £3.1m +£2.2m Larger scale eventually produces higher surplus despite higher borrowing costs 4.48 The Scottish Government have committed to providing additional resource to the delivery of new housing. It is recommended that, in addition to existing new build plans will deliver 212 homes, the Council commits to the delivery of an additional 25 new homes a year from 2028/29 to 2031/2032 (Option 2, 100 additional homes). This resource can be met within the existing housing
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capital investment programme from the future new build and regeneration budget line. 4.49 The additional resource committed by the Scottish Government is up to £4.9bn investment over the next four years for the delivery of new homes, an increase of around 20% on the current affordable housing supply programme budget, the additional funding will see an increased Resource Planning Allocation (RPA) allocation for all Scottish local authorities and the introduction of multiyear funding allocations to strengthen the delivery of strategic housing investment plans. Once the Scottish Government makes formal announcements on this aspect of the Action Plan, such as the increased funding and how this will be distributed to local authorities, the Council will review the programme with a focus on maximising investment opportunities and ensuring the delivery of affordable housing continues to meet the needs of West Dunbartonshire’s communities. 4.50 As indicated previously he Council’s More Homes West Dunbartonshire approach has evidenced strong support from council tenants. The transfer led approach to the allocation of new build housing has also strengthened support for the new build programme with tenants, as this approach prioritises existing council tenants with a housing need on the allocation of the new homes, and fosters additional lets required to support the wider housing access system. 4.51 An example of this has seen the three most recently completed new home developments (Clydebank East/Mount Pleasant/Pappert) significantly contributing to meeting wider housing need within West Dunbartonshire communities and combined have contributed to lifting 124 children out of homelessness and into a secure tenancy. 4.52 The plans and actions highlighted within this report, including the partnership approach with tenant representatives, has laid the foundations for the annual rent consultation exercise which completed in January 2026 and will inform the Rent Setting and Capital Investment report to West Dunbartonshire Council in March 2026. 5. People Implications 5.1 The delivery of the Housing Capital Investment Programme is managed through existing resources. 6. Financial and Procurement Implications Financial 6.1 Housing and Finance officers will continue to assess the ongoing affordability of future investment and spending plans within the context of the Housing Revenue Account Business Plan. Current plans are assessed as being within the affordability thresholds. 6.2 The viability assessments of new home development opportunities factor in assumed grant benchmark levels, if any assessment highlights viability concerns housing officers will initially engage with the Scottish Government More Homes Team to assess additional grant funding requirements to
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ensure project viability. West Dunbartonshire Council has a long-standing positive relationship with the Scottish Government team in this regard and have successfully worked collaboratively to ensure above benchmark grant levels on a number of new home projects. Procurement 6.3 All new development sites will be subject to new detailed procurement strategies and the opportunities highlighted within the report will continue to be prioritised. 6.4 All procurement activity conducted by the Council, more than £2m is subject to a contract strategy. The contract strategy for new housing development within the HRA capital programme will be developed by the Corporate Procurement Unit in consultation with housing development officers. The contract strategy will include but is not limited to; contract scope, service forward plan, the market, procurement model, and routes – including existing delivery vehicles, roles and responsibilities, risks, issues and opportunities and on-going contract management. Opportunities to maximise the positive social, economic, and environmental impact for the Council through the relevant procurement processes will be developed in line with procurement policy. 7. Risk Analysis 7.1 Interest rate increases are the key risk to HRA finances with regards all investment programmes. If interest rates rise there will be a proportionate increased impact on rent levels without action to reduce other costs. The interest rate assumptions for outstanding capital debt are based on advice received from the Council’s external treasury advisors. Borrowing rates are influenced by a range of macro-economic factors and there is a high likelihood that the interest rate charged on outstanding council debt will be different from the figure used in financial planning. The current risk approach is to tolerate this financial risk given the scope to revise future HRA revenue and HRA capital plans to reduce cost and minimise the impact on future rent levels which is highlighted within this report. 7.2 The risk from higher interest rates is further mitigated by having more fixed/long term borrowings as opposed to shorter term borrowing. HRA total capital debt is expected to be circa £414m in 2027. If the pooled interest rate was 2% higher on March 27 (6.25% as opposed to 4.25%) then the HRA debt servicing costs would be around £8m higher, placing upward pressure on rents to meet the increased costs. However, this scenario is unlikely. 7.3 The other financial risks to the ongoing challenging financial position of the HRA are included within this report. This includes that without the proposed remedial actions in terms of spending and investment commitments that impact on borrowing levels, rent increases will be required in future years which could risk the affordability of council housing. . 7.4 A further risk identified is if spending decisions are not aligned to service and tenant priorities there is a risk of heightened regulatory engagement and decreasing levels of tenant satisfaction which are currently at a record high
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level, however this will be mitigated through the approved processes including the HRA VFM Group and the Joint Rent Group. This risk is compounded if planned investment is not delivered in terms of current and future Council homes the Council will fail to meet identified housing need, which will lead to increased homelessness, time in temporary accommodation, and will result in increased pressure to other Council and HSCP budgets. 7.5 West Dunbartonshire continues to be in midst of a local and national housing emergency with the second highest homelessness rate in Scotland the need to maintain and increase housing supply is acute, if this strategic aim was compromised an exponential risk would be placed on the Council’s ability to meet its statutory requirements without detrimentally impacting on the wider financial health of the Council. 8 Environmental Sustainability 8.1 Our current and future approach to strategic housing asset management will continue to prioritise a ‘zero carbon’ approach to decision making and deliverability and this will be done the aims of the Housing Asset Management Strategy and the Council’s Climate Change Strategy. 9. Equalities Impact Assessment (EIA) 9.1 The proposal does not alter any existing policy or pattern of service delivery and so is not considered to require an equalities impact assessment. 10. Consultation 10.1 Consultation has taken place with all housing services with a collective responsibility in delivering services to council tenants and finance and legal, the paper also supports the ongoing consultation and involvement in the implementation of actions with tenant representatives. 11. Strategic Assessment 11.1 The Local Housing Strategy is the overarching document setting out the strategic direction for housing across all tenures and informs the future investment in housing and related services across West Dunbartonshire. 11.2 Having considered all the Council’s strategic priorities, this report, and the provision of new supply social housing for rent contributes to all the council’s strategic priorities. Peter Barry Chief Officer, Housing Date: 11th February 2026 Person to Contact: John Kerr – Housing Development and Homelessness Manager, Housing Development and Homelessness Team, Housing and Employability, telephone: 07793717981, email: john.kerr@west-dunbarton.gov.uk
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Appendices: None Background Papers: Strategic Housing Investment Plan 2026-2031 60 new build viability assessment tables Wards Affected: All