D O C U M E N T IS T H E P R O P E R T Y O F H E R B R I T A N N I C M A J E S T Y ' S G O V E R N M E N T
CP(71) 78
COPY NO
61
2 J u l y 1971
CABINET
R E F O R M O F H O U S I N G F I N A N C E IN E N G L A N D A N D W A L E S D R A F T WHITE P A P E R
M e m o r a n d u m b y t h e S e c r e t a r y of S t a t e f o r t h e E n v i r o n m e n t
a n d the S e c r e t a r y o f S t a t e f o r W a l e s
1.
A t i t s m e e t i n g o n 3 0 Jxm& t h e H o m e a n d S o c i a l A f f a i r s C o m m i t t e e
i n v i t e d u s t o c i r c u l a t e t o t h e C a b i n e t t h e d r a f t of t h e W h i t e P a p e r p r e p a r e d
b y t h e M i n i s t e r f o r H o u s i n g a n d C o n s t r u c t i o n o n t h e r e f o r m of h o u s i n g
f i n a n c e i n E n g l a n d and W a l e s w h i c h t h e C o m m i t t e e c o n s i d e r e d .
We attach
this draft, with m i n o r drafting a m e n d m e n t s a s s u g g e s t e d b y the C o m m i t t e e .
T h e White P a p e r s e t s out the p o l i c i e s p r e v i o u s l y a g r e e d b y the Cabinet
a n d H o m e A f f a i r s C o m m i t t e e ( C M ( 7 0 ) 3 4 t h C o n c l u s i o n s , M i n u t e 9,
CM(71) 17th C o n c l u s i o n s , Minute 7).
2.
The H o m e and S o c i a l A f f a i r s C o m m i t t e e c o n s i d e r e d the p r o p o s a l s
f o r t h e d e - c o n t r o l of p r i v a t e l y r e n t e d d w e l l i n g s .
The proposals
affecting r e n t s a r e the s a m e throughout G r e a t B r i t a i n .
In England and
W a l e s r e n t s w i l l m o v e f r o m a n a v e r a g e of a b o u t £ l a w e e k t o a n a v e r a g e
of a b o u t £ 3 a w e e k .
The r e n t i n c r e a s e will be p h a s e d o v e r three annual
i n c r e m e n t s . P o o r e r tenants will be protected either by supplementary
b e n e f i t if t h e y a r e not i n full t i m e w o r k or b y r e n t a l l o w a n c e s if t h e y a r e .
In m a n y c a s e s t h e r e n t a l l o w a n c e w i l l c o v e r t h e w h o l e of t h e r e n t i n c r e a s e
a n d i n s o m e c a s e s s o m e o r e v e n a l l of t h e c o n t r o l l e d r e n t a s w e l l .
3.
T h e H o m e S e c r e t a r y i s c i r c u l a t i n g a s e p a r a t e p a p e r on the t i m i n g
o f a n a n n o u n c e m e n t of t h e G o v e r n m e n t s p r o p o s a l s f o r t h e r e f o r m o f
housing finance.
P W
P T
D e p a r t m e n t of t h e E n v i r o n m e n t ,
2 July 1971
SW1
ANNEX DRAFT WHITE PAPER ON THE REFORM OF HOUSING FINANCE
INTRODUCTION
1.
Over t h e l a s t 50 y e a r s t h e h o u s i n g p r o b l e m
has been transformed.
I t has n o t been s o l v e d .
I n 1 9 1 4 t h e r e w e r e some 8 m i l l i o n d w e l l i n g s i n
England and W a l e s .
N i n e - t e n t h s of them w e r e
r e n t e d from p r i v a t e l a n d l o r d s .
Today t h e r e a r e
some 1 7 m i l l i o n d w e l l i n g s .
Over h a l f o f t h e s e
are owner-occupied.
A f i f t h a r e r e n t e d from
private landlords;
more t h a n a q u a r t e r from l o c a l
authorities.
Of t h e s e 17 m i l l i o n d w e l l i n g s 6£
m i l l i o n h a v e b e e n b u i l t s i n c e 1945 and a n o t h e r
li m i l l i o n i m p r o v e d a n d m o d e r n i s e d d u r i n g t h e same
period.
2.
But m i l l i o n s of o u r f e l l o w c i t i z e n s s t i l l
face acute housing problems.
There a r e n e a r l y
2 million slums.
There a r e a n o t h e r 2 m i l l i o n
homes v / i t h o u t s u c h e s s e n t i a l s a s b a t h r o o m s o r
indoor s a n i t a t i o n .
T h e r e a r e many t e n a n t s who
f i n d t h e c o s t o f t h e i r home a h a r d s h i p .
There
a r e s t i l l p e o p l e w i t h no home a t a l l .
3.
"Successive Governments have s o u ^ i t to t a c k l e
t h e h o u s i n g s h o r t a g e , a g g r a v a t e d a s i t was b y two
w o r l d w a r s , i n two w a y s .
They c o n t r o l l e d r e n t s
t o p r e v e n t t h e e x p l o i t a t i o n of t h e s h o r t a g e .
They
s u b s i d i s e d new b u i l d i n g t o o v e r c o m e t h e s h o r t a g e
itself.
As a r e s u l t o f t h e i r e f f o r t s t h e r e i s
no l o n g e r a n a c u t e o v e r a l l s h o r t a g e o f h o u s e s i n
England and Wales.
But the very p o l i c i e s which have
p r o d u c e d t h i s r e s u l t h a v e become a h i n d r a n c e t o
'jhe s o l u t i o n o f t h e p r o b l e m s t h a t r e m a i n .
They
t a k e t o o l i t t l e accounft of t h e n e e d t o k e e p t h e
e x i s t i n g s t o c k o f h o u s e s i n good h e a r t .
They
provide too l i t t l e h e l p for people i n need.
Moreover they a r e f u n d a m e n t a l l y u n f a i r .
They
t a k e f r o m p e o p l e who c a n i l l a f f o r d i t t o g i v e
t o o t h e r s who o f t e n h a v e n o n e e d o f h e l p .
-
1
­
(CQNFJPENTIAL) 4.
In t h e s e changed c i r c u m s t a n c e s the time has
come f o r a r a d i c a l c h a n g e i n h o u s i n g p o l i c y .
Nothing l e s s w i l l c r e a t e the c o n d i t i o n s f o r a f i n a l
a s s a u l t on the s l u m s , the o v e r c r o w d i n g , the
d i l a p i d a t i o n and t h e i n j u s t i c e t h a t s t i l l s c a r the
housing scene.
THE NEED FOR CHANGE
5.
The G o v e r n m e n t ' s h o u s i n g o b j e c t i v e s
i)
ii)
iii)
are:­
a d e c e n t home f o r e v e r y f a m i l y a t
p r i c e w i t h i n t h e i r means;
a f a i r e r c h o i c e b e t w e e n o w n i n g a home
and r e n t i n g one;
f a i r n e s s b e t w e e n one c i t i z e n a n d " a n o t h e r
i n g i v i n g and r e c e i v i n g h e l p t o w a r d s
housing c o s t s .
6 . .. The a c h i e v e m e n t o f t h e s e o b j e c t i v e s i s
i n t h e f o l l o w i n g ways by the p r e s e n t s y s t e m
housing finance.
Public
i)
a
thwarted
of
Sector
E x i s t i n g s u b s i d i e s f o r new b u i l d i n g a r e
indiscriminate.
In 1970/71 Exchequer
h o u s i n g s u b s i d i e s a m o u n t e d to a b o u t £157
million.
In a d d i t i o n , l o c a l a u t h o r i t i e s
p a i d a h o u s i n g s u b s i d y from the r a t e s of
a b o u t £60-£65 m i l l i o n .
90$ of t h e s e
s u b s i d i e s was u s e d to r e d u c e t h e g e n e r a l
l e v e l , of r e n t r e g a r d l e s s of t h e n e e d o f
tenants.
O n l y 10% w a s u s e d t o p a y
r e n t rebates for poorer tenants.
As a
r e s u l t many i n n e e d r e c e i v e d l i t t l e o r
no-help.
M
ii)
The p r e s e n t s y s t e m p r o v i d e s s u b s i d y f o r
h o u s i n g a u t h o r i t i e s w h i c h do n o t n e e d
it.
I t g i v e s too l i t t l e to a u t h o r i t i e s
w i t h the w o r s t p r o b l e m s of slum
c l e a r a n c e and overcrowding.
-2­
iii)
iv)
The "burden of t h e s u b s i d i e s i s u n f a i r l y
distributed.
Many r a t e p a y e r s p a y n o
housing subsidy.
B u t t h o s e who do make
a d i s p r o p o r t i o n a t e l y heavy c o n t r i b u t i o n
t o w a r d s t h e h o u s i n g c o s t s o f some o f t h e i r
fellow ratepayers.
Many t a x p a y e r s who
pay t h e i r s n a r e of E x c h e q u e r h o u s i n g
s u b s i d i e s ( a n d a l l t a x p a y e r s do s o ) , a n d
many r a t e p a y e r s who m e e t t h e c o s t o f r a t e
fund c o n t r i b u t i o n s , a r e p o o r e r and worse
h o u s e d t h a n t h e c o u n c i l t e n a n t s whom t h e y
subsidise.
The p r e s e n t s y s t e m h a s p r o d u c e d a p a t t e r n
of r e n t s which v a r i e s u n f a i r l y b e t w e e n
t h e t e n a n t s o f one a u t h o r i t y a n d a n o t h e r .
I n M a r c h 1970 t h e n a t i o n a l a v e r a g e l o c a l
a u t h o r i t y r e n t b e f o r e r e b a t e was £ 2 . 2 3 a
week.
But i n London f o r e x a m p l e t h a t
a v e r a g e v a r i e d f r o m one b o r o u g h t o a n o t h e r
b y a s much a s f r o m £ 1 . 9 0 t o £ 4 . 4 1 a w e e k .
Such i n d e f e n s i b l e v a r i a t i o n s a r e only
p a r t l y c a u s e d by i n d i s c r i m i n a t e s u b s i d y .
They a l s o a r i s e from t h e h i s t o r i c a c c i d e n t s
w h i c h have d e t e r m i n e d the c o m p o s i t i o n of
each l o c a l a u t h o r i t y ' s housing stock.
An a u t h o r i t y w h i c h b u i l t m o s t o f i t s
h o u s e s when c o s t s w e r e much l o w e r c a n
b a l a n c e i t s Housing Revenue Account by
c h a r g i n g r e n t s f a r below the p r e s e n t v a l u e
of i t s h o u s e s .
But a n a u t h o r i t y which
h a s had to b u i l d most of i t s h o u s e s
r e c e n t l y may be o b l i g e d t o c h a r g e much
h i g h e r r e n t s f o r h o u s e s of s i m i l a r q u a l i t y .
The d i f f e r e n c e i n h i s t o r i c c o s t s w o r k s t o
t h e d i s a d v a n t a g e of t h e a u t h o r i t y w i t h
u n s o l v e d h o u s i n g p r o b l e m s , and of i t s
tenants
c
v)
H o u s i n g s u b s i d i e s from t a x p a y e r s and
r a t e p a y e r s c o s t some £ 2 2 0 m i l l i o n i n
1970/71.
If they c o n t i n u e d , t h e i r annual
c o s t would i n c r e a s e o v e r the n e x t t e n y e a r s
by a t l e a s t £300 m i l l i o n .
T h i s sum w o u l d
n o t p r o d u c e t h e new b u i l d i n g r e q u i r e d n o r
remove the i n j u s t i c e s of the p r e s e n t
system.
But i t would be a s t a g g e r i n g
a d d i t i o n to the n a t i o n ' s t a x b u r d e n .
-3­
P r i v a t e
vi)
Sector
I n t h e p r i v a t e s e c t o r r e n t c o n t r o l was
i n t r o d u c e d to p r o t e c t the t e n a n t .
Most c o n t r o l l e d r e n t s t o d a y b a r e l y c o v e r
t h e c o s t of p r o p e r m a i n t e n a n c e and
insurance.
Tenants are thus being;
s u b s i d i s e d by t h e i r l a n d l o r d s . . ' The; ;
r e n t of p r i v a t e t e n a n t s s u b j e c t t o r e n t .
c o n t r o l h a s n o t moved s i n c e 19:57' a n d
i s t y p i c a l l y 8 5 p a week o u t s i d e L o n d o n
a n d £ 1 . 5 0 a week i n L o n d o n .
Many'
l a n d l o r d s of c o n t r o l l e d t e n a n t s a r e .
p o o r e r t h a n t h e t e n a n t s who e n j o y a
v e r y low r e n t a t t h e l a n d l o r d ' s e x p e n s e .
vii)
I t i s n o t o n l y t h e l a n d l o r d who.
suffers.
I t i s t h e tiousing s t o c k o f
the country.
Rent c o n t r o l has
a c c e l e r a t e d the d e t e r i o r a t i o n of our
older houses.
A l a n d l o r d who o n l y
r e c e i v e s a c o n t r o l l e d r e n t c a n n o t be
expected to maintain, l e t alone
improve h i s h o u s e .
Indeed if the
present system is continued - the
e f f o r t devoted to the removal of
s l u m s w i l l be n e u t r a l i s e d b y t h e
d r i f t i n t o slumdom of c o n t r o l l e d
dwellings.
viii)
Meanwhile, t e n a n t s s u b j e c t to r e n t
r e g u l a t i o n may h a v e t h e i r r e n t ­
increased.
But, o u t s i d e Birmingham^
t h e r e is n o h e l p f o r t h o s e i n n e e d i f
they are i n f u l l - t i m e work. '
7.
The G o v e r n m e n t : h a s a c c o r d i n g l y d e c i d e d t h a t
t h e r e i s a n ' u r g e n t n e e d - f o r a t h o r o u g h r e f o r m o'f
j i o u s i n g f i n a n c e . . lit w i l l i n t r o d u c e t h e a p p r o p r i a t e
l e g i s l a t i o n i n the autumn.
Thi,s W h i t e P a p e r s e t s
o u t t h e proposed reform i n the Context of t h e
Government's other housing p o l i c i e s , e s p e c i a l l y
, t h o s e c o n c e r n e d w i t h t h e e n c o u r a g e m e n t o f H o u s e
Improvement and Home-ownership.
-4­
f CONFIDENTIAL^ HOUSE IMPROVEMENT 8.
Many o f o u r o l d e r h o u s e s a r e f u n d a m e n t a l l y
sounds
They c a n "be g i v e n a new l e a s e of l i f e a t
a f r a c t i o n o f t h e c o s t o f " b u i l d i n g a new h o m e .
When a h o u s e a n d i t s s u r r o u n d i n g s a r e i m p r o v e d
p e o p l e can c o n t i n u e l i v i n g i n the community and
e n v i r o n m e n t to which they a r e a t t a c h e d .
Improvement
can a l s o p l a y a very i m p o r t a n t p a r t i n
r e h a b i l i t a t i o n of u r b a n a r e a s and e n h a n c i n g the
q u a l i t y of t h e u r b a n e n v i r o n m e n t
9.
The H o u s i n g A c t 1 9 6 9 , p r o v i d e d a s o u n d
framework f o r a p o l i c y of m o d e r n i s i n g n o u s e s o t h e r
t h a n t h o s e s u b j e c t to r e n t c o n t r o l . " G r a n t s can
be made f o r i m p r o v i n g b o t h t h e h o u s e a n d i t s
surroundings.
