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On that point, Tom Arthur did some work on town centres, so we can come back to you on that.

Yes. Obviously, there is a focus on the five councils. On the other local authorities that have declared a housing emergency—I think that I have said this at the committee before—one of the key things that we are asking them to do is to say what their housing emergency action plan is. For example, what do they need to do in relation to their own infrastructure?

We expect that, if a council declares a housing emergency, it would ask us for what it requires, and that it would also look at a housing emergency action plan. We continue to work through local teams and through officials who are based in the Government.

Although we will continue to focus on the other local authorities, just now, our key focus is on the five local authorities. The evidence shows that those are the five local authorities that we need to target at this particular time to bring down the use of temporary accommodation. How do we deliver on that for children? One of the key things that we discussed last week at the housing to 2040 board, when we were talking about the budget—alongside acquisition funding—was how we target children in temporary accommodation. What do we need to do on that?

Shelter told us that how we fund housing for families that may have four of five children is key. We may need to buy bigger accommodation. How do we tackle that issue in Edinburgh and Glasgow? There will be individual local discussions about that, as well as discussions on what we can do through the funding that we will make available. We are not on to questions on the budget yet, but those were the kinds of discussions that were held last week. Shelter had its input, as did other organisations such as Homeless Network Scotland. Our key focus is how we deliver on that, and how we deliver actions—which are already happening—in a way that is sustainable this year and beyond?

You and I have had chats about the idea previously.

That money will help them to prepare for prevention duties. I also mentioned the acquisition fund, which is targeted funding. It was agreed with COSLA that 80 per cent of that funding would target the five local authorities—we talked about regional prioritisation. That goes back to the data, which shows that the five local authorities are facing the most pressure. We are focused on how to reduce that pressure. It also ties in to the local authorities that are experiencing systemic failure, which is the City of Edinburgh Council and Glasgow City Council. We are ensuring that they come out of systemic failure as quickly as possible.

I would be happy to come back to the committee or write to the committee—whichever way you want to approach that.

I will bring in Will Tyler-Greig in a wee second on that. We discussed that issue last week with the housing to 2040 strategic board and the cabinet secretary, and we will discuss the matter in the next month or two and come back with further details.

The key objective throughout is to maximise the impact that the programme will have. Each local authority has the planning assumptions that I talked about. Discussions are going on with local authorities on, for example, where the sites are that can be brought forward the quickest. Those discussions go on regularly, but there needs to be a focus on what we can deliver as soon as possible. The work on stalled sites will inform that, and we will try to bring forward any stalled sites that can be delivered as quickly as possible.

There is, obviously, the investment in the affordable housing supply programme and building houses. The balance has to come around voids, acquisitions and empty homes, because we can bring those forward at a much quicker rate, which can reduce the temporary accommodation pressures as soon as we possibly can. Discussions are taking place on that.

We have talked about the £40 million of acquisition funding. Last year, £40 million was already indicated, so the question is what we do with that £40 million this year. Again, that discussion is going on with five local authorities and others.

Another element of the budget is capital funding and financial transactions. I talked about charitable donations, for example, and about mid-market rents. The key questions that are being looked at are where we can maximise opportunities and how we can bring additional funding into Scotland.

The balance will change in relation to different local authorities. The nuanced approach that the convener talked about is really important. We have good input on that through discussions with colleagues on the housing to 2040 strategic board, which we will continue to have. It comes back to some of the really nuanced discussions, for example about Glasgow, where, as I said, larger families—with four, five or six kids—live in temporary accommodation. How can we target that? If we do so through acquisitions, buying a house for a larger family will cost more than buying a house for somebody with two kids.

Another key thing is the capacity to do so, and discussions are taking place about that capacity in Glasgow. In the past, for example, we have worked with developers to see whether they have properties that the local authority can buy and use. We are looking right across the gamut of possible funding opportunities, but the key things are how to maximise the impact, reduce the pressures as soon as possible and not lose out on what we need to do to build homes.

A key focus in how we deliver that, which I have talked about, is voids, acquisitions and empty homes. However, we should not forget the wider work that goes on, and I will ask Will Tyler-Greig to come in and talk a wee bit more about that.

On the acquisition funding, the £80 million in the 2023-24 budget that was mentioned delivered more than 1,500 homes. The £40 million that we have talked about for this year—not the current financial year but the financial year coming—is expected to result in around 500 acquisitions and tackle 600 voids. One key thing that we have done around the affordable housing supply programme, and in particular around voids and acquisitions, is to try to have a bit of flexibility, because previously the focus was on acquisitions.

One key thing that came up in discussion with stakeholders is how we can bring forward voids as quickly as possible. We are talking about that delivering another 1,000 homes into affordable use at a very quick rate. Detailed discussions on how to use the £40 million for the next financial year are already going on. It is about reducing the number of voids and about how many homes we can bring forward at a very quick rate. They are going out to the market, so we need to make sure that voids are turned over as quickly as possible. Those are examples of the things that we are looking at.

There are a number of things to say about the context, and I will come on to the detail. First, on our delivery record, we deliver 47 per cent more homes per head of population than England does and 73 per cent more than Wales does. That is a strong record. As for new-build housing completions, Scotland has the highest level in the UK, at 36 per 10,000 people; the figure is 34 per 10,000 in England, 15 per 10,000 in Wales and 28 per 10,000 in Northern Ireland. However, we need to do more, and there are a couple of things to highlight in that respect.

