1.1All Scottish Councils Are Required to Supplement Their Local Housing Strategy (LHS)

1.1All Scottish councils are required to supplement their Local Housing Strategy (LHS) with a Strategic Housing Investment Plan (SHIP) which is the key statement of housing development priorities in the local authority area and will guide the allocation of government and other funding. The Argyll and Bute Strategic Housing Investment Plan 2011-2016 details how the Council and its strategic partners will target resources, including the Scottish Government’s Affordable Housing Investment Programme, over the next five years in order to address the priorities and meet the targets set out in the Argyll and Bute Local Housing Strategy 2004-2009 and the subsequent annual updates for 2009/10 and 2010/11.

1.2This is the fourth SHIP for Argyll and Bute and it builds upon the work carried out by the Council and its partners in previous years and in response to the feedback received from the Scottish Government.It also takes full account of the revised guidance issued by the Scottish Government Housing Investment Division in October 2010.

1.3Specifically, this SHIP sets out the national and local context which informs the investment priorities; the approach being taken to ensure successful delivery of the programme locally; the rationale for the investment strategy itself; and outlines potential risks and constraints and how these will be tackled or mitigated.

1.4The revised guidance requires the SHIP to focus primarily on the practical detail and delivery of the programme set out in the investment strategy templates (see annex). For further detailed discussion on current LHS priorities, the strategic policy framework within which the housing investment programme sits, and the development planning process, reference should be made to the LHS 2004-2009 (and subsequent interim action plan updates) and to the detail of previous years’ SHIP documents[1].

1.5The main focus of the SHIP is on affordable housing provision through new build, replacement, rehabilitation or re-modelling. “Affordable housing” in this context refers to accommodation made available at a cost below full market value to meet an identified need and includes:

• Social rented housing
• Subsidised low cost housing for sale (discounted, shared ownership or shared equity)
• Low cost housing without subsidy (entry level housing for sale)
• Private rented accommodation available at lower cost than market rents and mid market rent.

The term “intermediate affordable housing” is used to cover all types of affordable housing which are not social rented.

1.6In summary, the SHIP is an important corporate activity for the Council which:

• Sets out key investment priorities for affordable housing across sub areas and by tenure and type, and demonstrates how these will be delivered;
• Prioritizes investment based on a range of factors, including relative need, land availability and development constraints;
• Identifies resources which will help deliver these priorities;
• Provides a focus for close partnership working across the relevant Council services and between a range of external partners and stakeholders.

1.7At the heart of the SHIP are the standard templates provided by the Scottish Government for each local authority to complete. These are contained in the annex to this document and set out the details of key investment priorities on a site by site basis. The templates include information on the following:

• Summary tables1-3: SHIP programme outcomes in total and by sub area;
• Tables 1(a) – 1(c): LHS Targets and anticipated AHIP subsidy;
• Tables 2(a) – 2(e): Housing units by location, type and tenure;
• Tables 3(a) – 3(e): Status of projects and potential constraints;
• Tables 4(a) – 4(e): Costs and proposedresources; and
• Council House Building programme (Not Applicable in Argyll & Bute).

1.8In accordance with the revised guidance, Sections 2–8 of the SHIP provide a clear rationale and explanation for the information included within the templates and, in addition, the text of the SHIP provides:

• an explanation of how the component sub housing market areas within the LHS and SHIP have been defined;
• an update on LHS outcomes and targets where these have changed;
• a description of how the Local Authority aims to prioritise the projects within the SHIP, particularly in relation to changes in resource availability;
• a description of how the Local Authority plans to overcome any development constraints;
• a description of the Local Authority’s contribution towards assisting the delivery of the LHS outcomes through the SHIP; and
• a description of how key players have been involved in the development of the SHIP and how this will continue.

2.1The following section outlines significant developments in national housing policy and in the local housing market and wider economy, which have directly informed the preparation of this SHIP. Further reference should also be made to the relevant sections of the previous SHIP documents produced in November 2009 and 2008.

2.2National Context

The impact of the global financial crisis and subsequent economic downturn which has been experienced across the UK since 2007/8 continues to be reflected in all localhousing markets. Despite reports that the national economy is moving out of recession, there are conflicting assessments of the stability and buoyancy of the currenthousing market and little clarity on trends in recent house sales and the availability,or lack, of mortgage finance. However, interest rates are being kept at an all time low and money continues to be released into the economy in an attempt to facilitate “quantitative easing”. Nevertheless, households generally remain reluctant to move from existing mortgage deals at this time, and the increasing uncertainty in the job market, including potential redundancies, wage freezes and reduced working hours, continue to restrict demand for housing for sale. It is expected to be some time before the market returns to a more stable position; meantime developers and those in the construction industry continue to face constraints in bringing sites forward for development. This situation has a knock on effect on achieving the SHIP programme and targets set for affordable housing within the area.