The G o v e r n m e n t i s g i v i n g f r e s h
i m p e t u s to t h i s p o l i c y .
The n u m b e r of i m p r o v e m e n t
g r a n t s h a s i n c r e a s e d s u b s t a n t i a l l y and p r o g r e s s i s
b e i n g made i n e s t a b l i s h i n g g e n e r a l i m p r o v e m e n t
areas.
T h i s p r o g r e s s m u s t be t e s t e d a g a i n s t t h e
c o n t i n u i n g decay of o l d e r h o u s e s .
The G o v e r n m e n t
h a s j u s t embarked on a sample s u r v e y of t h e
c o n d i t i o n of the h o u s i n g s t o c k i n England and W a l e s .
T h i s w i l l make i t p o s s i b l e t o a s s e s s t h e r a t e , a t
whrch h o u s e s a r e becoming u n f i t and to t a k e the
n e c e s s a r y m e a s u r e s i n the l i g h t of t h i s a s s e s s m e n t .
10.
H o u s i n g a s s o c i a t i o n s c a n make a p a r t i c u l a r l y
v a l u a b l e c o n t r i b u t i o n to improvement.
The v o l u n t a r y
h o u s i n g movement i s w e l l e q u i p p e d t o a c q u i r e
d w e l l i n g s and to c o n v e r t and improve them.
In
1970 a b o u t 3 , 8 0 0 d w e l l i n g s w e r e a c q u i r e d b y h o u s i n g
a s s o c i a t i o n s for t h i s purpose.
Certain local
a u t h o r i t i e s , n o t a b l y the G r e a t e r London C o u n c i l ,
have g i v e n s u b s t a n t i a l f i n a n c i a l s u p p o r t to t h i s
valuable a c t i v i t y .
The G o v e r n m e n t u r g e s o t h e r
l o c a l a u t h o r i t i e s to f o l l o w t h e i r example i n thus
a l l e v i a t i n g the h o u s i n g n e e d s of t h e i r a r e a s .
-5­
11.
B u t t h e H o u s i n g Act.., 1 9 6 9 , g a v e i n s u f f i c i e n t
e n c o u r a g e m e n t t o t h e i m p r o v e m e n t , o f t h e many r e n t
c o n t r o l l e d dwellings which lack b a s i c a m e n i t i e s .
I n t h e two y e a r s s i n c e i t was e n a c t e d , l e s s t h a n
4 , 0 0 0 c o n t r o l l e d d w e l l i n g s h a v e b e e n i m p r o v e d up t o
the q u a l i f y i n g s t a n d a r d of r e p a i r and a m e n i t y .
The l a n d l o r d o f a c o n t r o l l e d d w e l l i n g who w i s h e s
to i m p r o v e i t , h a s t o u n d e r g o a d a u n t i n g p r o c e d u r e
b e f o r e o b t a i n i n g the r i g h t to c h a r g e a f a i r r e n t ;
and m u s t t h e n w a i t 4 y e a r s a f t e r the i m p r o v e m e n t s
h a v e b e e n made " b e f o r e t h a t r e n t c a n be o b t a i n e d
in f u l l .
The G o v e r n m e n t p r o p o s e s t o s i m p l i f y t h e
p r o c e d u r e a n d t o a l l o w t h e i n c r e a s e to t h e f a i r
r e n t t o b e p h a s e d more q u i c k l y .
12.
As s o o n a s t h e l a n d l o r d h a s o b t a i n e d a p p r o v a l
f o r any g r a n t c l a i m e d , i m p r o v e m e n t work w i l l be
a b l e t o go a h e a d w i t h o u t f u r t h e r f o r m a l i t y .
If
the t e n a n t d o e s n o t a g r e e , the l a n d l o r d w i l l ' s t i l l
have the r i g h t to a p p l y to the c o u n t y c o u r t f o r
leave to c a r r y out the works.
The t e n a n t w i l l
s t i l l h a v e t h e r i g h t t o o b j e c t to t h e l a n d l o r d ' s
p r o p o s a l s on s u c h g r o u n d s a s d i s t u r b a n c e o r l o s s
of a c c o m m o d a t i o n , o u t n o t - o n c e r e n t a l l o w a n c e s
a r e i n t r o d u c e d ( s e e p a r a g r a p h 4 6 ) - on g r o u n d s o f
financial hardship.
13.
The l a n d l o r d w i l l s t i l l b e a l l o w e d t o c h a r g e ,
a s soon a s the improvement works have been c a r r i e d
o u t , a r e n t i n c r e a s e w h o s e a n n u a l r a t e i s 12i% o f
the amount ( n e t of g r a n t ) s p e n t on the i m p r o v e m e n t s .
B u t c h a r g i n g t h i s i n c r e a s e w i l l no l o n g e r i n t e r f e r e
w i t h t h e l a n d l o r d ' s r i g h t to a p p l y f o r a f a i r r e n t .
When t h e h o u s e h a s b e e n c e r t i f i e d a s up t o t h e
q u a l i f y i n g s t a n d a r d of r e p a i r and a m e n i t y and the
f a i r r e n t has been r e g i s t e r e d , then ( u n l e s s the
f i r s t i n c r e a s e was s m a l l ) the r e m a i n d e r of the r e n t
i n c r e a s e n e e d e d t o b r i n g t h e r e n t up t o t h e f a i r
r e n t w i l l b e c h a r g e a b l e i n two e q u a l a n n u a l
pease i n c r e m e n t s .
The f i r s t / w o u l d g e n e r a l l y come one
y e a r a f t e r t h e 12i% i n c r e a s e a n d t h e s e c o n d one y e a r
later.
If the t e n a n t cannot a f f o r d the i n c r e a s e d
r e n t , he o r she w i l l be a b l e to o b t a i n a r e n t
allowance.
-6­
(CONFIDENTIAL) H U H
r
il Ml f Nil" ITlH'.1LITT'"'"T-"* '''iMtinnmBBTiaganilttHBflMy
-
HOME OWNERSHIP 14.
Home o w n e r s h i p i s t h e m o s t r e w a r d i n g f o r m of
house t e n u r e .
I t s a t i s f i e s a deep and n a t u r a l
d e s i r e on t h e p a r t of t h e h o u s e h o l d e r t o h a v e
i n d e p e n d e n t c o n t r o l of t h e home t h a t s h e l t e r s h i m
and h i s f a m i l y .
I t g i v e s him t h e g r e a t e s t p o s s i b l e
s e c u r i t y a g a i n s t t h e l o s s of h i s home;
and
p a r t i c u l a r l y a g a i n s t p r i c e c h a n g e s t h a t may t h r e a t e n
h i s a b i l i t y t o keep i t .
I f t h e h o u s e h o l d e r buys
h i s h o u s e on m o r t g a g e , h e b u i l d s u p b y s t e a d y s a v i n g
a c a p i t a l a s s e t f o r h i m s e l f and h i s d e p e n d a n t s . I n
t h i s c o u n t r y t h e e x i s t e n c e of a s t r o n g b u i l d i n g
s o c i e t y movement h e l p s h i m t o r e a l i s e t h e s e
advantages.
15.
I t i s s c a r c e l y s u r p r i s i n g , t h e r e f o r e , t h a t home
o w n e r s h i p s h o u l d h a v e g a i n e d s o much g r o u n d i n t h e '
last half-century.
I n 1914 a b o u t a t e n t h of a l l
houses i n England and Wales were o w n e r - o c c u p i e d ;
by
A p r i l , 1951, the p r o p o r t i o n had i n c r e a s e d t o 31$;
now i t i s m o r e t h a n h a l f .
As t h e W h i t e P a p e r o f
1965 ( " T h e H o u s i n g P r o g r a m m e 1965 t o 1 9 7 0 " ;
Command 2 8 3 8 , p a r a g r a p h 15) n o t e d , t h i s t r e n d i s a
s i g n of s o c i a l a d v a n c e .
16.
The G o v e r n m e n t s h a r e s t h i s v i e w .
Home o w n e r s h i p
helps savings.
And e x p e r i e n c e s h o w s t h a t t h e o w n e r ­
occupied house i s v i s i b l y b e t t e r m a i n t a i n e d , and
at l e s s c o s t in r e a l r e s o u r c e s than the r e n t e d one.
17.
Tax r e l i e f on m o r t g a g e i n t e r e s t d e r i v e d
o r i g i n a l l y f r o m t h e f i r s t I n c o m e Tax l e g i s l a t i o n o f
1798.
S i n c e t h e n t h e p r i n c i p l e of h e l p i n g t h i s
s o c i a l l y d e s i r a b l e form of h o u s e t e n u r e h a s b e e n
a f f i r m e d and r e i n f o r c e d , e s p e c i a l l y i n r e c e n t y e a r s ,
by s u c c e s s i v e G o v e r n m e n t s .
I n 1963 t h e o w n e r - '
o c c u p i e r ' s l i a b i l i t y t o S c h e d u l e A Tax was a b o l i s h e d .
I n 1967 t h e p r e v i o u s G o v e r n m e n t b r o u g h t i n t h e O p t i o n
M o r t g a g e Scheme e n a b l i n g m o r t g a g o r s w h o s e t a x
l i a b i l i t i e s were s m a l l t o exchange t h e i r t a x r e l i e f
f o r a more f a v o u r a b l e s u b s i d y .
I n 1 9 6 9 , when i t
a b o l i s h e d t a x r e l i e f on l o a n i n t e r e s t g e n e r a l l y , i t
r e a f f i r m e d i t s s u p p o r t f o r owner o c c u p a t i o n by g i v i n g
a s p e c i f i c e x e m p t i o n t o t h e i n t e r e s t p a i d on l o a n s
f o r t h e a c q u i s i t i o n or improvement of p r o p e r t y .
-7­
18.
The p r e s e n t G o v e r n m e n t h a s t a k e n f u r t h e r
t o e n c o u r a g e home o w n e r s h i p .
(i)
The L a n d C o m m i s s i o n h a s b e e n
d i s b a n d e d and t h e B e t t e r m e n t Levy
abolished to encourage private
building.
(ii)
SET w h i c h a d d e d £ 1 2 0 o r m o r e t o
t h e c o s t of b u i l d i n g a n o r d i n a r y
family house h a s been h a l v e d and
w i l l be a b o l i s h e d n e x t y e a r .
steps
(iii) The r e s t r i c t i o n s i m p o s e d b y t h e
p r e v i o u s G o v e r n m e n t on t h e s a l e
of c o u n c i l h o u s e s t o t e n a n t s h a v e
been l i f t e d .
( i v ) The s t a m p d u t y on t h e m o r t g a g e
is
being a b o l i s h e d .
deed
( v ) F o l l o w i n g d i s c u s s i o n s b e t w e e n t h e
Government and t h e B u i l d i n g S o c i e t i e s
Association, the Association leaders
h a v e commended t o t h e i r members
p r a c t i c e s which w i l l improve t h e
p r o s p e c t of a m o r t g a g e f o r p e o p l e
whose e a r n i n g s a r e good b u t whose '
capital resources are limited (for
example s k i l l e d w o r k e r s and t h o s e
who h a v e c o m p l e t e d l o n g s t u d i e s f o r
a professional qualification)
They
h a v e d o n e t h e same f o r p e o p l e who
might o t h e r w i s e t h i n k t h e y were t o o
old f o r a mortgage advance.
( v i ) The O p t i o n M o r t g a g e Scheme i s b e i n g
made more f l e x i b l e .
The money l i m i t
g o v e r n i n g t h e scheme by which t h e
Government c a n h e l p g u a r a n t e e 100$
mortgage advance t o an o p t i o n
m o r t g a g o r i s b e i n g r a i s e d from
£5,000 to £7,500.
The p e r i o d a f t e r
which a mortgagor can r e l i n q u i s h
o p t i o n mortgage t e r m s and s w i t c h
back t o t a x r e l i e f i s being s h o r t e n e d
from 5 y e a r s t o 4 .
-8­
( v : i l )
( v i i i )
The G o v e r n m e n t h a s r e m o v e d t h e
money, c e i l i n g i n f o r c e f r o m ' 1 9 6 7 t o .
1970 on l o c a l ' a u t h o r i t y m o r t g a g e
advances.
This w i l l h e l p people-. ­
w h o , by t h e n a t u r e o f t h e i r h o u s i n g
need, might r e a s o n a b l y look to l o c a l
a u t h o r i t i e s r a t h e r than to the
ordinary . mortgage i n s t i t u t i o n s ' for. a
house purchase advance.
:;
A l o c a l a u t h o r i t y h a s power t o pay
t h e r e m o v a l e x p e n s e s of a t e n a n t
who i s w i l l i n g t o v a c a t e h i s d w e l l i n g
by p u r c h a s i n g a p r i v a t e dwelling...
The G o v e r n m e n t p r o p o s e s t o e n a b l e , "
l o c a l a u t h o r i t i e s t o pay s u c h a .
t e n a n t ' s l e g a l expenses - conveyance
e t c . - i n t h e same way a s a p r i v a t e ,
landlord.
As a r e s u l t a u t h o r i t i e s
i n a r e a s of h o u s i n g s h o r t a g e w i l l b e '
h e l p e d t o make a d d i t i o n a l a c c o m m o d a t i o n
- a v a i l a b l e t o t h e b a d l y hous-ed a n d
hceless.
A FAIR PATTERN OF RENTS
19.
D e s p i t e t h e c o n t i n u i n g g r o w t h of home o w n e r s h i p ,
t h e r e a r e s t i 1 1 over 8 m i l l i o n r e n t e d d w e l l i n g s .
Renting indeed w i l l always play a v i t a l p a r t in
meeting peoples' needs.
I t is in the rented s e c t o r
t h a t the g r e a t e s t problems a r i s e .
Many of t h e
e x i s t i n g e v i l s - u n f a i r n e s s b e t w e e n one c i t i z e n .and
^ a n o t h e r , n e g l e c t of p e o p l e i n n e e d , d i l a p i d a t i o n o f
p r o p e r t y , w a s t e of r e s o u r c e s - a r e c a u s e d by t h e .
a b s e n c e of any c o n s i s t e n t p r i n c i p l e . u n d e r l y i n g t h e
p a t t e r n of r e n t s ,
feents
are not consistently,;..
r e l a t e d e i t h e r t o tn e v a l u e o f t h e a c c o m m o d a t i o n o r
t o t h e means of t h e t e n a n t .
:
In the .Government's v i e w , ' t h e r i g h t p r i n c i p l e
i s f i r s t to determine a r e n t which i s reasonable for
t h e ' d w e l l i n g and t h e n to c o n s i d e r whether t h e
t e n a n t needs help towards t h a t r e n t .
Any r e n t
s u b s i d y s h o u l d be d i r e c t e d t o t h e t e n a n t r a t h e r t h a n
to the house.
To a c h i e v e t h i s , t h e G o v e r n m e n t
p r o p o s e s a new d e a l f o r r e n t e d h o u s e s b a s e d u p o n : .
-.9­
(CONFIDENTIAL) (i)
f a i r rents for
who c a n a f f o r d
(ii)
a rent rebate
cannot;
(iii)
t h e c o n c e n t r a t i o n of Exchequer s u b s i d i e s
on a u t h o r i t i e s w i t h t h e w o r s t h o u s i n g
problems.
Fair Rents
in the
a l l unfurnished
them;
or a l l o w a n c e
private
for
tenants
those
who
sector
21.
