Strategic Housing Fund Annual Report 2024/25
Argyll and Bute Council · 26 June 2025
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ARGYLL AND BUTE COUNCIL COUNCIL DEVELOPMENT AND ECONOMIC GROWTH 26 JUNE 2025 STRATEGIC HOUSING FUND ANNUAL REPORT 2024-25 1.0 EXECUTIVE SUMMARY 1.1 In December 2004, Council decided to exercise its discretion to reduce the discount for council tax for second and long term empty homes across the whole council area from 50% to 10%. In line with Scottish Government guidance, which states that additional income arising from the reduced discount of council tax on second and holiday homes be retained locally by the local authority and used specifically for activity relating to the provision of affordable social housing or for activity in relation to bringing empty homes back into use, the Strategic Housing Fund (SHF) was created to allow for allocations in support of priority projects emerging from the Local Housing Strategy (LHS). 1.2 In 2016 the Scottish Government announced it’s intention to introduce legislation to allow councils to end the Council Tax discount for second homes from April 2017. The Policy and Resources Committee agreed on 27 October 2016 to introduce that no discount would apply across the whole of the Council area from 1 April 2017. This 10% element was not ring-fenced to the SHF, rather it goes into the General Fund. 1.3 The Council also exercised it’s discretion to increase the council tax charge on empty properties, where dwelling has been unoccupied for over 12 months, by 100% across the whole council area with effect from 1 April 2024. This income is not ring-fenced to the SHF. 1.4 This report provides an annual update on the SHF income and expenditure position for 2024-25, the current balance on the SHF as at 31 March 2025 and all future commitments against this balance. 1.5 The closing balance as at 31 March 2025 on the SHF is outlined in the table below: Opening Balance at 1 April 2024 £m Income 2024-25 £m Expenditure 2024-25 £m Closing Balance at 31 March 2025 £m Earmarked Balance in General Fund 8.765 2.560 1.184 10.142
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Useable Capital Receipts Reserve 3.080 0.152 0.00 3.232 TOTAL 11.845 2.712 1.184 13.374 1.6 The Strategic Housing Improvement Plan (SHIP) report that was approved by Council in November 2024 details plans for the delivery of 1,170 affordable houses up to and including 2029-30 which will require a commitment of £14.040m from the SHF. The table below outlines the estimated income and expenditure profile of the earmarked balance within the General Fund over the next five years. It can be seen from the table below that there is an estimated surplus in the SHF over the next four years and Council could give consideration as to how this could be used to support the housing emergency that has been declared. 2025-26 £m 2026-27 £m 2027-28 £m 2028-29 £m 2029-30 £m Opening Balance 10.142 7.772 7.482 7.359 7.748 Estimated Income 2nd Homes 2.560 2.560 2.560 2.560 2.560 Expenditure SHIP Profile 2.208 2.364 2.184 1.656 5.628 Outstanding Commitments 2.251 0.000 0.000 0.000 0.000 Staffing Contribution 0.471 0.485 0.500 0.515 0.530 Estimated Closing Balance 7.772 7.482 7.359 7.748 4.150
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ARGYLL AND BUTE COUNCIL COUNCIL DEVELOPMENT AND ECONOMIC GROWTH 26 JUNE 2025 STRATEGIC HOUSING FUND ANNUAL REPORT 2024-25 2.0 INTRODUCTION 2.1 This report provides an annual update on the SHF income and expenditure position for 2024-25, the current balance on the SHF as at 31 March 2025 and all future commitments against this balance. 3.0 RECOMMENDATIONS 3.1 It is recommended that the Council: (a) Note the report on income and expenditure for 2024-25 and the balance on the SHF as at 31 March 2025. (b) Note the estimated future income for SHF for 2024-25. 4.0 DETAIL 4.1 In December 2004, Council decided to exercise its discretion to reduce the discount for council tax for second and holiday homes across the whole council area from 50% to 10%. Subsequently, on 18 May 2006, the Strategic Policy Committee agreed that this revenue should be used flexibly, depending on local circumstances, for the establishment of: • A Landbanking fund; • An Empty Homes Strategy, and • To promote additional investment in infrastructure capacity, where further development of affordable housing is otherwise constrained. In line with Scottish Government guidance, which states that additional income arising from the reduced discount of council tax on second and holiday homes be retained locally by the local authority and used specifically for activity relating to the provision of affordable social housing or for activity in relation to bringing empty homes back into use, the Strategic Housing Fund (SHF) was created to allow for allocations in support of priority projects emerging from the Local Housing Strategy (LHS). 4.2 In September 2007, a further report went to Council to formally agree the arrangements for the operation of the SHF. The following items of expenditure were deemed appropriate and agreed:
