The Scottish government may have become embroiled in a corruption issue with its choice of Chinese infrastructure partners but it seems that plans for 5000 affordable homes are in the pipeline. It is unfortunate that the SNP has seen this move, which has yet to be officially confirmed, overshadowed by corruption accusations targeted at a consortium of Chinese businesses behind the talks.
Investment in housing
It is believed that 5000 affordable homes will be built in the Edinburgh, Falkirk and Ayrshire area costing a total of £500 million. While plans are rumoured to be advanced the SNP has refuted these allegations citing the need to carry out due diligence before any legally binding arrangement can be signed. However, the UK adviser for the Chinese consortium Sir Richard Heygate has confirmed that Nicola Sturgeon, leader of the SNP, specifically chose the affordable housing option as a starting point for any future relationship.
Will this help?
While Scotland is one of the more sparsely populated areas of the UK with the population centred round a number of large towns and cities there is most certainly a need for affordable housing across the country. The likes of Edinburgh have seen a significant rise in property prices over the last decade and affordable housing is near non-existent in some of the more affluent areas. It is a little strange that the SNP has not been championing this arrangement with the Chinese consortium at a time when the housing market is proving difficult for first-time buyers to enter.
Economic benefits
Aside from the fact that first-time buyers will be able to climb aboard the Scottish property ladder in the short to medium term, once these properties are available, there are further economic benefits. The Scottish housebuilding industry, along with others in the UK, has found it challenging since the 2008 economic downturn and the building of 5000 affordable homes at a cost of £500 million will be welcomed. There are also the knock-on economic benefits on the surrounding areas and it will be interesting to see whether this uplifting move leads to a new trend in the Scottish housebuilding sector.
Political infighting
While there may be accusations to answer with regards to the Chinese consortium it is disappointing to see political parties point scoring when there are some significant investment proposals on the table. The UK government has long promised a massive increase in the number of new builds across the country but has yet to deliver. The Scottish government may well have its critics but the building of 5000 new affordable homes will certainly place pressure on Westminster.
It will also be interesting to see the number of Scottish companies brought into the Chinese consortium arrangement as there is obviously a need to ensure that local businesses benefit more than anyone else. Under European Union regulations governments are not able to favour any one group or one party of businesses when such investments are announced. However, in these challenging economic times surely there must be a temptation to favour home-grown businesses?