Key Points
- Edinburgh Council forecasts an almost £60m underspend on housing budgets for the current year, including £14.3m for building new council housing and £45m for buying existing housing.
- An additional £11m saved from the homelessness services budget, with £10.7m specifically from temporary accommodation.
- SNP councillor Kate Campbell, who convened Thursday’s risk management and best value committee, described the figures as showing a ‘complete lack of focus’ by the Labour administration on the housing crisis.
- Labour councillor and finance convener Mandy Watt insisted tackling the housing emergency is an ‘absolute priority’ and funds would be carried over for housing next year.
- Council executives, including director of place Gareth Barwell and finance director Richard Lloyd-Bithell, defended the underspends as resulting from programme slippages, market pressures, and efforts to secure value for money.
- The underspend occurs amid a tenth-month council house allocations freeze to prioritise temporary housing, alongside strained temporary accommodation supply after ceasing use of unlicensed HMOs and B&Bs.
- Barwell acknowledged challenges like ‘failure to accommodate’ cases and visible rough sleeping outside council headquarters, but stressed staff are working flat out.
- Draft budget proposals include significant housing spend, with expectations of worsening demand by 750 extra people needing temporary accommodation annually.
Edinburgh (Edinburgh Daily News) January 26, 2026 – Edinburgh Council is poised to leave nearly £60 million unspent on housing initiatives this year, prompting sharp criticism from opposition figures who have branded the shortfall “scandalous” amid a deepening citywide housing crisis.
The forecast underspend, detailed in a report to Thursday’s risk management and best value committee convened by SNP councillor Kate Campbell, encompasses £14.3m earmarked for new council house construction and over £45m allocated for purchasing existing properties – more than half the year’s buying budget. An extra £11m has been saved from homelessness services, including £10.7m on temporary accommodation, as reported by Local Democracy Reporter Joe Sullivan.
Councillor Campbell lambasted the Labour-led administration for what she termed a “complete lack of focus” on Edinburgh’s number one issue, while finance convener Councillor Mandy Watt countered that housing remains an absolute priority, with unspent funds ringfenced for next year to deliver taxpayer value.
What Sparked the Backlash Against the Council?
As reported by Local Democracy Reporter Joe Sullivan of the Local Democracy Reporting Service, SNP councillor Kate Campbell told the service:
“During a housing emergency, to fail to spend £60m allocated for homes shows a complete lack of focus on the number one issue facing the city.”
Cllr Campbell, speaking after the committee meeting, also raised doubts over the administration’s ability to utilise new Holyrood funding effectively. She added:
“Given these revelations about massive underspends and failures to take basic steps, what confidence can the people of Edinburgh have that it will be used effectively by this Labour administration?”
In response, Cllr Mandy Watt told the Local Democracy Reporting Service that the council was “duty bound” to provide good value to taxpayers, emphasising that these funds would be deployed on housing in the next financial year.
Top council bosses reinforced this stance during the Thursday meeting, with executives stating that city staff are “flat out” addressing the crisis, which they described as an “absolute priority”.
Why Did Temporary Accommodation Budgets See Savings?
Cllr Campbell directly challenged council director of place Gareth Barwell on the £10.7m temporary accommodation underspend, querying whether it truly represented value for money or stemmed from surging “failures to accommodate”.
As detailed in Joe Sullivan’s report for the Local Democracy Reporting Service, Mr Barwell responded:
“I’d have to politely disagree. I don’t think it’s being made from people rough sleeping. I think the supply of temporary accommodation regrettably is what’s led to us not being able to accommodate on occasion.”
He explained that savings partly arose from phasing out unlicensed Houses in Multiple Occupation (HMOs) and bed & breakfast spaces, a policy shift after these were deemed unlawful in late 2024, despite their pandemic-era use to meet demand.
Mr Barwell did not shy away from the challenges, stating:
“I won’t shy away from the fact we need to find a way to increase the supply of temporary accommodation so we can accommodate everybody that needs it.”
When pressed by Cllr Campbell on actions to fulfil legal obligations, Mr Barwell outlined ongoing efforts including private sector leasing and building purchases to bring more housing online. He candidly remarked:
“Probably the most regrettable part of my job is that I walk into the office and see people sleeping outside of our headquarters.”
What Explains the £45m Underspend on Buying Homes?
Turning to the £45m shortfall in housing purchases, Cllr Campbell sought explanations from finance director Richard Lloyd-Bithell, who attributed it to “slippage in the programme”.
Mr Barwell confirmed similar timing issues affected the £14.3m new-build underspend, stating unequivocally: “That’s correct.” He assured that the funds would be spent in future years, stressing the need to balance timing with value for money.
On assurances for early next-year spending and avoiding repeats, Mr Barwell replied:
“We do have our foot to the floor, and I appreciate the sentiment of what you’re saying here. I am very, very confident that the team are absolutely flat out doing everything they can.”
He committed to investigating the £45m purchase underspend further and circulating details to the committee.
How Does the Housing Allocations Freeze Factor In?
The revelations come as Edinburgh endures its tenth month of a council house allocations freeze, halting waiting list access to repurpose flats for temporary housing amid acute pressures.
The city’s temporary accommodation supply has faced exceptional strain since early last year, exacerbated by the council’s cessation of unlicensed HMOs and B&Bs following their legal invalidation.
‘Failure to accommodate’ denotes instances where the council fails its statutory duty to house those presenting as homeless, a metric Mr Barwell linked not to rough sleeping surges but to supply constraints.
What Budget Plans Address the Crisis?
Finance director Richard Lloyd-Bithell noted that a draft budget, prepared for councillors and due for review on Friday, proposes “as much as we can prudently and sustainably afford” for housing.
He warned of escalating needs, projecting an additional 750 people requiring temporary accommodation annually.
Cllr Watt elaborated in a statement:
“Tackling the housing emergency remains one of our absolute priorities as a Council, which of course goes hand in hand with addressing poverty. Capital budgets being underspent is not unusual and there are many complex factors at play here, not least market pressures and availability of housing.”
She reassured residents:
“We’re also duty bound to provide good value for all taxpayer’s money. I want to reassure residents that these funds will still be used on housing, albeit in the next financial year. The upcoming Council budget will have housing and homelessness at its core, signalling loud and clear that we are committed to meeting our responsibilities.”
Who Are the Key Figures in This Debate?
- SNP Cllr Kate Campbell: Committee convener, outspoken critic highlighting “scandalous” underspends and questioning administration competence.
- Labour Cllr Mandy Watt: Finance convener, defending priorities and value-for-money approach.
- Gareth Barwell: Director of place, detailing operational challenges and staff efforts.
- Richard Lloyd-Bithell: Finance director, addressing slippages and future budgeting.
What Broader Context Surrounds Edinburgh’s Housing Woes?
Edinburgh’s housing emergency declaration underscores a nationwide Scottish crisis, with local pressures intensified by post-pandemic demand, legal shifts on temporary lets, and construction delays.
The committee report, as covered by Joe Sullivan, frames underspends as common in capital projects due to multifaceted factors, yet opposition voices decry them as symptomatic of inertia.
Council assurances pivot on carry-over spending and budget centrings, but Cllr Campbell’s queries resonate with public frustration over visible homelessness and frozen allocations.
