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Council steps in to bail out HHP in time of crisis               17/11/09

 

 

A massive financial crisis which threatened the construction of about 100 urgently needed new homes in the Western Isles appears to have been resolved.

 

It follows a number of press statements yesterday over the building of a raft of new homes in the Western Isles.

 

However, the construction programme had already been announced at the beginning of this year and no new government money appears to be available.

 

Hebrides News can reveal that a last minute deal - which could mean more stringent council cut backs to pay for it  - has broken a stalemate which risked losing around £6.5 million of vital housing cash to the isles.

 

The housing money was awarded for a huge building programme by social landlord Hebridean Housing Partnership (HHP).

 

HHP took over the council housing stock three years ago after a tenants ballot and is now responsible for over 2200 homes across the Western Isles. It also took over the remit to build social and council housing.

 

While the council does not operate social housing it does have a legal obligation to house homeless people. Now its plans to build a urgently required homeless hostel could badly disrupted under the deal to bail out HHP.

 

A cut in housing association grant saw the rate of financial help fall from 82% to 65%.

 

HHP based its estimates on the older, more generous, figure and was  unable to find the difference. It even raised the proposed rents on 18 houses to be erected behind Bridge Cottages in Newmarket, Lewis, in a desperate effort to raise cash.

 

It meant that the bulk of a record £6.6 million housing association grant, announced with great celebration in March, would have to be handed back as the body could not commit to a complete funding package.

 

Talks with Scottish housing minister Alex Neil MSP commenced some months ago and on Monday the bones of a deal was trashed out between the Scottish Government and Western Isles Council.

 

Details of the arrangement are being kept secret but it is understood that HHP had wanted the council to give it an £ 1 million interest free loan.

 

Last week the isles’ authority awarded HHP £126,000 if it would start building 30 homes across housing schemes at Bunnavoneader, North Harris as well as in Castlebay and Newmarket.

 

Another 12 flats are planned for Kenneth Street, Stornoway in addition to 42 houses at the Macrae Hostel site behind the Macaulay Road Co-op as well as 11 houses in Coll.

 

HPP plans other future schemes including at the former Gibson Hostel site in Stornoway.

 

HHP is believed to have previously requested around £600,000 from the council to help it out.

 

The Scottish Government has agreed to adopt a more flexible approach in assessing the overall financial package for the housing developments within the islands.

 

Council leader Angus Campbell said yesterday’s meeting with Alex Neil was an “excellent opportunity to discuss the issues which are affecting us in the Western Isles.  

 

“It is high upon our priorities to provide affordable homes for those looking to rent and buy in the Western Isles.

 

"We now have a way forward which will allow us to do that.

 

“We have also had the excellent news that the eight scheme house at Bunavoneadar in  north  Harris has now got the go ahead from the

Scottish Government  and will be starting on site before the turn of the year.

 

He added: "Future housing developments not only provide much needed social housing but also provide local employment benefiting island communities."

 

Housing Minister Alex Neil said: "The Scottish Government is committed to increasing the number of affordable homes in the islands.

 

"I held a productive meeting with councillors from Comhairle Nan Eilean Siar where there was agreement in principle about how to resolve the funding issues being faced in the Western Isles."

 

Hebridean Housing Partnership's Director of Operations, Tony Pendle,  commented: "This is very encouraging news and it will enable HHP to get on with the real task in hand; meeting house needs in the Islands and building high class housing within the Western Isles

 

Western Isles SNP MSP, Alasdair Allan took part in the crunch meeting at the Scottish Government's headquarters in St Andrews House, Edinburgh.

 

He said: "The Western Isles needs houses at an affordable rent. With virtually no private rented sector the role of the local housing association, Hebridean Housing Partnership, is vital.

 

"The Scottish Government has now agreed in principle to overcome some of the previous difficulties which Hebridean Housing had in funding the completion of housing projects which had been agreed as part of the original stock transfer process.

 

"By Christmas this year we should see serious progress with over a

hundred houses going up at various sites around the islands providing much needed places for families to live.

 

"I welcome the fact that the Scottish Government, the Comhairle, and

Hebridean Housing Partnership are working so closely together to achieve this goal."

 

The deal still has to be ratified.