City leaders 'encouraged' by talks on affordable housing

SENIOR councillors today said they were encouraged after cross-party talks with Housing Minister Stewart Maxwell over Edinburgh's housing cash crisis.

The Capital needs at least 12,000 new affordable homes over the next ten years, but the current funding formula is weighted against the city.

And housing convener Paul Edie has warned without more cash Edinburgh cannot achieve the Scottish Government target of meeting the needs of all homeless people by 2012.

But Cllr Edie said the meeting with Mr Maxwell had been "constructive and useful".

He said: "He was very open to suggestions. I was very impressed with his pragmatism and his understanding of the position Edinburgh is in. I think we can establish a good working relationship.

"We are establishing a dialogue between our officials and the civil servants to see what we can bring forward to alleviate our housing problems."

The Government is due to announce soon how much each council will get in funding for affordable housing in the next financial year.

But Cllr Edie said the overall pot had shrunk, so Edinburgh would be doing well to receive the £36 million it has had for each of the past two years.

At the moment the Capital has 75 per cent of Scotland's overall housing need but gets only 15 per cent of the overall funding for affordable homes.

Cllr Edie said the criteria for splitting the available cash between councils currently put most of the emphasis on deprivation rather than the shortage of housing.

And he said a change in the formula would make an "enormous" difference to Edinburgh's ability to tackle the housing problem.

"It might still take us a little longer than 2012, but there would be light at the end of the tunnel."

But he said he was disappointed Chancellor Alistair Darling had ruled out writing off the Capital's £280m housing debt. It would have been written off if tenants had backed the proposed transfer of the city's housing stock to a housing association, but the ballot in 2005 produced a "No" vote.

And MSPs were told earlier this week the Treasury had turned down a plea from the Scottish Government to wipe the debt.

Cllr Edie said: "We will keep the pressure up. The Treasury is saying never in a million years, but that means never in a million years under this government.

"Governments can change these things. Who is to say that in a few years the Treasury is not going to turn round and say stock transfer was a mistake and we're going to change it?"

Gordon Munro, Labour's housing spokesman on the council, who also attended the meeting with Mr Maxwell, said there had been "encouraging noises" about the grant the city could expect.

But he said: "If the funding remains static at £36m, it means we will only get 500 houses a year instead of the 1000 we need."

Tory group leader Iain Whyte described the discussions with the minister as "fairly positive".