1. What consideration has the Cabinet Secretary given to using Government borrowing powers for building social housing? OQ61284

Borrowing is considered as part of the budget process to determine overall capital spending as opposed to funding specific projects. Over £1.4 billion has been allocated to develop social housing this term and over £132 million of loans were issued to the sector in 2024-25 to enable delivery of more homes.

I thank the Cabinet Secretary for that response. It strikes me as being strange that you haven't considered using the borrowing powers that you have for purposes such as building social housing. You will be aware that I raised this issue last week with the Cabinet Secretary for Housing, Local Government and Planning.

Now, housing associations currently have to borrow a great deal of money at very high interest rates, and they are therefore finding it difficult to pay that money and interest back. We also know that the Government finds it difficult to achieve its targets of building social homes because of the inflation in house construction. So, something like £150 million would make a substantial difference to their ability to build homes in Wales. It is strange, therefore, that you haven't considered using these powers, considering the fact that, in using money to build social housing, you could pay that money back through inflation in rent. So, given that context and the housing crisis that we are facing, will you consider using your powers to borrow money in order to provide it to housing associations or directly to build social housing in Wales?

Apologies if I wasn't clear in my original answer. I think there might have been something lost in translation there in the sense that the Welsh Government borrows and we always look to borrow the maximum amount, but we look to borrow towards our overall capital projects. So, we don't borrow for specific projects; we borrow to enable us to have a larger capital budget from which to draw on for the whole range of projects and initiatives that we support on the capital side of things. For that reason, for the last financial year, we borrowed the full £150 million. In the end, we only ended up borrowing £125 million due to year-end changes. And it's been the late changes to our capital budget that have enabled us to think differently about our approach to capital in recent years in any case. So, for the most recent years, I've been over-programming the Welsh Government's budget by £100 million because of those late year-end changes. And that did enable us in 2022-23 to borrow the full £150 million and, in 2023-24, £125 million. And that, as I say, was in response to the fact that we get, quite often, large amounts of capital at the end of the financial year, which makes borrowing something that we don't need to do in the end. So, we always plan to borrow the maximum; we don't borrow for specific projects.

But, that said, I absolutely recognise the importance of ensuring that the registered social landlords sector does have access to low-cost loans for development. And that's one of the reasons why we've used borrowing routes to support registered social landlords to deliver more homes. Last year, for example, we issued £62 million of low-cost loans to registered social landlords across Wales. So far, another £16 million is approved to issue in this financial year. And this loan funding across 2023-24 and 2024-25 will deliver 220 additional low-carbon homes for rent in the social sector and bring 22 voids back into use in this term of Government, as well as accelerating the delivery of seven new-build sites, delivering a minimum of 86 social rent homes in the next term of government. So, we always seek to borrow the absolute maximum and spend our capital to the best effect, but then, also, we look to innovative ways to support the sector as well.

The housing crisis is one of the biggest challenges we face as a nation, and every year that passes without drastic action is another year of homes becoming more unaffordable and more unavailable, unfortunately. And whilst I agree that urgent action is needed to rapidly accelerate the construction of social housing and private housing too for those on middle and low incomes, I do not think that leaving more debt to our children is the way we deal with the shortage of housing we have right now. The Welsh Conservatives put our housing plan before the Senedd in February, which covered many bases, such as measures to speed up planning approval and to make the use of more than 100,000 vacant, unoccupied dwellings in Wales, including numerous unused public-owned properties and public-owned land. The Welsh Government should consider a support scheme to enable small and medium-sized enterprises to build social housing, whilst providing public-owned land for this purpose. This is something that has been championed by my esteemed colleague Janet Finch-Saunders, the Member of the Senedd for Aberconwy. In the late 1980s, SMEs were responsible for 40 per cent of all homes built in Britain, but recent figures from 2020 are closer to 10 per cent. So, could the Cabinet Secretary outline what financial support the Welsh Government is offering to small and medium-sized house builders for the purpose of building more social housing? Thank you.

So, this would be a matter for my colleague the Minister for housing. She would have more access to the particular detail that you require. But I think the point that you made about land for housing was very pertinent. In 2023-24, loans of nearly £40 million were awarded to RSLs, and they'll be able then to facilitate the delivery of up to 2,254 homes, of which 82 per cent will be affordable homes. And a total of £89 million has been invested in our land for housing scheme since its inception in 2014-15. That funding is recycled when the loans are repaid, to provide for new loans. To date, £287 million of loans have been made, which facilitate the delivery of up to 8,000 new homes, of which 81 per cent will be affordable. And crucially, to date, interest charged on the loans for affordable housing has been at 0 per cent, with a commercial rate charged for the market housing unit. So, as I say, we are trying to find innovative ways to support the housing sector, and I think I've given a couple of examples of those, which are being led by my colleague the Cabinet Secretary for housing, this afternoon.