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• Expenditure incurred in relation to assets formally held on the Housing Revenue Account; • Expenditure relating to the acquisition of land for the landbank; • Expenditure related to the purchase of homes under the empty homes initiative; • Payments to enhance infrastructure where this is restricting the development of affordable housing, and • Payments to registered social landlords (RSLs) to partially fund proposed projects to deliver houses in accordance with the local housing strategy. 4.3 The introduction of the Local Government Finance (Unoccupied Properties etc.) (Scotland) Act 2012 provided enabling powers for further regulations to modify council tax discounts. The new legislation defined new categories of unoccupied properties which differed from the previous categories and provided new discretions for charging council tax on these new categories. The new regulations allowed the council to determine that, instead of a reduced discount of a minimum of 10%, no discount, or an increase in council tax of up to 100% may apply. 4.4 In 2016 The Scottish Government announced its intention to introduce legislation to allow councils to end the Council Tax discount for second homes from April 2017 in “A Plan for Scotland: The Government’s Programme for Scotland 2016- 17”. Legislation brought this into effect from 1 April 2017 and the Policy & Resources Committee at its meeting on 27 October 2016 agreed that the Council should exercise its discretion under regulation 4 The Council Tax (Variation for Unoccupied Dwellings) (Scotland) Regulations 2013 to vary the council tax charge on second homes such that no discount applies across the whole of the council area with effect from 1 April 2017. 4.5 The Council also exercised their discretion to increase the council tax charge on empty properties, where the dwelling has been unoccupied for over 12 months, by 100% across the whole council area with effect 1 April 2014 however this additional income is not ring-fenced to the SHF. 4.6 There are currently two elements to the SHF balance: Earmarked Balance in General Fund Reserve Income collected from council tax on second homes which can only be used for investment in affordable, sufficient and suitable housing. The current balance in this reserve represents income from council tax collections from previous financial years. Each year the actual income collected is transferred into this earmarked balance and is, on average, c. £2.5m. Useable Capital Receipts Reserve This relates to the accumulated unspent capital receipts from the sale of council houses prior to the transfer of the housing stock. Any sale of residual HRA property or land is transferred to this reserve when the capital receipts are received.
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4.7 The closing balance as at 31 March 2025 on the SHF is outlined in the table below: Opening Balance at 1 April 2024 £m Income 2024-25 £m Expenditure 2024-25 £m Closing Balance at 31 March 2025 £m Earmarked Balance in General Fund 8.765 2.560 1.184 10.142 Useable Capital Receipts Reserve 3.080 0.152 0.00 3.232 TOTAL 11.845 2.712 1.184 13.374 4.8 Further detail of the income and expenditure for 2024-25 is included as Appendix 1. 4.9 There are a number of outstanding commitments against the SHF. There is usually a delay between grants being approved and the monies being released. Included as Appendix 3 is a list of these outstanding commitments, these funds were not released prior to 31 March 2025. 4.10 The Strategic Housing Improvement Plan (SHIP) report that was approved by Council in November 2024 details plans for the delivery of 1,170 affordable houses which will require a commitment of £14.040m from the SHF. The table below outlines the estimated income and expenditure profile of the earmarked balance within the General Fund over the next five years. It can be seen from the table below that there is an estimated surplus in the SHF over the next five years and Council could give consideration as to how this could be used to support the housing emergency that has been declared. 2025-26 £m 2026-27 £m 2027-28 £m 2028-29 £m 2029-30 £m Opening Balance 10.142 7.772 7.482 7.359 7.748 Estimated Income 2nd Homes 2.560 2.560 2.560 2.560 2.560 Expenditure SHIP Profile 2.208 2.364 2.184 1.656 5.628 Outstanding Commitments 2.251 0.000 0.000 0.000 0.000 Staffing Contribution 0.471 0.485 0.500 0.515 0.530 Estimated Closing Balance 7.772 7.482 7.359 7.748 4.150 Assumptions 1. Opening balance 2025/26 taken from last year’s report 2. SHIP expenditure figures based on current SHIP programme 3. Assuming no existing commitment for 26/27 4. Assumed 3% annual staffing cost increase to 29/30
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4.11 In addition to the above, the council has used reserves to advance loans to RSL’s in line with the approach agreed in August 2013. Details of the loans advanced and balances outstanding at 31 March 2025 are set out below: RSL Scheme Name Amount Committed £m Amount Advances £m Rate of Interest % Repayment Period (Years) Amount o/s 31/03/25 £m FYNE 6000 - Rothesay Court House 1.900 1.900 1.93 9 0.000 ACHA 6005 -Glenshellach 2.305 2.305 4.45 25 1.591 ACHA 6010 - Bonawe 0.123 0.123 4.43 25 0.087 ACHA 6015 - Hood Court 0.603 0.603 4.43 25 0.432 FYNE 6020 - St Cuthberts 0.201 0.201 3.14 25 0.000 WHHA 6025 - Imeraval 0.955 0.955 2.85 25 0.744 The Port Ellen Station 6030- Port Ellen Police Station 0.080 0.080 2.12 10 0.026 Total 6.168 6.168 0.000 0.000 2.879