So l o n g a s t h e r e i s a s h o r t a g e o f d w e l l i n g s t o
l e t , t e n a n t s w i l l n e e d t o be p r o t e c t e d by r e n t
r e s t r i c t i o n and g i v e n s e c u r i t y of t e n u r e .
Yet both
m e a s u r e s make l a n d l o r d s l e s s w i l l i n g t o l e t .
If
r e n t s a r e k e p t u n r e a s o n a b l y low b y l a w , t e n a n t e d
p r o p e r t y l o s e s v a l u e and becomes d i f f i c u l t and f i n a l l y
impossible to maintain.
Thus a n y Government which
contemplates rent l e g i s l a t i o n has to maintain a
delicate balance.
A b u s e s - w h e t h e r by l a n d l o r d s o r
t e n a n t s - m u s t be s t a m p e d o u t .
But i f t h e l a n d l o r d
i s n e e d l e s s l y k n o c k e d , i t i s t h e t e n a n t s who f e e l
the
bruise longest.
Rent l e g i s l a t i o n cannot cure housing
shortage.
I t can o n l y m i t i g a t e t h e e f f e c t s of
s h o r t a g e by g i v i n g c o m f o r t t o s i t t i n g t e n a n t s a t t h e
e x p e n s e of p r o s p e c t i v e t e n a n t s .
And i f i t t i l t s t h e
b a l a n c e t o o much i n f a v o u r o f t e n a n t s i t f r i g h t e n s
o f f t h o s e l a n d l o r d s who h a v e a c c o m m o d a t i o n t o l e t a n d
t h u s m a k e s m a t t e r s w o r s e f o r a l l who n e e d i t .
22.
F o r many y e a r s r e n t l e g i s l a t i o n h a s b e e n
unbalanced.
L a n d l o r d s , o f whom t h e m a j o r i t y own o n l y
one o r two d w e l l i n g s , h a v e b e e n d i s c o u r a g e d b y t h e
b u r d e n of r e n t r e s t r i c t i o n .
Many h a v e c e a s e d t o
m a i n t a i n t h e i r p r o p e r t y or d i s p o s e d of i t a s soon a s
they could get vacant possession.
More a n d m o r e
p r i v a t e dwellings t o l e t have f a l l e n i n t o d i s r e p a i r
t o t h e s e r i o u s d i s a d v a n t a g e of t h e t e n a n t .
Some h a v e
become u n f i t a n d b e e n l o s t t o t h e h o u s i n g m a r k e t
altogether.
23.
The G o v e r n m e n t i n t e n d s t o r e s t o r e t h e b a l a n c e of
r e n t l e g i s l a t i o n f o r t h e b e n e f i t of b o t h t e n a n t and
l a n d l o r d b y b a s i n g i t s p o l i c y on t h e f a i r r e n t
system i n t r o d u c e d in t h e Rent Act
1965.
A "fair rent"
-10­
is the l i k e l y market r e n t t h a t a dwelling could
command i f s u p p l y a n d demand f o r r e n t e d a c c o m m o d a t i o n
were b r o a d l y i n b a l a n c e i n t h e a r e a c o n c e r n e d .
Some
c r i t i c s of t h e f a i r r e n t s y s t e m h a v e a r g u e d t h a t
fair rents are too high;
others that they are too
low.
The F r a n c i s C o m m i t t e e was s e t u p i n 1969 t o l o o k
into these c r i t i c i s m s .
I t concluded unanimously t h a t
the system i s working w e l l .
This is a t r i b u t e to
t h e r e n t o f f i c e r s a n d r e n t a s s e s s m e n t c o m m i t t e e s who
operate i t .
The G o v e r n m e n t a c c e p t s t h i s c o n c l u s i o n
and e n d o r s e s t h e t r i b u t e .
I t w i l l b u i l d on t h e
s u c c e s s so f a r a c h i e v e d .
24.
For a s t a r t t h e Government p r o p o s e s t o b r i n g
c o n t r o l l e d t e n a n c i e s more s p e e d i l y i n t o t h e f a i r
rent system.
At p r e s e n t more p r i v a t e r e n t e d d w e l l i n g s
are o u t s i d e the f a i r r e n t system than w i t h i t i t .
There a r e s t i l l 1.3 m i l l i o n t e n a n c i e s which a r e
c o n t r o l l e d a s d i s t i n c t from r e g u l a t e d .
A p a r t from
t h o s e f o r m a l l y n o t i f i e d u n f i t , t h e s e w i l l be b r o u g h t
into r e n t r e g u l a t i o n under a staged
programme
beginning 1 January 1973.
T h i s i s t h e d a t e when r e n t
a l l o w a n c e s f o r p r i v a t e t e n a n t s w i l l g e n e r a l l y become
a v a i l a b l e under the Government's p r o p o s a l s .
The
t r a n s f e r from c o n t r o l t o r e g u l a t i o n w i l l t a k e a b o u t
three years.
I t w i l l be s t a g e d by r a t e a b l e v a l u e
bands b e g i n n i n g w i t h the h i g h e s t r a t e a b l e v a l u e s .
L a n d l o r d s w i l l be a b l e t o a p p l y t o t h e r e n t o f f i c e r
f o r r e g i s t r a t i o n of a f a i r r e n t t h r e e months b e f o r e
t h e t e n a n c y comes o u t o f c o n t r o l .
The t r a n s i t i o n
from t h e c o n t r o l l e d r e n t t o t h e r e g i s t e r e d f a i r r e n t
w i l l be phased i n t h r e e equal a n n u a l i n s t a l m e n t s
(ie over a two-year phasing p e r i o d ) .
But, u n t i l the
f a i r r e n t i s r e a c h e d , t h e a n n u a l i n c r e m e n t w i l l be
n o t l e s s t h a n 50 p p e r week.
At t h e end of t h e d a y n o
t e n a n t whose r e n was p r e v i o u s l y c o n t r o l l e d w i l l pay
more t h a n t h e f a i r r e n t f o r h i s a c c o m m o d a t i o n .
Those
who c a n n o t a f f o r d t h e f a i r r e n t w i l l b e h e l p e d b y a
r e n t a l l o w a n c e from t h e community i n s t e a d o f a s u b s i d y
from t h e i r l a n d l o r d s
-11­
25.
In a c c o r d a n c e w i t h a m a j o r i t y recommendation of
t h e F r a n c i s Committee t h e Government p r o p o s e s t o /
allow l a n d l o r d s and t e n a n t s ' t o a g r e e r e n t i n c r e a s e s
between t h e m s e l v e s .
T h i s w i l l be on t h e b a s i s t h a t
e i t h e r party has the r i g h t to apply to the r e n t
o f f i c e r a t any time f o r a f a i r r e n t .
Such a g r e e m e n t s
w i l l be p o s s i b l e i n t h r e e s i t u a t i o n s : ­
( i )
( i i )
f o r t h e t e n a n c y w h i c h comes o u t
rent control;
of
for the tenancy already regulated but
f o r w h i c h no r e n t h a s b e e n r e g i s t e r e d , ,
( u n d e r e x i s t i n g law t h e c u r r e n t r e n t .
c a n n o t be i n c r e a s e d u n l e s s a f a i r ; r e n t
is f i r s t registered);
( i i i ) ft) r t h e t e n a n c y f o r w h i c h a f a i r
has been r e g i s t e r e d and has been
f o r c e f o r t h r e e y e a r s , b u t where
and t e n a n t a r e a b l e to a g r e e the
rent
in
landlord
rent.
26.
I t i s n o t t h e f u n c t i o n of t h e S t a t e t o i n t e r f e r e
in p r i v a t e c o n t r a c t s f r e e l y made.
But t h e law
should e n s u r e t h a t a c o n t r a c t between l a n d l o r d and
t e n a n t i s made on e q u a l t e r m s .
The G o v e r n m e n t ,
t h e r e f o r e , p r o p o s e s t o make r e n t a g r e e m e n t s s u b j e c t
to the following safeguards for the t e n a n t : :
( i )
When a t e n a n c y p a s s e s from- c o n t r o l t o
r e g u l a t i o n , the t e n a n t w i l l have had
n o r e c e n t e x p e r i e n c e of w h a t c o n s t i t u t e s
a reasonable rent for h i s dwelling.
The
Government, t h e r e f o r e p r o p o s e t h a t i f t h e
l a n d l o r d a n d t e n a n t a g r e e t h e new r e n t
without reference to the rent officer,
t h e a g r e e m e n t w i l l h a v e t o be w r i t t e n '
on a p r e s c r i b e d f o r m .
T h i s form w i l l
e x p l a i n ' a l l L t h e t e n a n t ' s r i g h t s , and a
c o p y w i l l n a v e t o be l e f t w i t h t h e t e n a n t .
The l a n d l o r d w i l l b e r e q u i r e d t o l o d g e
the agreement with the l o c a l " a u t h o r i t y .
He w i l l n o t be' f r e e t o I n c r e a s e t h e r e n t
u n t i l four weeks a f t e r t h e a g r e e m e n t
has been lodged.
The a g r e e m e n t w i l l b e
open t o p u b l i c i n s p e c t i o n .
;
( i i )
When t h e t e n a n t o f a t e n a n c y w h i c h i s
a l r e a d y r e g u l a t e d b u t f o r w h i c h no r e n t
h a s y e t b e e n r e g i s t e r e d a g r e e s , t o a new
r e n t , t h e a g r e e m e n t w i l l n a v e t o be
i n w r i t i n g , s o t h a t t h e t e n a n t knows
what he i s a g r e e i n g t o .
;
( i i i )
When a r e n t h a s b e e n r e g i s t e r e d a t
l e a s t t h r e e y e a r s , and t h e p a r t i e s :
a g r e e on a new r e n t , t h e y c a n a p p l y
j o i n t l y t o the r e n t o f f i c e r .for /
c a n c e l l a t i o n of t h e r e g i s t r a t i o n .
He w i l l c a n c e l t h e r e g i s t r a t i o n only,
i f he is s a t i s f i e d t h a t t h e p r o p o s e d
r e n t does n o t exceed a f a i r r e n t . '
:
( i v )
I n a l l t h r e e s i t u a t i o n s , t h e r e w i l l be
n o o b l i g a t i o n on t h e t e n a n t t o a g r e e
a new r e n t w i t h t h e l a n d l o r d .
If the
t e n a n t d e c l i n e s t o a g r e e a new r e n t ,
t h e o n u s w i l l b e on t h e l a n d l o r d t o
ask the r e n t officer to r e g i s t e r a
fair rent.
Where t h e t e n a n t d o e s
a g r e e t o a new r e n t , b u t l a t e r f e e l s
i t was t o o h i g h , h e w i l l b e a b l e a t ­
any time to apply to the r e n t o f f i c e r .
If a tenant is r e l u c t a n t to approach
t h e r e n t o f f i c e r , he o r a n y o n e on h i s
behalf can bring, the case to the n o t i c e
of t h e l o c a l a u t h o r i t y .
The l o c a l
a u t h o r i t y w i l l be empowered t o r e f e r
i t to the nent officer, as the Francis
C o m m i t t e e j r e c o m m e n d e d .
, ­
:
27.
The G o v e r n m e n t a j l s o p r o p o s e s t o p r e s c r i b e new
r e n t b o o k n o t i c e s t o make s u r e t h a t e a c h t e n a n t p f a
w e e k l y t e n a n c y i s givjen c l e a r i n f o r m a t i o n a b o u t , h i s
rights.
I n f o r m a t i o n l e a f l e t s w i l l be p r o v i d e d f r e e
t o a l l o f f i c e s and otlher a g e n c i e s which a d v i s e t e n a n t s .
28.
The G o v e r n m e n t h a s t a k e n a d e c i s i o n o n ' t h r e e
o t h e r m a j o r - r e c o m m e n d a t i o n s of t h e F r a n c i s C o m m i t t e e .
As t h e M i n i s t e r f o r H o u s i n g a n d C o n s t r u c t i o n a n n o u n c e d
on 10 M a r c h , 1 9 7 1 ,
-13­
fCONFIDENTIAL")
( i )
( i i )
( i i i )
The G o v e r n m e n t a g r e e s t h a t i n d e f i n i t e
s e c u r i t y of t e n u r e f o r f u r n i s h e d t e n a n t s
would c a u s e t h e s u p p l y of f u r n i s h e d
a c c o m m o d a t i o n t o d r y u p a n d s o "be a g a i n s t
t h e l o n g e r t e r m i n t e r e s t of t e n a n t s
themselves.,
The G o v e r n m e n t w i l l t a k e t h e e a r l i e s t
l e g i s l a t i v e opportunity to propose
i n c r e a s e s i n t h e maximum p e n a l t i e s f o r
h a r a s s m e n t and i l l e g a l e v i c t i o n .
The G o v e r n m e n t r e j e c t s t h e r e c o m m e n d a t i o n
to take out o f . r e n t r e g u l a t i o n s t e n a n c i e s
o f d w e l l i n g s w i t h a r a t e a b l e v a l u e b e t w e e n ..
£ 3 0 0 a n d £400 i n G r e a t e r L o n d o n , a n d .
b e t w e e n £ 1 5 0 a n d £200 e l s e w h e r e .
29.
The G o v e r n m e n t i s c o n s i d e r i n g t h e many, o t h e r
r e c o m m e n d a t i o n s o f t h e F r a n c i s C o m m i t t e e on b o t h
f u r n i s h e d and u n f u r n i s h e d t e n a n c i e s .
When t h e s e h a v e
been s u b j e c t e d t o p u b l i c d e b a t e and e x a m i n a t i o n , i t
w i l l p r o p o s e a n y new l e g i s l a t i o n n e c e s s a r y .
F a i r R e n t s
in the public
sector
30.
The G o v e r n m e n t p r o p o s e s t o a p p l y t h e p r i n c i p l e
of f a i r r e n t s t o l o c a l a u t h o r i t y d w e l l i n g s .
These
r e n t s w i l l b e s u b j e c t t o t h e same b r o a d c r i t e r i a a s
t h e r e n t s of p r i v a t e u n f u r n i s h e d d w e l l i n g s . I n
c o n s e q u e n c e t h e two m a i n s e c t o r s o f t h e m a r k e t f o r
r e n t e d h o u s i n g w i l l , f o r t h e f i r s t t i m e , be g o v e r n e d
by one common e q u i t a b l e p r i n c i p l e - f a i r r e n t s f o r
all.
?
31.
The r e n t o f e v e r y c o u n c i l d w e l l i n g w i l l i n f u t u r e
r e f l e c t i t s v a l u e by r e f e r e n c e t o i t s c h a r a c t e r ,
l o c a t i o n , a m e n i t i e s a n d s t a t e of r e p a i r , b u t
d i s r e g a r d i n g t h e v a l u e due t o any l o c a l s h o r t a g e of
s i m i l a r accommodation.
C o u n c i l t e n a n t s w i l l no l o n g e r
be l i a b l e t o r e n t i n c r e a s e s r e s u l t i n g f r o m t h e s t a t e
of t h e i r a u t h o r i t y ' s H o u s i n g R e v e n u e A c c o u n t o r t h e
s i z e of i t s h o u s e b u i l d i n g programme.
The r e n t of t h e
t e n a n t w i t h o u t a r e b a t e w i l l no l o n g e r be a f f e c t e d by
the rebates granted to other t e n a n t s .
