Case study:
The Scottish Charitable Bond Programme is an innovative model launched by the Scottish Government to contribute to the building of more affordable homes. The programme is managed by Allia C&C and Allia Bond Services (ABS) to ensure delivery is in line with contractual commitments.
The Scottish Government has devolved powers for housing policy and in relation to the social housing sector, its main investment route is via the Affordable Housing Supply Programme, which provides grants to support the delivery of new build affordable homes.
In 2014, the Allia group and the Scottish Government used these powers to design, build and launch the Scottish Charitable Bond Programme. The result is an innovative funding structure designed to enable the Scottish Government to make investments on a ‘zero coupon’ basis to provide unsecured loans to Scottish housing associations, as well as creating a ‘grant fund’ out of which funding is provided to support housing needs.
Allia C&C promotes and manages the delivery of new loans made. This involves ensuring a clear understanding of what the bond offers and generating demand for the funding available. Allia C&C also completes the credit and legal process to ensure the efficient delivery of Scottish Government investment to each housing association.
Meanwhile, ABS provides the ongoing Administration of the Loan issuers’ reporting requirements and covenants. Additionally, ABS supports the distribution of the grant element of the programme delivering donations to Scottish housing associations.
Over the past 10 years, the programme has delivered more than £500m of investment into Scotland’s affordable housing sector. This funding, delivered through a mix of loans and grant funding, has supported 38 housing associations across Scotland and is enabling the delivery of more than 4,500 new affordable homes.
In addition, Allia C&C’s management of the programme has generated a supplementary grant fund, allowing the Scottish Government to reinvest further into local communities. To date, £225,000 has been distributed to 11 social impact organisations, supporting initiatives such as training tour guides with lived experience of homelessness and funding a community food larder.
Cabinet Secretary, Scottish Government