2.3Public sector spending, in general, is approaching a critical watershed and the Scottish Government faces a significant reduction in available resources in the immediate future. The latest economic analysis[2]projects that it may take at least 16 years for the Scottish Government’s total budget to return to its 2009/10 levels in real terms. This will have severe implications for both the supply of and demand for affordable housing.

2.4In 2010, the Scottish Government issued the discussion document ‘Housing: Fresh Thinking, New Ideas’which considers the housing policies needed to meet the challenges of the coming years, in particular:

• where the Government’s priorities should lie;
• new ways of generating investment in new affordable housing;
• how to make more flexible use of existing stock;
• how to reduce carbon emissions; and
• how the main players can best contribute to the process.

2.5Argyll and Bute Council and its partners on the Strategic Housing & Communities Forum submitted a formal response to this discussion paper in September 2010[3] and overall it was acknowledged that, for affordable housing providers, meeting the challenges may mean relying less heavily on public funding in the future and exploring new sources of finance, alternative approaches to investment, new products, wider income generation and improved management of existing resources. The Council and its key partners are already working strenuously towards better prioritising and targeting of effort, collaborative delivery of services and making best use of constrained public resources. The SHIP process will continue to contribute toward achieving these aims.

2.6 New council house building

The Scottish Government has recently encouraged councils to review and fully consider the role they themselves might play in building new houses and to set out any proposed projects clearly in their SHIPs. Additional investment allocations were made available directly to councils to support this initiative. However, having transferred the ownership and management of all its housing stock in 2006 to Argyll Community Housing Association, which was established specifically for the purpose, Argyll and Bute Council does not have the structural or resource capacity to undertake the direct role of developer and is therefore not in a position to pursue this option at this time.

2.7National Housing Trust

The Scottish Government and the Scottish Futures Trust launched a new National Housing Trust (NHT) initiative this year with a view to offering local authorities which are interested another tool to allow them to make additional affordable homes available for intermediate (mid market) rent. The Council and its strategic partners have given this option detailed consideration. Senior council officers explored the potential for NHT with Scottish Government and SFT representatives and the option was subsequently appraised formally by the Strategic Housing & Communities Forum and the SHIP Development Group early in 2010. It was unanimously agreed that in the context of this local authority the potential role of this initiative in delivering affordable housing would be minimal at best and could potentially have deleterious effects in the long run. The provision of mid market rental homes, for prescribed periods only, via the NHT option was not considered a priority at this time, nor a practical solution in the longer term, and it was also deemed to be an ineffective use of constrained resources.Nevertheless, the Council will monitor the progress of this initiative at the national level and, should the opportunity present itself in the future, will review its position.

2.8Energy efficiency and environmental standards

The Council is required to meet the duties placed on all public bodies by the Climate Change (Scotland) Act 2009 and is expected to consider energy efficiency and environmental standards in preparing the SHIP, for example,identifying any opportunities that exist to match housing development priorities to wider renewable energy initiatives such as district heating systems. In addition, Scotland's first Energy Efficiency Action Planwas launched in October 2010. This Action Plan includes a headline target to reduce total energy consumption by 12% by 2020.Together with existing commitments, including the target to generate 80% of Scottish electricity consumption levels from renewable energy within the next decade, the energy efficiency target will be key to delivering Scotland's world-leading carbon-reduction target of a 42% cut in CO2 by 2020.By improving household energy efficiency, Scots could save an estimated £2 billion by 2020 from smaller energy bills, while investment in energy efficiency over that period could directly support around 10,000 jobs in Scotland.The Action Plan sets out steps to help achieve the new efficiency target, including:

• Encouraging behaviour change and delivering consistent, accessible advice
• Supporting households to reduce domestic energy bills
• Improving energy efficiency across housing stock
• Creating a single energy and resource efficiency service for Scottish businesses
• Ensuring public sector leads the way with exemplary energy performance and reporting - including, for example, publishing weekly energy consumption in Scottish Government headquarters
• Creating an energy and fuel efficient transport system
• Ensuring training and education systems are equipped to enable as many people as possible to benefit from business and employment opportunities in energy efficiency.