Nor w i l l i t h e
a f f e c t e d by t h e e x t e n t t o w h i c h t h e Housing Revenue
(CONFIDENTIAL) ^
^
B
i
T
^
MI
j
S
I
M IU V
T
H
f
l WIP H
V
'
.
f
l
r i
1
1
"
i-HWU
a
n
n
m
mJ
t
i
l
M
W
W
t
t
f
i
t
t
i
w
r
a
a
'1
1 r--' '
'
i
r 'WH'f'
i
­i
n
V
^
"
"
"
"
^
^
1
JI
J
B
W
1
t
A c c o u n t i s made t o b e a r p a r t o f t h e h i g h c o s t o f s l u m
c l e a r a n c e or community b e n e f i t s c o n n e c t e d w i t h .
council housing.
Nor w i l l t h e r e n t of t h e
d w e l l i n g d e p e n d on t h e a m o u n t o f E x c h e q u e r s u b s i d y
a v a i l a b l e t o the a u t h o r i t y , n o r of any r a t e fund
c o n t r i b u t i o n w h i c h i t c h o o s e s t o m a k e , n o r on t h e
a p p l i c a t i o n of s u c h s u b s i d i e s t o t h e d w e l l i n g . '
The o n l y c r i t e r i o n o f t h e r e n t o f the- d w e l l i n g ,
w i l l be t h e f a i r r e n t f o r t h a t d w e l l i n g .
3 2 . * The p r o p o s e d p r o c e d u r e f o r d e t e r m i n i n g t h e
f a i r r e n t o f l o c a l a u t h o r i t y d w e l l i n g s w i l l , b e a s :.
follows:
- ( i )
The l o c a l a u t h o r i t y w i l l a s s e s s a f a i r
r e n t f o r every dwelling.
It will.be
f r e e t o c o n s u l t t h e R e n t O f f i c e r on t h e
l e v e l of f a i r r e n t s i n i t s a r e a , a n d t h e
Government b e l i e v e s t h a t a u t h o r i t i e s will­
find such c o n s u l t a t i o n h e l p f u l .
( i i )
The a u t h o r i t y w i l l t h e n p u b l i s h i t s
p r o v i s i o n a l a s s e s s m e n t s and c o n s i d e r
any r e p r e s e n t a t i o n s which any t e n a n t
may w i s h t o make a b o u t t h e a s s e s s m e n t
f o r h i s home.
( i i i )
Thereafter the a u t h o r i t y w i l l submit
i t s a s s e s s m e n t s t o a s p e c i a l committee
drawn from t h e R e n t A s s e s s m e n t P a n e l ,
(from which R e n t Assessment Committees
a r e a l s o d r a w n ) . .Tne c o m m i t t e e w i l l t e s t
t h e a s s e s s m e n t s by i n s p e c t i n g t y p i c a l
d w e l l i n g s ! and making sample c h e c k s .
If
. i n t h e l i g h t o f t h e s e t e s t s t h e c o m m i t t e e
agrees with the local authority's
a s s e s s m e n t s , i t w i l l c o n f i r m them and
t h e y w i l l t h e r e u p o n become t h e f a i r r e n t s
of t h e a u t h o r i t y ' s d w e l l i n g s c o n c e r n e d .
I f t h e committee d i s a g r e e w i t h any of
the a u t h o r i t y ' s assessments, i t . w i l l
inform the a u t h o r i t y and, a f t e r c o n s i d e r i n g
a n y comments by t h e a u t h o r i t y . , w i l l , a s
necessary, a l t e r the assessments in the
l i g h t of t h e s t a t u t o r y c r i t e r i a . '
The
a l t e r e d a s s e s s m e n t s w i l l t h e n become t h e
f a i r r e n t s of t h e d w e l l i n g s c o n c e r n e d .
YJY).
T h e s e p r o p o s a l s a r e n o t a s n o v e l a s t h e y :may a t
f i r s t appear.
As t h e l a w now s t a n d s , a l o c a l .
a u t h o r i t y can c h a r g e r e n t s which i t c o n s i d e r s
c iiriparablo w i t h t h e f a i r r e n t s r e g i s t e r e d f o r p r i v a t e
tenants in i t s a r e a .
A number of a u t h o r i t i e s a l r e a d y
f i x r e n t s on t h i s b a s i s f o r some o f t h e i r d w e l l i n g s .
L o c a l a u t h o r i t i e s a r e a t p r e s e n t r e q u i r e d t o make,
reasonable charges for t h e i r dwellings.
In future
t h e y w i l l b e r e q u i r e d t o a p p l y new s t a t u t o r y c r i t e r i a
to give, e f f e c t to the f a i r r e n t p r i n c i p l e .
But there
w i l l b e two s i g n i f i c a n t c h a n g e s :
( i )
( i i )
I n f u t u r e e v e r y a u t h o r i t y w i l l be u n d e r
a d u t y t o c o n s i d e r t h e v i e w s of t e n a n t s
on i t s a s s e s s m e n t of t h e f a i r r e n t , a n d
to subject t h i s assessment to the
i n d e p e n d e n t s c r u t i n y of members of the, R e n t
Assessment Panels.
T h e s e P a n e l s h a v e now
b u i l t up a n i m p r e s s i v e e x p e r t i s e on t h e
f a i r rent levels appropriate in the private
s e c t o r a n d t h e i r members a r e w e l l q u a l i f i e d
t o u n d e r t a k e t h i s new r e s p o n s i b i l i t y . :
At p r e s e n t a l o c a l a u t h o r i t y i s n o t
o b l i g e d t o r e b a t e t h e r e n t of any­
dwelling.
In f u t u r e each a u t h o r i t y
w i l l be u n d e r a d u t y t o g r a n t a r e b a t e
t o a n y t e n a n t who c a n n o t a f f o r d t h e ­
fair. rent.
The . r e b a t e w i l l . b e g o v e r n e d
by t h e n a t i o n a l scheme d e s c r i b e d b e l o w .
34.^ The S e c r e t a r y o f S t a t e f o r t h e E n v i r o n m e n t a n d
t h e S e c r e t a r y of S t a t e i f o r Wales p r o p o s e t o ' s e t up a
C o m m i t t e e t o a d v i s e t h e m on a n y g e n e r a l p r o b l e m s
w h i c h may a r i s e i n c o n n e c t i o n w i t h t h e d e t e r m i n a t i o n
of f a i r r e n t s i n t h e l j p c a l a u t h o r i t y s e c t o r . , T h i s
a d v i s o r y committee w i l l have an independent chairman
and a membership r e f l e c t i n g t h e p o i n t s of view of
Rent Assessment P a n e l s , Local A u t h o r i t i e s a n d ' t h e i r
t e n a n t s .
- ­
35.. W i t h t h e i n t r o d u c t i o n o f f a i r r e n t s a c o u n c i l
t e n a n t w i l l b e e n t i t l e d t o t h e same p r o t e c t i o n a g a i n s t
summary e v i c t i o n a s a n y o t h e r t e n a n t .
The G o v e r n m e n t ,
t h e r e f o r e i p r o p o s e s t o t e r m i n a t e t h e a p p l i c a t i o n of
t h e S m a l l T e n e m e n t s R e c o v e r y A c t 1838 w h i c h e n a b l e s
-16­
-
l o c a l a u t h o r i t i e s . t o o b t a i n p o s s e s s i o n u n d e r a summary
procedure n o t a v a i l a b l e t o other l a n d l o r d s .
In future
a l o c a l a u t h o r i t y w i l l be a b l e t o e v i c t a t e n a n t
o n l y by a n o r d e r from t h e c o u n t y c o u r t .
36.
The r e n t s o f m o s t c o u n c i l d w e l l i n g s a r e a t
present l e s s than the f a i r r e n t .
To a p p l y t h e f a i r ,
r e n t w i t h o u t p h a s i n g would d i s l o c a t e t h e b u d g e t s of
many f a m i l i e s ' w h o w i l l n o t q u a l i f y f o r a r e b a t e .
The G o v e r n m e n t , t h e r e f o r e , p r o p o s e s t o i n t r o d u c e
f a i r r e n t s by a n n u a l s t e p s .
37.
The f o r m u l a g o v e r n i n g t h e s i z e a n d d a t e
s t e p s i s e x p l a i n e d in d e t a i l in Appendix l
main f e a t u r e s a r e a s f o l l o w s :
u
( 1 )
( i i )
( i i i )
of t h e
Its
The w e e k l y r e n t o f a l l d w e l l i n g s o f
a l o c a l a u t h o r i t y whose r e n t i s b e l o w
t h e d e t e r m i n e d f a i r r e n t , o r whose f a i r
r e n t has not yet been determined, w i l l
be i n c r e a s e d by an a v e r a g e of 50p f o r
t h e whole of each f i n a n c i a l y e a r b e g i n n i n g
w i t h 1 9 7 2 / 3 , w i t h a maximum of 7 5 p f o r
each year f o r any d w e l l i n g s .
W i t h i n t h i s maximum t h e a u t h o r i t y w i l l
be f r e e t o e f f e c t t h e a v e r a g e i n c r e a s e
by w h a t e v e r i n c r e a s e s i t c o n s i d e r s
suitable for the individual dwellings
t o which t h e a v e r a g e i n c r e a s e a p p l i e s .
If the a u t h o r i t y considered that the
r e n t s of c e r t a i n d w e l l i n g s were a l r e a d y
a t or n e a r the f a i r r e n t l e v e l , i t could
make l i t t l e o r n o i n c r e a s e i n t h o s e
r e n t s a n d make a s o m e w h a t l a r g e r i n c r e a s e
i n t h e r e n t s of o t h e r d w e l l i n g s .
The a u t h o r i t y w i l l b e f r e e t o s e c u r e t h e
a v e r a g e w e e k l y i n c r e a s e of 50p f o r t h e
w h o l e f i n a n c i a l y e a r by m a k i n g t h a t i n c r e a s e
a t t h e b e g i n n i n g of A p r i l i n 1 9 7 2 / 3 and
subsequent years.
But, i f i t so p r e f e r s ,
t h e a u t h o r i t y w i l l be f r e e t o a l t e r t h e
t i m i n g i n ways w h i c h w i l l s t i l l a c h i e v e
b r o a d l y t h e same f i n a n c i a l r e s u l t a s a n
annual increase in April.
For t h i s purpose
-17­
r e n t i n c r e a s e s made b e t w e e n 1 O c t o b e r
a n d 31 March 1972 c a n c o u n t a s h a v i n g
made i n 1 9 7 2 / 3 .
1971
been
38.
I f , when t h e f a i r r e n t i s d e t e r m i n e d , i t p r o v e s
t o be l e s s t h a n t h e c u r r e n t r e n t , t h e r e n t w i l l b e
r e d u c e d arid o v e r p a y m e n t s r e f u n d e d .
39.
Once f a i r r e n t s h a v e b e e n d e t e r m i n e d f o r c o u n c i l
d w e l l i n g s , t h e y w i l l be r e d e t e r m i n e d a t t h r e e y e a r l y
i n t e r v a l s b y t h e same p r o c e d u r e a s f o r t h e f i r s t
determination.
Any r e n t i n c r e a s e r e s u l t i n g f r o m
a r e d e t e r m i n a t i o n o f t h e f a i r r e n t w i l l a l s o be
subject to phasing.
40.
The e f f e c t o f t h e t r a n s i t i o n on a n y i n d i v i d u a l
tenant w i l l vary according to circumstances.
Every
l o c a l a u t h o r i t y w i l l be r e q u i r e d t o a p p l y t h e
n a t i o n a l r e n t r e b a t e scheme n o t l a t e r t h a n O c t o b e r
1972.
The G o v e r n m e n t e x p e c t s t h a t m o s t a u t h o r i t i e s
w i l l a p p l y t h e scheme i n c o n j u n c t i o n w i t h t h e f i r s t
a n n u a l r e n t i n c r e a s e t o b e made u n d e r t h e t r a n s i t i o n
to f a i r r e n t s .
T e n a n t s w i t h low i n c o m e s o r h e a v y
f a m i l y c o m m i t m e n t s w i l l b e n e f i t from t h e s c h e m e .
For some o f t h e m t h e c u r r e n t r e n t w i l l b e r e d u c e d .
PEOPLE IN NEED
41.
The G o v e r n m e n t ' s c e n t r a l p o l i c y of s u b s i d i s i n g
p e o p l e , n o t b r i c k s a n d m o r t a r , w i l l be c a r r i e d o u t
through t h e n a t i o n a l r e n t r e b a t e scheme.
At p r e s e n t
many l o c a l a u t h o r i t i e s g r a n t n o r e n t r e b a t e s t o t h e i r
tenants.
Others o p e r a t e r e b a t e schemes which g i v e t o o
l i t t l e help to tenants in need.
Private tenants
r e c e i v e n o r e b a t e a t a l l , h o w e v e r p o o r t h e y may b e ,
except i n Birmingham where a p r o g r e s s i v e a u t h o r i t y h a s
p i o n e e r e d a r e n t a l l o w a n c e s c h e m e on i t s own a c c o u n t .
Under t h e n a t i o n a l s c h e m e p r o p o s e d by t h e G o v e r n m e n t ,
a l l c o u n c i l t e n a n t s w i l l be a b l e t o c l a i m a r e b a t e
which i s f a i r i n r e l a t i o n t o t h e i r means and f a m i l y
circumstances,,
So, f o r t h e f i r s t t i m e , w i l l p r i v a t e
t e n a n t s of u n f u r n i s h e d accommodation.
4 2 . The n a t i o n a l scheme w i l l a l s o be a n i m p o r t a n t
new w e a p o n a g a i n s t f a m i l y p o v e r t y .
The F a m i l y I n c o m e
S u p p l e m e n t was d e v i s e d t o h e l p t h o s e w h o s e i n c o m e s .
a r e low i n r e l a t i o n t o t h e i r f a m i l y r e s p o n s i b i l i t i e s .
But people w i t h l o w i n c o m e s a n d h i g h . r e n t s n e e d m o r e
h e l p t h a n t h o s e w i t h l o w i n c o m e s a n d low r e n t s . : The
n a t i o n a l scheme and t h e F a m i l y Income S u p p l e m e n t scheme'
will in combination g i v e e f f e c t i v e h e l p t o people
w i t h low i n c o m e s who h a v e c h i l d r e n t o s u p p o r t b u t . w h o
are not e l i g i b l e for Supplementary Benefit because
they a r e in f u l l - t i m e work.
43.
The b a s i c s t r u c t u r e o f the r e n t r e b a t e schqme
f o r c o u n c i l t e n a n t s w i l l b e a s f o l l o w s . When t h e
scheme i s i n t r o d u c e d , e v e r y t e n a n t w i l l have' a n e e d s
a l l o w a n c e of £ 1 3 . 5 0 f o r h i m s e l f a n d h i s w i f e arid
£2.50 f o r each c h i l d .
I f h i s g r o s s income i s , e x a c t l y ^
t h e same a s h i s n e e d s a l l o w a n c e h e w i l l p a y 4 0 $ o n l y
of t h e r e n t o f h i s h o u s e .
F o r e v e r y £1 b y w h i c h . h i s ­
i n c o m e e x c e e d s t h e n e e d s a l l o w a n c e t h e 4 0 $ r e n t wi 11
be i n c r e a s e d b y 1 7 p .