Obviously, we are very reliant on the budget that we receive from the UK Government with regard to not only capital but financial transactions. Last year, our capital budget was cut by 9 per cent, while the financial transactions budget was cut by 62 per cent. I have talked about what the financial transactions budget can do with regard to charitable donations, mid-market rent and bringing in other opportunities in that respect. That is a really important pattern, and it is important that I highlight that when we talk about what we do with financial transactions and how we maximise these things.

I think that that sets out the context and where we are. This year, we have had an increase in the budget from the UK Government, and we have maximised that. Indeed, even before the budget, there was discussion of this matter, and it was going to be a priority for the First Minister and the Deputy First Minister. I think that we have delivered on that.

However, one of the key issues that we need to move on is sustainable funding. When local authorities set their course—which, normally, is for a five-year period—they do so based on their ambitions, and we have to ensure that we try to deliver on them. The UK Government has been talking about its spending review and looking at multiyear funding in that respect; that review is coming up in March, I think, and the Cabinet Secretary for Finance and Local Government will discuss that in connection with not just housing but other issues. Every party in Parliament wants sustainable funding, and we will be discussing with the UK Government the question of multiyear funding and whether we can go out to local authorities, Homes for Scotland, the Scottish Federation of Housing Associations and so on and say, “Look, here’s an indicative budget for the next three years.”

I want to be in that position, but it all depends on the discussions that we have with the UK Government. The issue has been raised and discussed with others, and the SFHA has made it very clear that it is its number 1 objective. We want to deliver on that, but it very much relies on the spending review and the UK Government’s position on multiyear funding. It will certainly help us when it comes to housing.

I totally appreciate your point about investment. Companies need to know these things. Indeed, our all-tenure approach gives everybody, whether it be the Scottish Federation of Housing Associations, Homes for Scotland or whoever, that kind of confidence. The Scottish Government now wants multiyear funding to allow us to go out, with confidence, to the sector and say, “This is, indicatively, what we need to do.” That, in turn, will help me work out what needs to be done in years 1, 2 and 3. We already have a good record on this, but multiyear funding would really help by giving us confidence as we move forward.

I will bring in Lauren McNamara or Will Tyler-Greig in a wee second, if they want to respond, but the review covers the points that I have talked about, such as the impact of the pressures that have come through.

For example, construction capacity is a real issue. Going back to the main point, the Highland housing challenge is about delivering 30,000 homes in 10 years, but one of the biggest issues that the council has identified is construction capacity. What are the challenges with construction capacity when it comes to delivering that? It is obviously a drag and a barrier in trying to build those houses at pace, and that has to be considered when we think about how we deliver our target. Construction costs are one of the key things here.

I mentioned construction inflation, which was probably at its highest around 18 months ago; it is still at a high rate and has not dropped off. What is the impact of that? How does it impact on, say, benchmarks? If we were benchmarking at £100,000 and construction inflation meant that costs went up by £20,000, we would have to increase our benchmarks. We have done so, and we have tried to be as flexible as possible.

It is about the barriers that we face, but it is also about maximising budgets and bringing in additional investment to deliver on some of our targets. The housing investment task force is focused on delivering affordable homes. We are discussing what we can do through legislation and some of the exemptions that we have talked about in the committee. We are looking at all those kinds of things.

I might bring in Lauren McNamara to say more, but the review is about learning lessons from the past with regard to impacts that we did not expect when the target was set and about looking at what we need to do in the future to provide certainty on our budget and certainty to the market. Looking at the whole housing system, there has been an impact on the residential market, for example, where higher interest rates have led to a drop. We did not expect interest rates to be so high, but Lauren can say more about the broader work on that.

When I met Argyll and Bute Council nine or so months ago, those same points were made to us. I would point out that infrastructure includes transport, education and employment and therefore will involve much broader discussions within Government. When she was minister, Emma Roddick was involved in that broader work, and it is still on-going. Extensive work has also been carried out on how we get people to move into Argyll and Bute and other rural communities. That is all part of broader Government work.

As for flexibilities, there are discussions about the rural housing fund and how it is funded. Every project will be slightly different when it comes to the point of a feasibility study being carried out and how it moves beyond that. We have considered the issue in our discussions with the Communities Housing Trust, for example.

We have tried to be as flexible as possible with the funding that local authorities receive. Within the current affordable housing supply programme, flexibility is already built into how local authorities tackle voids and deal with acquisitions. The affordable housing supply programme was always flexible. For example, we listened when it came to funding for acquisitions, and after receiving feedback from local authorities, we included voids, too. We have talked about the additional £40 million that will be delivered this year and the balance between voids and acquisitions. Homelessness does not exist in just those five local authorities; it exists in other areas, too, but there is flexibility when it comes to tackling homelessness.

The other flexibility relates to mid-market rent and the £100 million commitment that we have talked about. There are opportunities for mid-market rent in different parts of Scotland, and work is already going on around that, which involves engaging with the Wheatley Group and others. It is also about how we maximise flexibility around charitable bonds, which brings us back to Will Tyler-Greig’s point about getting the biggest bang for our buck across Scotland. There is flexibility in that respect.

We have individual discussions with local teams about how they want to use the funding. The increase will give them more flexibility when it comes to the RPAs, but a lot of flexibility is already built into the system. We will listen to local authorities about what they need to do, and seek to maximise opportunities through the increased funding.