2.9Modernised Planning System

Over the past two years, Scotland’s planning system has undergone substantial reform and planning has been identified in the Scottish Government’s Economic Recovery Plan as one of the key drivers to build economic success. This success is contingent on both the public and private sectors fully playing their part in supporting new investment and unlocking the nation’s economic potential. The modernised planning agenda crucially requires changes in culture, and greater emphasis on facilitating development and in securing sustainable economic growth. Planning’s key role in the delivery of affordable housing was reinforced this year by the publication of Planning Advice Note 2/2010: Affordable Housing and Housing Land Auditswhich replaces PAN 74: Affordable Housing published in 2005 and Annex A Housing Land Audits of Scottish Planning Policy 3: Planning for Homes published in 2008. This PAN provides advice andinformation on how the planning system can support the Government's commitment toincrease the supply of affordable housing and it also sets out advice on good practice in the preparation ofhousing land audits. The significance of both the SHIP and the LHS are emphasised in this PAN, and in taking the SHIP process forward the Council planners and housing strategy officers will take full account of the implications of this advice and guidance, particularly in respect of the application of the Affordable Housing Policy in Argyll and Bute.

2.10As part of the wider package of measures currently being implemented to support modernising the planning system, the Scottish Government also initiated further consultation this year in relation to the planning system with the paper “Resourcing a HighQuality PlanningSystem”. While the modernised planning system, implemented in 2009, has taken someduties away from authorities, for example the requirement for structure plansacross Scotland, it has also brought some additional duties for planningauthorities such as neighbour notification. These, and other issues, havebeen brought into sharp focus in the current economic climate highlighting thecurrent resourcing of the planning system is no longer sustainable. Thepurpose of this consultation is to seek views on how the planningservice could be more effectively resourced and focused on quality ofservice. This includes seeking views on options for amending the feestructure. As with the PAN 2/2010 referred to above, this paper has been flagged for consideration within the Argyll and Bute Strategic Housing & Communities Forum and by partners on the SHIP Development Group and in general, planning and development control issues remain central to the strategic planning process in this authority.

2.11Wider Planning for an Ageing Population – Housing & Communities

The Scottish Government issued a detailed report in 2010 on the housing challenges faced as a result of the ageing population and initiated consultation on a series of proposed outcomes and specific actions to address these challenges. Among other issues, the consultation focused on the following 5 outcomes:

• Clear strategic leadership is in place at both national & local level about the housing outcomes to be delivered for older people;
• Older people are better assisted to remain in, and make use of, existing housing stock;
• Investment in new housing provision across the sectors meets future needs of older people;
• The needs of older people for low level, preventative support are met;
• The infrastructure to support these outcomes is improved.

In principle, Argyll and Bute Council and its strategic partners are supportive of these outcomes and the specific actions proposed to deliver them. There are, however, significant implications for the LHS and the SHIP in terms of the balance and focus of investment priorities between existing stock and new build; and between the provision of “bricks and mortar” solutions and the provision of support services and infrastructure capacity. These issues will be explored further in the development of the LHS and will inform the future updates of the SHIP.

2.12The Equality Act 2010 and Equality & Human Rights Commission Guidance on public sector duties.

Public Authorities, including the Scottish Government and Local Authorities, are currently subject to duties to promote race, disability and gender equality. The expectation is that from April 2011 these three duties will be replaced by a new duty to promote equality on the grounds of gender, race, disability, religion or belief, age, sexual orientation, gender reassignment, pregnancy and maternity. This new duty was introduced by the Equality Act 2010, which streamlines existing equality legislation, replacing familiar laws such as the Sex Discrimination Act 1975 and Race Relations Act 1976.It is the responsibility of Local Authorities to ensure they fulfill their statutory requirements to consider equalities in developing their policies and plans and useful guidance on the public sector equality duties has been issued by the Equality & Human Rights Commission. Argyll and Bute Council has responded with its own harmonized corporate Equalities & Diversity Scheme and, together with its strategic partners, has acknowledged the importance in preparing the SHIPof fully taking into account the housing needs of the communities that it serves and related equalities issues. Data and evidence about the needs of different communities and household groups has been collected as part of the Housing Need and Demand Assessment and this will inform the preparation of the LHS and its Equalities Impact Assessment. Throughout the preparation of the current SHIP, the Council has striven to ensure that the principles of equality and diversity are applied and that the plan is fully compliant with all legal requirements.