F o r e v e r y £1 b y w h i c h h i s i n c o m e
f a l l s s h o r t of the a l l o w a n c e , t h e 40$ r e n t w i l l be
r e d u c e d b y 25p*.
44.
For example, a m a r r i e d c o u n c i l t e n a n t w i t h
2 c h i l d r e n , l i v i n g i n a house w i t h a weekly, r e n t of
£5, w i l l have h i s weekly r e n t r e d u c e d t o £3.95? i f h i s
weekly income i s £30, t o £ 3 . 1 0 ^ i f i t i s £ 2 5 , and t o
£1.37^ i f i t i s £16.
I f h i s w e e k l y i n c o m e w e r e £25
h i s r e b a t e w o u l d b e c a l c u l a t e d on t h e f o l l o w i n g b a s i s : ­
?
i)
t h e " n e e d a l l o w a n c e " i s f i r s t d e d u c t e d from
t h e t e n a n t s. w e e k l y income, t o a l l o w f o r t h e
b a s i c c o s t oif n e c e s s i t i e s f o r h i m s e l f , a n d
his family.
In t h i s case the allowance w i l l
be £ 1 8 . 5 0 , i ^ e £ 1 3 . 5 0 f o r h i m s e l f a n d h i s
wife
1
*If
for
the 40$ r e n t i s l e s s
calculating the rent
-19­
than £1, the s t a r t i n g
p a y a b l e w i l l be £ 1 . ,
point
a n d £ 2 . 5 0 f o r e a c h of h i s 2 c h i l d r e n .
11)
as h i s needs allowance is l e s s than h i s
i n c o m e , t h e r e n t p a i d b y h i m w i l l be 4 0 $ o f
t h e r e n t o f h i s h o u s e ( £ 5 ) p l u s 1 7 $ of t h e
d i f f e r e n c e ( £ 6 . 5 0 ) between h i s income (£25) and
h i s needs allowance' (£18.50).
The r e n t p a i d by
h i m w i l l t h e r e f o r e be - £ 3 . 1 0 4 ( £ 2 . 0 0 p l u s £ 1 . 1 0 4 )
and h i s r e b a t e w i l l be £1..894.
The r e n t p a i d t h u s t a k e s a c c o u n t n o t o n l y of t h e
t e n a n t ' s i n c o m e a n d f a m i l y c i r c u m s t a n c e s b u t a l s o of
t h e v a l u e of h i s h o u s e .
The r e b a t e , h o w e v e r , d o e s n o t
r o b him o f t h e i n c e n t i v e t o i n c r e a s e h i s i n c o m e .
If
h i s w e e k l y i n c o m e w e r e t o i n c r e a s e b y £1 h e w o u l d h a v e
t o p a y o n l y 17p a we elk m o r e , i n r e n t .
­
' -i
45.
I f t h e w e e k l y income of a m a r r i e d c o u n c i l t e n a n t
w i t h 3 c h i l d r e n were :only £16, and t h o r e n t of h i s
h o u s e w e r e £ 5 , h i s r e b a t e w o u l d be c a l c u l a t e d a s
follows:*'
i)
h i s n e e d s a l l o w a n c e w i l l b e £21 i e £ 1 3 . 5 0 .
f o r h i m s e l f a n d h i s w i f e a n d £ 2 . 5 0 f o r e a c h of
his 3 children.'
' i i ) a s the needs allowance is g r e a t e r than h i s
income t h e . r e n t p a i d by him w i l l be 40$. of t h e
r e n t of h i s h o u s e (£5) minus 2 5 $ of t h e
d i f f e r e n c e . ( £ 5 ) between his n e e d s a l l o w a n c e
( £ 2 1 ) and h i s income ( £ 1 6 ) .
The r e n t p a i d b y
h i m w i l l t h e r e f o r e be 7 5 p ( £ 2 0 0 . m i n u s £ 1 . 2 5 ; a n d
h i s r e b a t e w i l l : be' £ 4 . 2 5 .
o
I f t h e w e e k l y income^ o f t h e t e n a n t w e r e o n l y £ 1 3 , . t h e
r e n t p a i d b y him w i l l be 4 0 $ o f t h e r e n t of h i s h o u s e
( £ 5 ) m i n u s 2 5 $ o f th e d i f f e r e n c e ( £ 8 ) b e t w e e n h i s
n e e d s a l l o w a n c e (£21) and h i s income (£13)'.
The r e n t
p a i d b y him w i l l t h e r e f o r e be n i l ( £ 2 m i n u s - £ 2 )
e
46.
The r e n t a l l o w a n c e .scheme f o r p r i v a t e t e n a n t s
w i l l work i n t h e same way a s t h e r e n t r e b a t e s c h e m e
for council tenants except that the private tenant
w i l l r e c e i v e a cash allowance whereas the c o u n c i l
t e n a n t s r e n t p a y m e n t w i l l be r e d u c e d by t h e a m o u n t
of a n y r e b a t e g r a n t e d t o h i m .
The a m o u n t o f t h e . . r e n t
a l l o w a n c e p a i d t o a p r i v a t e t e n a n t w i l l be t h e same,
as the r e n t r e b a t e granted to a council t e n a n t i f t h e i r ;
r e n t , income and f a m i l y c i r c u m s t a n c e s a r e t h e same.
1
;
'
-20­
(CONFIDENTIAL) 47.
F u r t h e r e x a m p l e s , . pf\ th e o p e r a t i o n of t h e .
n a t i o n a l scheme i n b o t h t h e p u b l i c a n d t h e p r i v a t e
s e c t o r a r e given in Appendix 2 .
This s e t s out in
d e t a i l t h e model p r o v i s i o n s f o r r e n t r e b a t e s and
a l l o w a n c e s which w i l l i n i t i a l l y be p r e s c r i b e d by
t h e S e c r e t a r i e s of S t a t e f o r t h e Environment and
for Wales.
The e x a m p l e s i l l u s t r a t e t h e G o v e r n m e n t s
a p p r o a c h t o t h e problem of h e l p i n g t e n a n t s w i t h
their rent.
A r e n t s u b s i d y d i f f e r s from o t h e r
income r e l a t e d b e n e f i t s .
Housing i s a b a s i c
n e c e s s i t y , but i t s cost v a r i e s g r e a t l y for
h o u s e h o l d e r s w i t h s i m i l a r incomes and f a m i l y
commitments.
To be f a i r t h e r e n t s u b s i d y m u s t n o t
only be a v a i l a b l e t o t e n a n t s whose income i s a t or
b e l o w t h e minimum l e v e l j u d g e d t o b e t o l e r a b l e f o r
such p u r p o s e s a s Supplementary B e n e f i t .
I t must
a l s o b e . a v a i l a b l e t o t e n a n t s w i t h incomes above t h i ;
l e v e l , i f t h e r e n t o f t h e i r home w o u l d o t h e r w i s e
i m p o s e a n u n f a i r b u r d e n on t h e i r f a m i l y b u d g e t .
T h i s s u b s i d y must be wide i n s c o p e and f l e x i b l e i n
application.
48.
The G o v e r n m e n t p r o p o s e a n a t i o n a l s c h e m e
locally administered.
Local a u t h o r i t i e s h a v e , by
l a w , s p e c i a l r e s p o n s i b i l i t i e s t o w a r d s t h e i r own
t e n a n t s and a g e n e r a l r e s p o n s i b i l i t y f o r
assessing
t h e h o u s i n g n e e d s and p r o b l e m s of t h e i r a r e a .
Since a r e n t subsidy is a c o n t r i b u t i o n towards
h o u s i n g c o s t s , t h e Government c o n s i d e r s t h a t i t i s
a p p r o p r i a t e l y a d m i n i s t e r e d by l o c a l h o u s i n g
authorities.
T h i s v i e w i s s n a r e d by t h e l o c a l
a u t h o r i t y a s s o c i a t i o n s i n England and Wales.
49.
The G o v e r n m e n t p r o p o s e t h a t e a c h a u t h o r i t y
s h o u l d be r e q u i r e d t o i n t r o d u c e a r e n t r e b a t e
s c h e m e f o r i t s own t e n a n t s n o t l a t e r t h a n O c t o b e r
1972 a n d a s i m i l a r s c h e m e of r e n t a l l o w a n c e s , f o r
p r i v a t e t e n a n t s of u n f u r n i s h e d a c c o m m o d a t i o n i n
i t s area not l a t e r than January 1973.*
The
d i f f e r e n t d a t e s of i n t r o d u c t i o n a r e p r o p o s e d f o r
administrative reasons.
Footnote:I n London t h e r e n t a l l o w a n c e scheme
w o u l d be o p e r a t e d b y t h e B o r o u g h s .
Each London
a u t h o r i t y w i l l g r a n t r e b a t e s t o i t s own t e n a n t s .
-c 1 - .
50.
The p r o v i s i o n s o f e a c h s c h e m e w i l l h a v e t o b e
no l e s s f a v o u r a b l e t o t h e t e n a n t s t h a n t h e
p r e s c r i b e d model p r o v i s i o n s .
An a u t h o r i t y w i l l ,
h o w e v e r , b e f r e e t o make t h e s c h e m e s more f a v o u r a b l e ,
provided t h e a l t e r a t i o n s apply t o both r e b a t e s and
a l l o w a n c e s a n d do n o t i n c r e a s e t h e c o s t of e i t h e r b y
more t h a n 10$ o v e r t h e e s t i m a t e d c o s t o f a d o p t i n g
t h e model p r o v i s i o n s .
For example a l o c a l a u t h o r i t y
w i l l be f r e e t o d i s r e g a r d t h e f u l l amount of a war
disablement pension.
The S e c r e t a r i e s o f S t a t e w i l l
r e v i s e t h e model p r o v i s i o n s from t i m e t o t i m e i n t h e
l i g h t o f e x p e r i e n c e and c h a n g i n g c i r c u m s t a n c e s .
They
w i l l be a d v i s e d i n t h i s by an e x p e r t A d v i s o r y
Committee.
51.
The n a t i o n a l s c h e m e w i l l i n t e g r a t e t h e r e n t
s u b s i d i e s g i v e n t o t e n a n t s i n work a n d t e n a n t s
receiving Supplementary Benefit.
A t e n a n t whose
income i s low b e c a u s e h e i s n o t i n w o r k n e e d s t h e
same r e n t s u b s i d y a s a t e n a n t who o b t a i n s t h e same
income from h i s e a r n i n g s .
In the Government s view,
t h e l o c a l h o u s i n g a u t h o r i t y h a s no l e s s d u t y t o h e l p
a t e n a n t w i t h h i s h o u s i n g c o s t s when h e f a l l s s i c k ,
b e c o m e s u n e m p l o y e d o r r e t i r e s t h a n when h i s e a r n i n g s
are low.
Each a u t h o r i t y ' s r e b a t e and a l l o w a n c e
s c h e m e w i l l t h e r e f o r e c o v e r a l s o t h o s e t e n a n t s who
receive Supplementary Benefit.
But, under
arrangements agreed with the local a u t h o r i t y
a s s o c i a t i o n s such t e n a n t s w i l l have t o apply f o r h e l p
only t o t h e Supplementary B e n e f i t s Commission.
The
C o m m i s s i o n w i l l t h e n i n f o r m t h e l o c a l a u t h o r i t y who
w i l l g r a n t t h e a p p r o p r i a t e r e b a t e or a l l o w a n c e , and
any r e m a i n i n g r e n t w i l l be t a k e n i n t o a c c o u n t i n
c a l c u l a t i n g Supplementary Benefit.
r
52.
R e n t a l l o w a n c e w i l l be p a i d t o t h e t e n a n t
except in the special circumstances described in
p a r a g r a p h 7 of Appendix 2 .
I t will not enable the
l a n d l o r d t o o b t a i n more t h a n t h e f a i r r e n t .
The
l o c a l a u t h o r i t y w i l l pay the a l l o w a n c e only i f t h e
r e n t of t h e t e n a n c y i s t h e c o n t r o l l e d o r r e g i s t e r e d
f a i r r e n t , or if i t is s a t i s f i e d t h a t the r e n t towards
which the allowance i s payable does n o t exceed the
fair rent.
I f i t i s n o t s o s a t i s f i e d , i t w i l l be a b l e
t o h e l p t h e t e n a n t by g r a n t i n g h i m a n i n t e r i m
a l l o w a n c e , u n t i l the f a i r r e n t i s r e g i s t e r e d , which
w i l l b e b a s e d on i t s own a s s e s s m e n t o f a r e a s o n a b l e
r e n t . The a l l o w a n c e w i l l be b a s e d on o n l y a p r o p o r t i o n
o f t h e f a i r r e n t i f t h e d w e l l i n g i s much l a r g e r t h a n
t h e t e n a n t r e q u i r e s o r i s s i t u a t e d i n an a r e a of h i g h
p r o p e r t y v a l u e s where t h e t e n a n t i s l i v i n g from c h o i c e
rather than fromnecessity.
22L
53
A r e b a t e r e d u c e s t h e r e n t income o b t a i n a b l e
by t h e l o c a l a u t h o r i t y a n d t h i s r e d u c t i o n may l e a d
to a d e f i c i t i n t h e H o u s i n g R e v e n u e A c c o u n t .
Such
a d e f i c i t c o u l d be met o n l y from t h e E x c h e q u e r o r
the r a t e s .
The G o v e r n m e n t c o n s i d e r s t h a t a 1 0 0 $
E x c h e q u e r s u b s i d y f o r r e b a t e s w o u l d be w r o n g i n
p r i n c i p l e , c a l l in q u e s t i o n the f i n a n c i a l
i n d e p e n d e n c e of l o c a l h o u s i n g a u t h o r i t i e s , and f a i l
to r e f l e c t t h e i r r e s p o n s i b i l i t i e s .
10$ of the
d e f i c i t i n 1972/73 r i s i n g to 25$ i n 1975/76 and
s u b s e q u e n t l y , and t h e c o s t of a d m i n i s t e r i n g the
r e n t r e b a t e s c h e m e , w i l l t h e r e f o r e f a l l t o be m e t
from t h e r a t e s on t h e b a s i s d e s c r i b e d i n p a r a g r a p h s
8 and 9 of Appendix 3 .
u
54.
The G o v e r n m e n t a l s o c o n s i d e r s i t r i g h t i n
p r i n c i p l e f o r the l o c a l a u t h o r i t i e s to meet p a r t
of the c o s t of r e n t a l l o w a n c e s .
But the c o s t of
rent allowances is uncertain.
I t s i n c i d e n c e on
p a r t i c u l a r a u t h o r i t i e s c a n n o t be p r e d i c t e d , a n d t h e
e x p e n s e s of a d m i n i s t r a t i o n a r e l i k e l y to e x c e e d
t h o s e of a d m i n i s t e r i n g r e n t r e b a t e s .
The
Government i s t h e r e f o r e p r e p a r e d to meet t h e whole
amount of the s t a t u t o r y r e n t a l l o w a n c e s p a i d i n the
y e a r s 1972/73 to 1975/76 and to meet a t l e a s t 80$
of t h i s amount t h e r e a f t e r on the b a s i s d e s c r i b e d
i n p a r a g r a p h 13 o f A p p e n d i x 3 .
55.
The m a j o r i t y o f t e n a n t s who now r e c e i v e a
r e n t r e b a t e w i l l r e c e i v e a l a r g e r r e b a t e u n d e r the
n a t i o n a l scheme t h a n t h e y d a t o d a y u n d e r t h e i r
a u t h o r i t y s e x i s t i n g scheme.
