Exclusive:Housing associations should be treated as critical economic infrastructure, say top economists

New research by the David Hume Institute argues that the economic contribution of the sector is significant but remains largely invisible because it is not measured consistently.

According to the report, Scottish Federation of Housing Association (SFHA) members have around £2.27 billion in turnover, £1.8bn in operating expenditure and £579 million in staff costs. It describes housing associations as “anchor institutions” as they are long-term organisations rooted in the communities they serve with the ability to own assets, employ people, procure locally and invest over many years.

Professor Duncan Maclennan, author of the report, said: “Housing associations are routinely described as social landlords. That description is true, but it misses a large part of the story.

“They are economic institutions embedded in the places they serve.

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“They employ, invest, procure, build, regenerate and help people to develop skills and participate in the economy.

“The striking finding is not that this economic value routinely exists, but that we do not yet count enough of it.

“If government looks only at the immediate cost of housing investment, it risks missing the wider economic return - and the cost that good housing can prevent elsewhere.

“Too often associations and their impacts, with some important exceptions in rural Scotland, are missing in the discussions of Scotland’s regional economic partnerships and more local economic development initiatives.

“That has to change.”

The report also argues the sector helps to reduce pressure on public services by preventing homelessness, ill health, financial insecurity, educational disadvantage and social isolation, while supporting people to remain independent.

On top of this housing associations reinvest economic value back into their homes and communities as not-for-profit organisations, which in turn can strengthen local economies.

Richard Meade, chief executive of the SFHA, said: “Housing associations have always been about far more than bricks and mortar.

“This research shows just how much our members contribute to Scotland’s economy, as major employers, as investors of billions, and as anchor institutions rooted in the communities they serve.

“For too long that contribution has gone largely unmeasured, and therefore unrecognised.

“We commissioned this work because the case for investing in housing is an economic one as much as a social one.

“We are calling on government and regional economic bodies to treat social housing as critical economic infrastructure, to recognise housing associations as genuine economic partners, and to measure the full return on housing investment.

“We also accept the challenge the report sets for our own sector, to be more confident in telling our economic story, and to build the evidence that proves it.”

Susan Murray, director of the David Hume Institute, said: “At a time when public finances are under enormous pressure, every pound of public investment has to be understood in terms of the value it creates.

“This report makes a strong case that housing investment should be judged on its full return, not simply its headline cost.

“The message for government is straightforward - housing is part of Scotland’s economic infrastructure.

“The housing association sector is already creating economic value. By investing in it, you get much more bang for your buck.

“Now we need to measure the full impact, recognise it in policy and investment decisions, and make sure Scotland gets the full benefit.”

A spokeswoman for the Scottish Government said: “We recognise the social and economic value housing associations and investment in social housing delivers.

“Housing associations play a vital role in helping to provide safe, warm, affordable rented homes for those who need them.

“We will of course consider the findings of the David Hume report, and in the meantime will continue to work closely with all associations across Scotland as we progress our priorities for the year ahead - which includes our commitment to deliver 110,000 affordable homes by 2032.

“An increased supply of good quality, affordable homes also supports a range of wider economic and social benefits, including improved labour market and educational outcomes.”