A council scheme to deliver affordable housing in Angus could have a potentially devastating impact on employment, it has been claimed.
Businessman Derek Wann believes a proposal by Angus Council to choose the DOMUS consortium in preference to the Angus Housing Association (AHA) posed a threat to Angus consultants, contractors and the association.
Mr Wann, director of FMS Construction in Forfar, said DOMUS was made up of the Dundee firms Servite and Hillcrest housing associations, Perthshire Housing and the Newcastle organisation Home.
“This consortium, in their component parts, barely ever use Angus construction companies or consultancies,” he said. “The gain to Dundee, Perth and Newcastle would be at the expense of Angus. Not only in the possibly reduced number of contracts but also the non-employment of Angus residents on these contracts.
“The overall effect to Angus is likely to be devastating in terms of employment. All funding granted in respect of development in Angus could now be used to engage consultants and construction firms from outwith Angus.
“We occasionally are engaged by Servite, but we are unaware of any others enjoying this benefit. In the past five years, 90% of our work in respect of social housing has emanated from Angus Housing Association.”
Mr Wann said it could also lead to the closure of the development department of Angus Housing Association and a knock-on effect in other departments of the organisation.
Angus Council has said the preferred developer process was an initiative, which the Scottish Government was pursuing across Scotland as a result of perceived inefficiencies in the provision of social housing.
“The government, as does the council, believes that more housing can be provided for the same money by use of the preferred developer route,” he said. “Tendering was carried out through the Scottish Government with assistance from Angus Council. A similar arrangement to this has been used in neighbouring authorities.
“Angus Housing Association bid for the contract but was unsuccessful in the tender and was informed accordingly. The council is keen to use local agents and contractors in the provision of social housing and will be discussing their future involvement in due course.
“Hillcrest and Servite housing associations have provided many houses in Angus over the years and it is hoped that that good relationship can continue in future through the DOMUS arrangement.
“A full report will be submitted to neighbourhood services in due course for members’ consideration.”Programme changesIn a report to councillors earlier this year, the director of neighbourhood services Ron Ashton said the majority of new affordable housing delivered in Scotland since the 1970s has been delivered by registered social landlords (RSLs) with funding from what is now the Scottish Government’s Affordable Housing Investment Programme (AHIP).
The funding regime had remained essentially unchanged for a number of years during which many of the RSLs delivered new developments had evolved into regional or national organisations. He said the programme management and delivery arrangements for new affordable housing are perceived by the Scottish Government as having become increasingly complex and inefficient in recent years.
Concern had also been expressed regarding the relatively small size of many development projects and increased competition for AHIP funding amongst RSLs.
Two years ago, the government published a consultation on proposed reform of the current programme management arrangements and subsequently opted not to progress a regionally-based RSL Lead Developer model.
Instead it was agreed with the Scottish Federation of Housing Associations (SFHA) that the focus should be on a number of key proposals that included improving the efficiency and effectiveness of housing associations’ activities across the board, including procurement; setting a standard for development performance which will in future be a requirement for receipt of government subsidy; the award of three-year budgets to those associations, and groups of associations, that are best placed to make use of it; supporting collaborative groups as a way of bringing local authorities and housing associations together.
The RSL Preferred Developer appointed will deliver new affordable housing in Angus funded via the AHIP funding stream for the period from 2011-12 to 2013-14.
Mr Ashton said that by approving the proposed appointment of an RSL Preferred Developer for Angus, councillors would signal their continued commitment to making best use of resources in delivery of high-quality affordable housing, while also showing support for the national desire to demonstrate best value from pressured public resources.
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