Special arrangements
w i l l be made t o a v o i d h a r d s h i p f o r a n y t e n a n t
a l r e a d y e n j o y i n g a r e b a t e who w o u l d o t h e r w i s e h a v e
t o p a y s u b s t a n t i a l l y more r e n t when t h e new
system i s i n t r o d u c e d .
f
-23­
AREAS IN NEED
Slum
Clearance
56.
The m a i n f i n a n c i a l o b s t a c l e t o s l u m c l e a r a n c e
is t h a t cleared land is often worth l e s s than i t
c o s t s t o a c q u i r e and c l e a r .
Under t h e p r e s e n t s y s t e m ,
l o c a l a u t h o r i t i e s can m i t i g a t e t h i s l o s s by
r e d e v e l o p i n g t h e l a n d w i t h t h e i r own h o u s i n g .
The
land and c l e a r a n c e c o s t i s t h e n charged t o the
Housing Revenue Account and t h e l o s s i s o f f l o a d e d
l a r g e l y on t o ' t h e t e n a n t s a n d t h e E x c h e q u e r .
But a
growing number of a u t h o r i t i e s w i t h slums t o c l e a r
do n o t n e e d t h e c l e a r e d l a n d f o r c o u n c i l h o u s i n g a n d
want t o use i t f o r o t h e r p u r p o s e s , i n c l u d i n g
redevelopment f o r owner.occupation, commercial
purposes" or as p u b l i c open s p a c e .
57.
The G o v e r n m e n t p r o p o s e s a new Slum C l e a r a n c e
Subsidy.
The d e t a i l s a r e s e t o u t i n p a r a g r a p h s 14 &
15 of A p p e n d i x 3 .
T h i s w i l l p r o v i d e f o r slum
c l e a r a n c e o p e r a t i o n s t o be f i n a n c e d s e p a r a t e l y .
It
will meet, for a t l e a s t the f i r s t f i f t e e n y e a r s ,
7 5 $ of t h e l o s s t o t h e g e n e r a l r a t e f u n d i n c u r r e d
t h r o u g h s l u m c l e a r a n c e w h a t e v e r t h e u s e c h o s e n by t h e
authority for the cleared land.
I t w i l l enable the
a u t h o r i t y , a t no c o s t t o i t s t e n a n t s and moderate
expense t o i t s r a t e p a y e r s , t o a c c e l e r a t e slum
c l e a r a n c e and put the c l e a r e d land t o the use b e s t
suited to local needs.
58.
No l o c a l a u t h o r i t y ' n e e d d e f e r s l u m c l e a r a n c e i n
o r d e r t o o b t a i n t h e Slum C l e a r a n c e S u b s i d y .
The new
s u b s i d y w i l l b e p a y a b l e t o w a r d s l o s s e s a r i s i n g from
slum c l e a r a n c e f o r a n y y e a r from 1 9 7 1 / 2 o n w a r d s . . I t
w i l l a l s o ' c o v e r e x p e n d i t u r e on l a n d a c q u i r e d f o r
s l u m c l e a r a n c e a f t e r 31 M a r c h 1 9 6 8 i f t h i s h a d n o t
been p u t t o a n o t h e r u s e by t h e b e g i n n i n g of 1 9 7 1 / 2 .
New B u i l d i n g
59.
N o t o n l y m u s t t h e s l u m s be c l e a r e d b u t
o v e r c r o w d i n g must be r e l i e v e d , e s p e c i a l l y i n
great conurbations.
The G o v e r n m e n t p r o p o s e s
redeploy s u b s i d i e s to achieve t h i s end.
-24­
the
to
60.
Once t h e f u l l f a i r r e n t i s p a y a b l e f o r a l l
c o u n c i l d w e l l i n g s t h e r e i s l i k e l y t o be a s u r p l u s
i n t h e H o u s i n g Revenue Account of t h o s e a u t h o r i t i e s
who b u i l t u p t h e i r h o u s i n g s t o c k i n e a r l i e r y e a r s .
Such a u t h o r i t i e s w i l l n e e d no E x c h e q u e r or r a t e
subsidy for t h a t Account.
But a u t h o r i t i e s w i t h
h i s t o r i c a l l y h i g h c o s t s and c o n t i n u i n g b u i l d i n g
programmes w i l l h a v e a d e f i c i t .
61.
The e x i s t i n g h o u s i n g s u b s i d i e s t o l o c a l
a u t h o r i t i e s a r e geared to a system in which the s t a t e
of t h e a u t h o r i t y ' s h o u s i n g a c c o u n t d e t e r m i n e s t h e
l e v e l of r e n t s .
They a r e m a n i f e s t l y n o t s u i t e d t o a
system i n w h i c h t h e income from r e n t s d e t e r m i n e s t h e
s t a t e of t h e a c c o u n t .
If the account is in surplus,,
t h e y w i l l be u n n e c e s s a r y .
If i t is in d e f i c i t , they
w i l l n o t match t h a t d e f i c i t nor provide the a u t h o r i t y
with the resources for i t s building needs.
The
e x i s t i n g s u b s i d i e s m u s t , t h e r e f o r e , be r e p l a c e d by a
new s u b s i d y s t r u c t u r e a d a p t e d t o t h e new s y s t e m .
The
change t o t h i s s t r u c t u r e , l i k e t h e change t o f a i r
r e n t s , w i l l b e p h a s e d a n d t h e new s u b s i d i e s w i l l e a s e
the t r a n s i t i o n .
The d e t a i l s o f t h e p r o p o s a l s a r e '
s e t out i n Appendix 3 .
62.
In a r e a s of h o u s i n g s t r e s s t h e most powerful
i n s t r u m e n t f o r t h e p r o m o t i o n o f new b u i l d i n g w i l l b e
t h e p r o p o s e d new R i s i n g C o s t s S u b s i d y .
This i s
d e s c r i b e d i n p a r a g r a p h s 5 t o 7 of A p p e n d i x 3 .
It will
m e e t t h e b u l k o f t h e d e f i c i t i n c u r r e d when h o u s i n g
costs r i s e f a s t e r than r e n t income.
I t will thus
p l a y a key p a r t i n t h e r e l i e f of o v e r c r o w d i n g and t h e
r e h o u s i n g of t h o s e now l i v i n g i n s l u m s .
63.
Other s u b s i d i e s w i l l h e l p a u t h o r i t i e s with the
d e f i c i t s a r i s i n g during the
t r a n s i t i o n t o t h e new
system.
They a r e d e s c r i b e d i n d e t a i l i n A p p e n d i x 3 .
64.
The E x c h e q u e r w i l l r e l i e v e r a t e p a y e r s o f m o s t o f
any d e f i c i t s i n t h e Housing Revenue Account and
i n i t i a l l y of t h e w h o l e c o s t o f r e n t a l l o w a n c e s .
The
Government, t h e r e f o r e , c o n s i d e r s t h a t t h e Exchequer
should share in any s u r p l u s a r i s i n g in t h a t a c c o u n t .
The a r r a n g e m e n t s f o r s h a r i n g t h e s u r p l u s a r e e x p l a i n e d
i n p a r a g r a p h 2 2 of A p p e n d i x 3 .
-25­
65.
The S e c r e t a r i e s o f S t a t e w i l l a l s o r e v i e w t h e
o p e r a t i o n o f t h e new s y s t e m i n (Consultation w i t h t h e
l o c a l a u t h o r i t y a s s o c i a t i o n s t o w a r d s t h e e n d of i t s
f i r s t 10 y e a r s .
They w i l l t h e n m a k e , b y O r d e r ,
a p p r o p r i a t e a d j u s t m e n t s f o r t h e y e a r s following t h i s
p e r i o d w i t h i n t h e r a n g e of a d j u s t m e n t s p e r m i t t e d by
the Act.
T h i s i s e x p l a i n e d m o r e fully i n
p a r a g r a p h 23 of Appendix 3 .
The E f f e c t
o f t h e New
Subsidies
66.
U n d e r t h e new s y s t e m t o t a l E x c h e q u e r s u b s i d i e s
f o r h o u s i n g i n E n g l a n d a n d W a l e s , . i n s t e a d of
growing
r a p i d l y , w i l l remain a t about t h e i r p r e s e n t l e v e l
(at current p r i c e s ) .
The n a t i o n a l t o t a l of r a t e ­
fund c o n t r i b u t i o n s t o H o u s i n g Revenue A c c o u n t s w i l l
p r o g r e s s i v e l y f a l l below i t s p r e s e n t l e v e l and t h e
b u r d e n of r a t e f u n d c o n t r i b u t i o n s w i l l b e m o r e e v e n l y
spread.
I t i s true t h a t in the t r a n s i t i o n period
.iiost a u t h o r i t i e s n o t now m a k i n g a r a t e f u n d
c o n t r i b u t i o n w i l l make o n e u n t i l t h e i r H o u s i n g R e v e n u e
A c c o u n t moves i n t o s u r p l u s .
But a u t h o r i t i e s w i t h
s e v e r e h o u s i n g p r o b l e m s w i l l make s m a l l e r c o n t r i b u t i o n s
i n t h e c o u r s e of s o l v i n g t h e s e p r o b l e m s i n t h e l o n g e r
t e r m - t h a n t h e y w o u l d h a v e made u n d e r t h e p r e s e n t
system.
Those w i t h t h e w o r s t problems w i l l be a b l e t o
r e d u c e t h e i r c o n t r i b u t i o n a s s o o n a s t h e new s y s t e m
is introduced.
67.
The new s u b s i d i e s w i l l n o t be c o n f i n e d t o new
building.
They w i l l m e e t t h e m a j o r p a r t of d e f i c i t s
c a u s e d by a l l t h e h o u s i n g a c t i v i t i e s of a l o c a l
a u t h o r i t y , i n c l u d i n g r e p a i r s , management and t h e
r e f i n a n c i n g of m a t u r i n g d e b t s .
68.
T h i s s u b s i d y s t r u c t u r e w i l l g i v e a new d e a l t o
t h o s e l o c a l a u t h o r i t i e s whose n e e d s a r e g r e a t e s t , ,
THE VOLUNTARY HOUSING "MOVEMENT
69.
The v o l u n t a r y h o u s i n g m o v e m e n t h o l d s a s p e c i a l
place in the Government's housing p o l i c i e s .
It
makes a d i s t i n c t i v e c o n t r i b u t i o n t o m e e t i n g p e o p l e ' s
housing needs.
I t c a n r e l y on t h e G o v e r n m e n t ' s
continued encouragement and s u p p o r t .
-26­
70.
Go-ownership s o c i e t i e s have j u s t i f i e d the hopes
of t h e G o v e r n m e n t w h i c h l a u n c h e d them i n 1 9 6 1 a n d
1964.
They a r e a b l e t o m e e t t h e
demand f o r
c o - o w n e r s h i p w i t h t h e h e l p of t h e o p t i o n m o r t g a g e
subsidy a v a i l a b l e t o t h e i r members.
The G o v e r n m e n t
will maintain the present arrangements governing
t h i s form of t e n u r e w h i c h i n c r e a s e s t h e r a n g e of
housing choice.
71.
Under t h e G o v e r n m e n t ' s p r o p o s a l s h o u s i n g
a s s o c i a t i o n s and s o c i e t i e s which provide r e n t e d
a c c o m m o d a t i o n w i l l b e b r o u g h t w i t h i n t h e a m b i t of
the f a i r r e n t p r i n c i p l e and t h e n a t i o n a l r e n t r e b a t e
scheme.
F o r t h e i r f u t u r e schemes t h e r e n t w i l l be
limited to the f a i r rent.Like p r i v a t e landlords
t h e y w i l l be a b l e t o have a f a i r r e n t r e g i s t e r e d f o r
all their dwellings.
T h e y w i l l be a b l e t o r a i s e
the weekly r e n t s of e x i s t i n g d w e l l i n g s t o the f a i r
r e n t by a n n u a l s t e p s n o t e x c e e d i n g 75p a n d b e g i n n i n g
n o t e a r l i e r t h a n J a n u a r y 1 9 7 3 - when t h e i r t e n a n t s
w i l l become e l i g i b l e f o r r e n t a l l o w a n c e s u n d e r t h e
local a u t h o r i t y ' s r e n t allowance scheme.
.'
7 2 . T h e s e m e a s u r e s w i l l s e c u r e f o r many h o u s i n g
a s s o c i a t i o n s a g r e a t l y i n c r e a s e d r e n t income w i t h o u t
h a r d s h i p t o t h o s e of t h e i r t e n a n t s who c a n n o t a f f o r d
the r e n t i n c r e a s e s involved.
Those a s s o c i a t i o n s which
have a l r e a d y b u i l t up a s t o c k of a c c o m m o d a t i o n t o
r e n t w i l l t h u s be a b l e t o a c c u m u l a t e t h e f u n d s n e e d e d
t o s u p p o r t f u r t h e r new b u i l d i n g o r c o n v e r s i o n a n d
improvement w i t h t h e h e l p of E x c h e q u e r s u b s i d i e s .
The e x i s t i n g E x c h e q u e r c o n t r i b u t i o n s f o r a c q u i s i t i o n ,
c o n v e r s i o n and improvement w i l l c o n t i n u e , and t h e i r
a d e q u a c y w i l l be k e p t u n d e r r e v i e w .
73.
The G o v e r n m e n t p r o p o s e s t h a t s u b s i d i e s p a i d i n
t h e p a s t f o r new b u i l d i n g s h o u l d be w i t h d r a w n f r o m
h o u s i n g a s s o c i a t i o n s on a b a s i s s i m i l a r t o t h a t w h i c h
will apply to local a u t h o r i t i e s .
The w i t h d r a w a l w i l l
be t i m e d t o t a k e a c c o u n t o f t h e r a t e a t w h i c h
a s s o c i a t i o n s can i n c r e a s e t h e i r r e n t s to the
r e g i s t e r e d f a i r r e n t a n d of t h e e x t e n t t o w h i c h t h e i r
r e n t s a r e a l r e a d y a t or above the f a i r r e n t l e v e l .
-27­
74.
To s t i m u l a t e f u r t h e r new b u i l d i n g t h e G o v e r n m e n t
proposes a subsidy r e l a t e d to the i n i t i a l d e f i c i t
oved. a r i s i n g o n / s c h e m e s b u i l t f o r r e n t ( o t h e r . t h a n b y a n
i n d u s t r i a l h o u s i n g a s s o c i a t i o n ) w h e r e t h e income from
f a i r r e n t s , w h i c h w i l l be g u a r a n t e e d b y v i r t u e o f t h e
r e n t allowances a v a i l a b l e , does not cover the i n i t i a l
e x p e n d i t u r e on l o a n c h a r g e s , r e p a i r s a n d m a n a g e m e n t .
75.' The G o v e r n m e n t c o n s i d e r s t h a t t h e o b j e c t i o n s t o a
100$ d e f i c i t s u b s i d y f o r l o c a l a u t h o r i t i e s a p p l y a l s o
to h o u s i n g a s s o c i a t i o n s .
Moreover the s u b s i d y
s h o u l d n o t e n c o u r a g e t h e f u r t h e r f r a g m e n t a t i o n of t h e
v o l u n t a r y h o u s i n g movement.
