Scottish Labour leadership candidate Joe Fagan MSP has called for billions of pounds of Scotland’s long-term investment capital to be put to work building homes and strengthening communities.
Mr Fagan renewed his call for a Scottish Investment Pledge after independent research warned that the Scottish Government could miss its target of 110,000 affordable homes by around 35,000.
Research from the Fraser of Allander Institute suggests around 75,000 homes could be delivered by 2032 under its central modelling, against the Government’s target of 110,000.
Mr Fagan said Scotland should respond by mobilising more long-term investment alongside public funding to get housebuilding moving.
Scotland’s local government pension funds held more than £67 billion in assets at the end of March 2025. The equivalent of just 5 to 10 per cent of those assets would be around £3.4 billion to £6.7 billion of investment capital.
His Scottish Investment Pledge would establish a comply-or-explain approach, challenging funds to set out how they consider commercially sound investment opportunities in Scotland and report on their ambitions for Scottish investment. Pension funds would remain completely independent, and their responsibility to protect members’ pensions would come first.
Under the plan, the Scottish Government would work with councils, housing associations and pension funds to develop a pipeline of commercially sound, investable projects. This would help turn Scotland’s need for new homes into credible long-term investment opportunities that can attract institutional capital.
Candidate for Scottish Labour Leader Joe Fagan MSP said: “Scotland is in a housing emergency and we cannot simply watch another target slip away.
“We need to build more homes, and we need to be much more ambitious about putting Scotland’s own wealth to work in Scotland.
“Our local government pension funds hold more than £67 billion. Even investment equivalent to 5 or 10 per cent of that would represent billions of pounds of long-term capital that could help support homes, infrastructure and good jobs here in Scotland.
“Politicians shouldn’t interfere with investment decisions. But government does have a responsibility to work with councils, housing associations and pension funds to create a pipeline of projects that are commercially sound and ready for investment.
“Protecting pensions comes first, and every investment has to stand up commercially. But we can ramp up council housebuilding if we connect Scotland’s long-term capital with good investment opportunities in the communities that created that wealth.
“The SNP has declared a housing emergency, but independent research now suggests it could fall around 35,000 homes short of its own affordable housing target.
“At the same time, more than 18,000 households and over 10,000 children were living in temporary accommodation at the last count. That is not a housing system that is working.
“Having led one of Scotland’s largest councils, I know that one of the biggest barriers to building is uncertainty. Councils, housing associations and the construction industry need long-term confidence if they are going to invest, build capacity and train the workforce we need.
“My Scottish Investment Pledge is about unlocking that ambition.
“Scotland has the skills. We have the land. We have enormous pools of long-term capital.
“We should use the power and wealth we already have to build homes, create good jobs and put working-class communities back in control of their future.
“These are the kind of bold ideas that can reconnect with working people.”