THE BELEAGUERED Scottish construction industry was given a shot in the arm yesterday when ministers announced that £100 million is to be made available to build thousands of new homes, writes Steve Bargeton, political editor.

The decision was taken at a special meeting of the Scottish cabinet on tour in Pitlochry.

Mr Salmond pledged that £60 million worth of capital investment earmarked for 2010-11 would be made available this year and next and this would be matched by £40 million from councils.

The move is designed to strengthen the Scottish economy and boost the construction industry suffering from the worldwide credit crunch as well as helping first-time buyers.

“Yes, this is a shot in the arm for the construction market,” said Mr Salmond. “Timing is important and this is when the house building and construction industry needs the benefit.

“These are funds that would have been allotted in two years’ time but are being accelerated into this financial year.

“£100 million is a significant sum, but it is not the answer. Spending it this year will have more impact than spending it in two years’ time.

“This is no magic bullet solution but we have to apply a bigger bang for every buck we can.”

The First Minster told a packed audience in Pitlochry that although Scotland was suffering from the global economic downturn, there were signs of resilience in the Scottish economy. “There are reasons for us to be more optimistic in Scotland. We are bucking the trend,” he said.

However, the government would not sit back and wait for conditions to improve.

In addition to the £100 million for new social housing, the government is bringing forward other measures to strengthen the economy.

There will be new rules to allow housing associations to buy unsold stock where new houses are needed.

Today Mr Salmond is expected to announce the details of Homecoming 2009 which is designed to boost the tourism industry at a time when overseas visitor numbers are falling.

Plans are in place to bulk-buy electricity across the public sector to safeguard public services.

And a financial services summit is planned to bring together the key players—including mortgage lenders—to look at ways of easing the supply of credit to households and businesses.