I t i s in the movement's
b e s t i n t e r e s t t h a t i t s m e m b e r s s h o u l d be f i n a n c i a l l y
s t r o n g a n d e n g a g e on t h e m a j o r e n t e r p r i s e o f new
b u i l d i n g o n l y f r o m a s o u n d f i n a n c i a l b a s e s e c u r e d by
c h a r i t a b l e m o n i e s o r s u r p l u s e s from p r o p e r t i e s
a l r e a d y owned.
76.
The new d e f i c i t s u b s i d y w i l l r u n f o r t e n y e a r s ,
b e g i n n i n g w i t h t h e y e a r i n which t h e scheme i s
c o m p l e t e d , a n d w i l l be r e d u c e d by s t a g e s t o c o i n c i d e
with the t r i e n n i a l review of f a i r r e n t s .
For the
f i r s t t h r e e y e a r s t h e s u b s i d y w i l l m e e t 9 0 $ of t h e
d e f i c i t a r i s i n g i n the y e a r of c o m p l e t i o n .
For the
second t h r e e y e a r s t h e s u b s i d y w i l l meet 60$ of t h a t
d e f i c i t , f o r t h e t h i r d t h r e e y e a r s 30$ and f o r t h e
l a s t year 10$.
Many l o c a l a u t h o r i t i e s may w i s h , a s
some a l r e a d y d o , t o s u p p o r t h o u s i n g a s s o c i a t i o n s w i t h
c o n t r i b u t i o n s from t h e r a t e s .
- ­
77.
T h e r e may e x c e p t i o n a l l y be s c h e m e s w h e r e , o w i n g
to unforeseen d i f f i c u l t i e s , t h e r e i s a d e f i c i t , not
met by s u b s i d y w h i c h c a n n o t i n t h e e v e n t b e c o v e r e d .
by r e n t i n c o m e a n d r e s e r v e s .
In such cases the l o c a l
a u t h o r i t y o r t h e H o u s i n g C o r p o r a t i o n may be r e a d y t o
a l l o w r e p a y m e n t s o f p r i n c i p a l a n d i n t e r e s t t o be
d e f e r r e d a n d i n t e r e s t t o be c a p i t a l i s e d .
Where t h i s
measure i s i n a d e q u a t e or i n a p p r o p r i a t e , the S e c r e t a r y
of S t a t e w i l l h a v e p o w e r t o d e f e r r e d u c i n g t h e
s u b s i d y on t h e b a s i s s e t o u t i n t h e p r e c e d i n g
p a r a g r a p h , i f t h e a s s o c i a t i o n can s a t i s f y him t h a t
its total financial position justifies special
treatment.
-28­
78.
At p r e s e n t h o u s i n g a s s o c i a t i o n s w i s h i n g t o b u i l d
w i t h t h e h e l p of s u b s i d y c a n n o t b o r r o w from t h e
Housing C o r p o r a t i o n .
Instead they normally obtain a
l o a n from t h e l o c a l a u t h o r i t y .
In f u t u r e , they can
c o n t i n u e t o b o r r o w from t h e l o c a l a u t h o r i t y p r o v i d e d
the a u t h o r i t y has the r i g h t t o nominate not l e s s than
50$ of t h e t e n a n t s of
t h e d w e l l i n g s t o be b u i l t .
Otherwise t h e a s s o c i a t i o n w i l l be f r e e t o a p p r o a c h
t h e C o r p o r a t i o n f o r l o a n f i n a n c e f o r new b u i l d i n g
s c h e m e s from t h e H o u s i n g C o r p o r a t i o n .
The G o v e r n m e n t
is d i s c u s s i n g with the b u i l d i n g s o c i e t i e s the
p o s s i b i l i t y of e n l a r g i n g t h e i r powers so a s t o e n a b l e
them t o l e n d d i r e c t t o t h e H o u s i n g C o r p o r a t i o n .
The
G o v e r n m e n t h o p e s t h a t b u i l d i n g s o c i e t i e s w i l l be
w i l l i n g t o u s e such powers and t h u s g i v e t h e
v o l u n t a r y h o u s i n g movement m o r e a c c e s s t o p r i v a t e
savings,,
79.
These m e a s u r e s w i l l be a d a p t e d a s n e c e s s a r y f o r
t h o s e h o u s i n g a s s o c i a t i o n s and s o c i e t i e s which a r e
c h a r i t i e s , i n c l u d i n g almshouse c h a r i t i e s which cannot
charge a r e n t but normally o b t a i n a c o n t r i b u t i o n
from t h e o c c u p a n t s of t h e i r d w e l l i n g s .
Special
a r r a n g e m e n t s w i l l a l s o be made f o r t h e N o r t h E a s t e r n
Housing A s s o c i a t i o n .
A p p r o p r i a t e a r r a n g e m e n t s w i l l be
made f o r s c h e m e s a p p r o v e d f o r s u b s i d y , b u t n o t
c o m p l e t e d , b e f o r e t h e I n t r o d u c t i o n o f t h e new s y s t e m .
80.
The G o v e r n m e n t i s a l s o c o n s i d e r i n g o t h e r a s p e c t s
of t h e v o l u n t a r y h o u s i n g m o v e m e n t i n t h e l i g h t o f a
r e p o r t b a s e d on t h e e v i d e n c e p r e s e n t e d t o a
s u b - c o m m i t t e e of t h e C e n t r a l H o u s i n g A d v i s o r y
Committee s e t up i n F e b r u a r y 1 9 6 8 .
Further changes
may be n e c e s s a r y t o . c o n s o l i d a t e a n d s t r e a m l i n e t h e
movement i f i t i s t o r e a l i s e i t s f u l l p o t e n t i a l i n a
reformed s y s t e m of h o u s i n g f i n a n c e
0
-29­
NEW AND EXPANDING TOWNS
81.
The r e f o r m s d e s c r i b e d i n t h i s W h i t e P a p e r which a f f e c t l o c a l h o u s i n g a u t h o r i t i e s and t h e i r t e n a n t s w i l l g e n e r a l l y a p p l y t o new town development c o r p o r a t i o n s , the Commission f o r the New Towns a n d t h e i r t e n a n t s .
The d e t a i l s a n d p r o v i s i o n s i n v o l v e d a r e e x p l a i n e d i n p a r a g r a p h 33 of A p p e n d i x 3 . 82
The l o c a l a u t h o r i t i e s w i l l h a v e t h e same
r e s p o n s i b i l i t y to pay r e n t a l l o w a n c e s to t e n a n t s
of p r i v a t e l a n d l o r d s a n d h o u s i n g a s s o c i a t i o n s
w i t h i n the a r e a c o v e r e d by the d e v e l o p m e n t
c o r p o r a t i o n s a n d t h e C o m m i s s i o n f o r t h e New Towns
a s they have f o r o t h e r p r i v a t e t e n a n t s .
c
83.
The new s u b s i d y s y s t e m w i l l a l s o h e l p t o
m a i n t a i n t h e momentum of o v e r s p i l l s c h e m e s , a n d s o
a m e l o r i a t e t h e h o u s i n g p r o b l e m s of o u r c o n u r b a t i o n s ,
The a r r a n g e m e n t s f o r e x p a n d i n g t o w n s a r e s e t o u t i n
p a r a g r a p h s 2 a n d 12 o f A p p e n d i x 3 .
CONCLUSION
84.
P r e s e n t housing p o l i c i e s w i l l not cure the
slums, the o v e r c r o w d i n g , the d i l a p i d a t i o n s o r the
i n d i v i d u a l h a r d s h i p s a n d i n j u s t i c e s u f f e r e d by
many t e n a n t s , l a n d l o r d s a n d o w n e r o c c u p i e r s .
T h i s i s b e c a u s e t h e y f a i l to
concentrate resources
to h e l p p e o p l e and a r e a s i n n e e d .
The c u r e c a n
o n l y come t h r o u g h a r a d i c a l r e f o r m o f h o u s i n g
finance.
85.
The p r o p o s a l s d e s c r i b e d i n t h i s W h i t e P a p e r
w i l l s w e e p away a f i n a n c i a l s t r u c t u r e w h i c h h a s
been assembled piecemeal in r e s p o n s e to h o u s i n g
p o l i c i e s pursued w i t h varying d e t e r m i n a t i o n and
c o n s i s t e n c y o v e r the l a s t h a l f c e n t u r y .
These
p r o p o s a l s w i l l a l s o g i v e the g r e a t e s t h e l p to a r e a s
of g r e a t e s t n e e d .
S u b s i d i e s w i l l be c o n c e n t r a t e d
on t h e s e a r e a s w h e r e t h e y w i l l s t i m u l a t e t h e
c l e a r a n c e o f s l u m s , t h e b u i l d i n g o f new h o u s e s
a n d t h e i m p r o v e m e n t o f e x i s t i n g h o u s e s a n d so
r e l i e v e o v e r c r o w d i n g , bad c o n d i t i o n s and h o u s i n g
stress^
-30­
(CONRDEJfEAL) 86.
The reformed s y s t e m i s g e a r e d t o m e e t t h e
c i r c u m s t a n c e s of t h e i n d i v i d u a l .
It treats
housing as a personal service.
Tenant householders
w i l l "be h e l p e d i n a c c o r d a n c e w i t h a d i s c r i m i n a t i n g
a s s e s s m e n t of t h e i r n e e d s .
T h o s e who w i s h t o own'
t h e i r own home w i l l "be h e l p e d t o do s o i n e v e r y
p r a c t i c a b l e way.
These r e f o r m s a r e b a s e d on the
p r i n c i p l e of f a i r n e s s .
They w i l l e s t a b l i s h a f a i r
b a l a n c e b e t w e e n owner o c c u p i e r s and t e n a n t s and'
p a r i t y of t r e a t m e n t f o r c o u n c i l t e n a n t s and p r i v a t e
tenants.
They w i l l do j u s t i c e b e t w e e n l a n d l o r d
and t e n a n t .
They w i l l h a v e due r e g a r d t o t h e
r e a s o n a b l e c l a i m s of t h e c i t i z e n a s a t a x p a y e r a n d
a s a r a t e p a y e r , w i t h o u t p l a c i n g on e i t h e r . t h e
i n f l a t i o n a r y b u r d e n of u n n e c e s s a r y t a x e s .
87.
Taken t o g e t h e r they p r o v i d e a f a i r d e a l i n
h o u s i n g with i n c r e a s e d h e l p f o r a r e a s and people
need.
-31­
in
APPENDIX I PROPOSED FORMULA FOR THE TRANSITION TO FAIR RENTS I,
For the purpose of rent increases made in
1 9 ^ 2 / 3
and subsequent financial years, a "qualifying dwelling" is a dwelling in the Housing Revenue Account
of the local authority whose current rent is below the fair rent for that dwelling as confirmed or altered by the Rent Assessment Committee or a dwelling for which a f a i r rent has not yet been so confirmed or altered. 2.
If the local authority has made a general rent increase between 1 April 1 9 7 2
and 3 0
it will be required to make on September 1 9 7 2 ,
only such a further general rent increase (if any) as is 1 October 1 9 7 2
needed (a)
to s*ecure an average increase in rent income for
£26
(b)
per qualifying dwelling;
and,
1 9 7 2 / 7 3
of
if the earlier increase averaged less than 5 0 p
a week per qualifying dwelling, to bring the sum of the averages of the a week per qualifying dwelling. two increases to 7 5 p
3.
If the local authority has made no general rent increase between 1 April 1 9 7 2
and 3 0
between 1 October 1 9 7 1
and 3 1
March 1 9 7 2 ,
it will be required to by whichever is the greater of increase rents on 1 October 1 9 7 2
(a)
but has made such an increase September 1 9 7 2 ,
the amount which, together with the previous increase, secures an average increase in rent income of £ 2 6
per qualifying dwelling for the period between the date of the previous increase and
(b)
3 1
March
an average of 5 0 p
1 9 7 3
s
and
a week per qualifying dwelling, provided that (c)
if the average of the previous increase was less than 2 5 p
week per qualifying dwelling the average increase on 1.
a
( C O N FIDE NTIAIT)
/
M
1
O c t o b e r
1 9 7 ^
plus
deficiency.
If t h e
I October
that
local
1971
and
In
and
required
to
dwelling o n
( a )
make
the
if
a
1972
of
rent
than
Fnade n o
1972
years,
increase
it w i l l
was
no
qualifying
be
rent
the
local
5 0 p
increase
required
for every
averaging
dwelling
between
to
make
qualifying
per
rent
dwelling.
authority w i l l
a week
a
be
qualifying
dates:
a general
per
general
£ 1 a week
was
5 0 p
has
subsequent
following
there
less
3 0 September
1 October
1 9 7 3 / 4
not
authority
increase o n
5,
is
rent
increase
on
1 October
1 9 7 2 ,
in
October; ( b )
if
a
( c )
there
general
rent
in
the
if
there
no
general
but
1971
if
month
was
general
increase
which
no
general rent
rent
that
increase
3 1 March
a
2 . in
on
1 April
increase
April. 1 October
and
made;
1 October
and
1 9 7 2 ,
3 0 September
increase was
increase
rent
on
1 April
general
between
general
1 9 7 2 ,
increase
between
in
there was
and
rent
1
1972,
1972,
3 0 September
between
but
and
1972,
October APPENDIX
2
THE PROPOSED NATIONAL RENT REBATE SCHEME SCOPE OF THE SCHEME 1,
The local housing authority' s rebate scheme will apply to tenants of unfurnished dwellings in the Housing Revenue Account, except for service tenants.
(The authority will have discretion to apply its scheme to tenants of its unfurnished dwellings in other accounts.) 1
The authority s rent allowance scheme will apply to tenants of protected
or statutory tenancies under the Rent Act 1 9 6 8
(except for tenants of service tenancies and premises with a business u s e ) , and to tenants of housing associations, in the authority's area. CALCULATION OF REBATES AND ALLOWANCES 2.
The model provisions prescribed by the Secretary of State for calculating any rebate or allowance are expected to be initially as follows (all calculations will be made on a weekly basis):­
( 1 )
NEEDS ALLOWANCE The authority will calculate a needs allowance, to take account of the basic needs of the tenant and the other members of his family living in the dwelling, as follows:-^­
Single tenant £ 9 . 5 0 Tenant and spouse £ 1 3 . 5 0 Each dependent child of the tenant or spouse..
£ 2 . 5 0
For a blind tenant or spouse the needs allowance will be increased by £ 1 . 2 5
if one of them is blind and by
( 2 )
£ 2 . 0 0
if both are blind. TENANT'S INCOME For the purpose of calculati ng the amount of any rebate or allowance the "tenant s income" will be the average weekly 1
gross income of the tenant and his spouse (plus 0 . 1 %
uninvested capital over
£ 3 0 0 )
amounts will be disregarded:­
1.
of any except that the following (a) any payment made to the tenant in respect of rent by another member of his household and by any sub-tenant; (b) the first
(c)
£ 2 . 5 0
the first £ 2
of the earnings of the tenant's wife; of any pension or payment made for disablement to the tenant or his spouse; (d)
the first £ 2
of any excess of war/industrial
injuries widows' pension over national insurance widow's pension payable to the tenant or his spouse; (e)
the first £ 1
of any voluntary or charitable payments to the tenant or his spouse excluding voluntary payments for maintenance or any payment under (a) above provided that the total reduction under (c) - ( e ) does not exceed
(f)
£2; any attendance or constant attendance allowance, any maternity or death grants, or any sums payable as holder of the Victoria or George Cross paid to the tenant or his spouse. (3) MINIMUM RENT Subject to the exception below, a part of the rent (the "minimum rent") will not be met by a rebate or allowance. The minimum rent will be 4 0 %
£1.00
of the rent of the dwelling or whichever is higher, except if the tenant is in work (or out of work and subject to the "wage-stop") and his income is less than his needs allowance.