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5.0 CONCLUSION 5.1 The SHF makes a significant contribution to the new affordable housing development programme in Argyll and Bute. The closing balance on the fund at 31 March 2025 was £10.141m. Based on future commitments and anticipated new income over the next 5 years it is estimated that a balance of £4.149m will remain as at the end of 2029-30. Council could give consideration as to how this could be used to support the housing emergency. 6.0 IMPLICATIONS 6.1 Policy: All Strategic Housing Fund income and expenditure is in line with policies agreed by the Council, and particularly the Local Housing Strategy. 6.2 Financial: SHF will continue to be administered in line with the approved policy. 6.3 Legal: None 6.4 HR: Some of the Council’s Housing Service staff are paid for through the Strategic Housing Fund. 6.5 Customer Service: None 6.6 Risk: None 6.7 Climate Change: use of the Strategic Housing Fund allows us to facilitate development of more new energy efficient housing, and promotes the reuse of empty housing stock. 6.8 Fairer Scotland Duty: None 6.9 Equalities protected characteristics: The activity outlined in the report is consistent with the aims and objectives set out in the Local Housing Strategy which is subject to an EQIA. 6.10 Consumer Duty: None 6.11 Islands Communities: many of the housing projects funded through the Strategic Housing Fund are being delivered on the islands which will provide many benefits such as housing, employment and the continued delivery of essential services to island communities. 6.12 Children’s Rights and Wellbeing: The delivery of more housing options will enable more children to have a safe secure environment. Kirsty Flanagan Executive Director / Section 95 Officer Councillor Jim Lynch – Council Leader
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9 JUNE 2025 APPENDICES Appendix 1: SHF Income and Expenditure 2024/25 Appendix 2: Usable Capital Receipts Appendix 3: Outstanding SHF Commitments
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APPENDIX 1 SHF Opening Balance 2024- 25 8,765,258.00 2024-25 INCOME Income from Council Tax on Second Homes 2,560,088.00 2024-25 EXPENDITURE RSL Scheme £ £ Argyll and Bute Council Tigh a Rugha Contribution £160,000.00 Total Argyll and Bute Council £160,000.00 Argyll Community Housing Association (ACHA) Buy Back Scheme - 1 £180,000.00 Buy Back Scheme - 2 £12,000.00 Buy Back Scheme - 3 £72,000.00 Travelling Persons Site £39,008.00 Total ACHA £303,008.00 Colonsay Community Development Company Scalasaig £100,000.00 Scalasaig (Millar & Brice Bridging) £145.70 Total Colonsay Community Development Company £100,145.70 Fyne Homes Riverside Drive, Baddens Phase 9 £72,000.00 Total Fyne Homes £72,000.00 North West Mull Community Woodland Company Ulva £54,489.32 Total North West Mull Community Woodland Company £54,489.32 The Hebridean Trust Lighthouse Cottages 1 and 4 £24,000.00 Total The Hebridean Trust £24,000.00 Trust Housing Association Acquisition of 30 Forst View £12,000.00 Total Trust Housing Association £12,000.00 725,643.02 Other Spend Other £3551.30 Empty Homes HSCP £5,977.32 Housing OT Post *Invoiced after accruals period £0 ABC Strategic Housing Staff £448,482.56 Total Other Spend £458,011.18 Total Expenditure 1,183,654.20 SHF Closing Balance 2024- 25 10,141,691.80
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APPENDIX 2 Strategic Housing Fund (SHF) 2024-25 Usable Capital Receipts (UCR) £ £ UCR Opening Balance 2024-25 3,079,795 2024-25 INCOME HRA Revenue Interest on UCR Reserve 0 152,163 Disposal Receipts former HRA Property 0 0 152,163 UCR Closing Balance 2024-25 3,231,958
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APPENDIX 3 Outstanding Strategic Housing Fund Commitments RSL Scheme Grant Approved Total Drawn Down as at 31/03/25 Commitment Remaining £ £ £ ABC Council Serviced Tenancies (SHQS) 572,000 57,623 514,377 ABC Furnace Coastal Protection 69,000 57,784 11,216 ABC Site Investigations (6 sites, Coll, Tiree, Islay & Helensburgh) 22,000 22,000 ABC Park House (Women’s Aid Works) 35,279 0 35,279 ABC HNDA 60,000 0 60,000 ABC (Housing Emergency) Rockfield Road, Tobermory 250,000 0 250,000 ACHA (Housing Emergency) Dunallan House 200,000 0 200,000 Dunbritton Housing Association Jeanie Dean’s 144,000 0 144,000 Dunbritton Housing Association Jeanie Dean’s 26,350 0 26,350 NHS (Housing Emergency) Coll – 2 Properties (Refurbishment) 100,000 0 100,000 NHS Housing OT Post 2025/26 *Approx Cost 80,000 0 80,000 North West Mull Community Woodland Company Ulva 80,000 54,489 25,511 WHHA Port Mor, Colonsay 25,000 25,000 WHHA Port Mor, Colonsay 168,989.99 168,989.99 WHHA Port Charlotte, Islay 192,000 192,000 WHHA Imeraval, Islay, Phase 5 240,000 240,000 WHHA Ganavan Access Feasibility Fund 150,000 150,000 Empty Homes 17,500 11,271 6,229 Staff Costs 471,176 471,176 TOTAL 2,903,295 181,167 2,722,128