In that case the minimum rent as calculated above will be reduced by 25% of the difference between his needs allowance and his income. 2 . If
the
general
is
exceptionally
empowered
an
and
allowance
any
rents
in
a
local
authority
the
Secretary
of
State
authorise
the
authority
to
provide
scheme
for
allowance
of
high,
provision
provision
or
to
level
the
for
so
a minimum
authorised
purpose
subsidies
of
rent
will
of
count
calculating
referred
to
in
will
less
as
the
be
in
rent
paragraphs
its
than
the
area
rebate
4 0 $ ;
model
rebate
8 and 1 3
of A p p e n d i x 3 . ( 4 ) REBATE
OR
If
tenant
the
allowance,
the
sum
ALLOWANCE
the
equal
s
income
amount
to
the
equals,
of
the
is
rebate
difference
3 . or
less
or
between
than,
allowance
the
rent
needs
is
to
of
the
his
be
dwelling and any minimum rent, subject to ( 5 ) ,
below.
(6)
(7) and
If the tenant's income exceeds his needs allowance the minimum rent will be increased by 1 7 %
of the excess. If the resultant amount is less than the rent of the dwelling, he will receive a rebate or allowance equal to the deficiency, subject to ( 5 ) ,
( 5 )
(6)
and ( 7 )
below.
MINIMUM REBATE OR ALLOWANCE
There will be no rebate or allowance if the entitlement is
less than
20p. (6) MAXIMUM REBATE OR ALLOWANCE There will be a maximum rebate or allowance of
London, and £8 in London.
£ 6 . 5 0
outside
(The authority may be authorised to increase this maximum, if a lower minimum rent is. authorised under paragraph 2 ( 3 )
( 7 )
above,)
REDUCTION FOR NON-DEPENDENTS The rebate or allowance will be reduced for the following non-dependents living in the dwelling occupied by the tenant by the following amounts:­
(a)
For each non-dependent aged 18 years or more and not undergoing full-time education or training: £ 1
. 5 0
£ 1
. 0 0
(b) For each non-dependent of pensionable age and not in receipt of Supplementary Benefit: (except that where two such non-dependents are husband and wife the combined total for both will be: £ 1 . 5 0 ) (c) For each non-dependent receiving Supplementary Benefit (for this purpose the recipient and his dependents will count as one non-dependent): 6 5 P ( 8 )
SPECIAL CIRCUMSTANCES
The authority will have discretion to grant a special rebate o
ri I I owaneo if the p c r s o n n l
circumstances- of the tenant are
exceptional (eg to deal with special cases of hardship not
covered by (I) - ( 7 )
above).
The authority will also have
discreLion Lo treat as the tenant, for the purpose of
calculating any rebate or allowance, another adult in the
household if he is the principal earner.
Some examples of the effect of this method of calculating rebates and
allowances are given in paragraph 12 of this Appendix.
PUBLICITY FOR THE REBATE AND ALLOWANCE SCHEMES
Before its rebate scheme comes into force the local authority will
inform its tenants in writing of the circumstances in which a tenant
would be likely to be granted a rebate, the procedure for applying and
the details to be provided in an application.
It will give similar
written information to its tenants once a year and in any case on a
first tenancy or when the scheme is changed or rents are increased.
The authority will also publish annually similar information about its
rent allowance scheme in the local newspapers and will make available
this information in written form to any private tenant or landlord who
requests it.
Private landlords will be required to insert this
information, within 4 weeks, in any rent book issued on or after
I January
1973.
PROCEDURE FOR OBTAINING REBATES OR ALLOWANCES
The procedure for obtaining a rent rebate or allowance will be broadly
as follows.
The tenant will apply to the local authority for a rebate
or allowance, unless he is receiving or eligible for Supplementary
Benefit (see paragraph 9 below), and will furnish such information as
will enable the authority to calculate the amount of any rebate or
allowance in accordance with paragraph 2 above.
For the calculation
of the tenant's weekly income the authority will normally confine itself
5.
to ascertain! ng, and as necessary checking, the income of the tenant land his wife during the last 5 weeks (if they are paid weekly) or the
last 2 months (if they are paid monthly) preceding the application,
jut it will ascertain income over a different period if this is
appropriate eg in the case of employment subject to seasonal variations
or the self-employed.
15.
if
t
n
e
authority decides to grant a rebate or allowance in response
to an application, it will normally have effect from the date of the
application until 6 months ( 1 2 months in the case of pensioners) from
the date on which the tenant was notified of the decision.
Thereafter
the procedure in paragraph /, will be repeated for as long as the tenant
qualifies for a rebate or allowance under the authority's scheme.
6.
During any period for which a rebate or allowance has been granted,
it will be possible to alter (or, if appropriate, to terminate) the
rebate or allowance to take account of changes in the tenant's
circumstances, the rent of his dwelling or the authority's scheme.
7.
The local authority will be empowered to require evidence from any private tenant who has applied for, or is receiving, a rent allowance of the amount of rent which he is paying;
and to terminate the allowance, or to pay it to the landlord, if the tenant is failing to pay his rent regularly. 8.
The local authority will have discretion as to the method and frequency of paying rent allowances provided that these have regard to the reasonable needs and convenience of the tenant. 9.
Tenants receiving Supplementary Benefit will not have to apply to the local authority for a rent rebate or allowance.
For the first eight consecutive weeks benefit will be assessed on the basis of the rent currently paid by the tenant (after taking account of any rent allowance) and any rebate or allowance granted will continue.
6. From the beginning of the ninth consecutive week the local authority will grant automatically
a rebate or allowance equal to the difference between the rent of the dwelling and the minimum rent (less any reductions to be made for non­
dependents and subject to the maximum rebate or allowance) and the Supplementary Benefits Commission will reassess the tenant's benefit on the basis of that rebate or allowance.
While the tenant receives benefit the local authority will normally need to ask him for information only about the age and marital status of any non-dependents living in the same dwelling (and whether they are undergoing full-time education) and, for private tenants, whether the tenancy is protected or statutory. When the tenant ceases to receive benefit, he will be invited to make a fresh application for a rent rebate or allowance based on his new circumstances.
Special arrangements will be made for "wage-stop" cases. PAYMENTS TO THE DEPARTMENT OF HEALTH AND SOCIAL SECURITY 10. Under an agreement reached in 1970
between the Government and the local authority associations for England and Wales a local authority which operates a rent rebate scheme but excludes from the scheme tenants receiving Supplementary Benefit was recommended to pay to the Department of Health and Social Security a lump sum annually, calculated on an agreed formula, in respect of tenants so excluded.
Since existing legislation does not enable local authorities to make such a payment, they will be empowered to make one for
11.
1970/71
and
When a local authority's rebate or allowance
1971/72. scheme comes into force, or when those schemes are subsequently changed, or when the rents of council dwellings are increased, it may not be practicable for the local authority immediately to calculate the amount of any rebate or allowance for tenants in receipt of Supplementary Benefit for more than 8 consecutive weeks, or for the Department of Health and Social Security to reassess immediately the benefit payable towards the rent.
7. In that CISC
the
n u t h o r i t.y,
by
time b e i n g g r a n t a n y
will s u b s e q u e n t l y
or a l l o w a n c e s
12.
The
Tables
rebate
pay
thus
iigreomont
to
of
of this A p p e n d i x
the
is not w o r k i n g ,
his w i l e
and
any
there
case
no
Department,
will
or
existing
alter
a sum
in
an
respect
not
of
for
the
the
the
and
of
are
adults
8.
effect
of
allowances
the model
set
out
in
rebates
2
wife
paragraph
in w h i c h
the
dependent
children
of
the
tenant
tenant
and
his
other
than
the
provisions
households
tenants
and
one,
rebates
children
are
allowance,
illustrate
for the c a l c u l a t i o n
tho
Department
withheld.
below
in
the
or
with
or
wife. TABLE 1
WEEKLY REBATE OR ALLOWANCE WHERE RENT OP DWELLING IS £ 2 PER WEEK
INCOME
PER WEEK
SINGLE
PERSON
MAN & WIPE MAN, WIPE
& 1 CHILD
&
MAN, WIPE
2 CHILDREN
MAN, WIPE & 3 CHILDREN
£
£
P
£
P
£
P
£
P
£
P
8
1
37*
2
0
2
0
2
0
2
0
-
57*
1
37*
2
0
2
0
2
0
-
57*
1
o
1
62*
2
0
- 7ki
1
12
16
NIL
20
NIL
NIL
25
NIL
NIL
NIL
NIL
30
NIL
NIL
NIL
NIL
32
*
25
32
NIL
TABLE 2
WEEKLY REBATE OR ALLOWANCE WHERE RENT OF DWELLING IS £ 3 PER WEEK
INCOME
PER WSSK
SINGLE
PERSON
MAN, WIPE
MAN & WIPE & 1 CHILD
£
£
P
£
8
2
17*
3
0
12
1 37*
2
17*
16
-
1
-
69*
P
20
NIL
2
5
NIL
NIL
30
NIL
NJL
£
P
MAN, WIPE
& 2 CHILDREN
MAN, WIPE & 3 CHILDREN
£
P
£
P
0
3
0
3
o
2
80
3
0
3
0
37*
1
80
2
1+2*
3
0
69*
1
12
1
54*
2
05
-
27
69*
1
12
3
NIL
NIL
-
2
7
(CONFIDENTIAL) ft--
-
'
-
S i m
i m . . . . m . . ! - i r ^
-
r
— "
-r--ii—i-1-"-
-m-. ­
TABLE 3 WEEKLY REBATE OK ALLOWANCE WHERE RENT OF DWELLING IS £ 4 PER WEEK INCOME
PER WEEK
MAN, WIFE
SINGLE PERSON MAN & WIFE & 1 CHILD
£
£
P
£
P
8
2
77* 3
12
1
97*
16
1
20
-
MAN, WIFE
& 2 CHILDREN
MAN, WIFE & 3 CHILDREN
£
P
£
P
£
P
77*
k
0
4
o
4
o
2
77*
3
40
4
o
4
o
29*
1
97*
2
i+O
3
02*
3
65
61*
1
29*
1
72
2
14*
2
65
87
1
29*
1
72
25
NIL
30
NIL
44*
NIL
NIL
87
44*
TABLE 4
REBATE OR ALLOWANCE WHERE RENT OF DWELLING IS £ 5 PER WEEK
INCOME
PER WEEK
MAN, WIFE
SINGLE MAN
&
WIFE
PERSON & 1 CHILD
£
£
P
£
P
8
3 37*
4
MAN, WIFE
& 2 CHILDREN
MAN, WIFE & 3 CHILDREN
£
P
£
P
£
P
37*
5
o
5
0
5
0
57* 3
37*
4
0
4
62*
5
0
12 2
16 1
89*
2
57*
3
0
3
62*
4
25
20 1
21*
1
89*
2
32
2
74*
3
25
25 - 36*
1
04*
1
47
1
89*
2
32
0
62
1
04*
1
47
30
NIL
NIL
10 TABLE
5
REBATE OR ALLOWANCE WHERE RENT OF DWELLING I S £ 6
INCOME
PER WEEK
SINOLE
PERSON
MAN & WIFE
MAN, WIFE
& 1 CHILD
£
£
P
£
P
£
P
£
P
£
P
8
3
97*
97*
5
60
6
0
6
0
12
3
17*
3
97*
4
60
5
22*
5
85
16
2
U9*
3
3
60
k
22*
4
85
20
1
81 *
2
U9*
2
92
3
34*
3
25
-
96*
1
64*
2
07
2
49*
2
9
-
79*
1
22
1
64*
2
07
PER WEEK
30
NIL
11 MAN, WIFE
& 2 CHILDREN
MAN, WIFE
& 3 CHILDREN
­
85
2
1
APPENDIX 3
The p r o p o s e d new s u b s i d i e s f o r l o c a l
1,
The f o l l o w i n g new s u b s i d i e s w i l l
subsidies t o l o c a l
authorities,
replace a l l
Residual
1971/2.
housing
contributions
Acts:
Residual Subsidy
T r a n s i t i o n Sub s i d y
R i s i n g Costs Subsidy
Rent R e b a t e S u b s i d y
O p e r a t i o n a l D e f i c i t Subsidy
Town D e v e l o p m e n t S u b s i d y
Rent A l l o w a n c e S u b s i d y
Slum C l e a r a n c e S u b s i d y
Subsidy
The e x i s t i n g h o u s i n g s u b s i d i e s w i l l
2,
existing
o t h e r t h a n improvement
under t h e H o u s i n g A c t 1969 and e a r l i e r
^
authorities
in effect
T h i s r e s u l t w i l l be a c h i e v e d as f o l l o w s .
subsidies w i i l l
be p h a s e d o u t
The
existing
cease t o be p a y a b l e a f t e r 1971/2 b u t t h e r e w i l l
temporary and r e d u c i n g s u b s i d y ,
Account (HRA).
be p a i d t o t h e c r e d i t
The S e c r e t a r y
housing a u t h o r i t y ' s t o t a l
of State w i l l
entitlement
1971/2 ( i n c l u d i n g any c o n t r i b u t i o n
to the e x i s t i n g
r e c e i v e d u n d e r S e c t i o n 94 o f
the
t h e n be r e d u c e d i n
and 18 o f t h e H o u s i n g S u b s i d i e s A c t
1972/3
by
dwelling ( e x c l u d i n g temporary d w e l l i n g s p r o v i d e d under t h e
for
1972/3.
A c t 1944)
any) w i l l
for
£20
for
1967).I
every
Housing
i n t h e a u t h o r i t y ' s HRA as a t
31 M a r c h
be t h e amount o f R e s i d u a l S u b s i d y
payablej
1972/3
will
e v e r y d w e l l i n g i n t h e HRA a s a t 31 M a r c h 1972
and
The amount o f any R e s i d u a l S u b s i d y p a y a b l e f o r
be reduced by £20
local
for
The amount so d e t e r m i n e d w i l l
The b a l a n c e ( i f
1971/2.
subsidies
9
1972,
be
o f t h e H o u s i n g Revenue
d e t e r m i n e each
Housing A c t 1964 and S e c t i o n s
(Temporary Accommodation)
be a
the Residual Subsidy, which w i l l
r e l a t e d t o t h e t o t a l amount o f e x i s t i n g s u b s i d i e s p a y a b l e f o r
The R e s i d u a l S u b s i d y w i l l
after
1. any b a l a n c e w i l l
In s u b s e q u e n t
b e t h e amount o f R e s i d u a l
financial
the p r e c e d i n g f i n a n c i a l
in t h e HRA a s a t
y e a r s t h e amount o f R e s i d u a l
year w i l l
3 1 March 1 9 7 2 a n d a n y b a l a n c e w i l l
until no R e s i d u a l
3.
Subsidy i s
1973/74.
Subsidy payable
b e r e d u c e d by £ 1 0 f o r e v e r y
Residual S u b s i d y p a y a b l e f o r t h a t y e a r .
Transition
Subsidy payable for
dwelling
be t h e amount
This process w i l l
payable for the f i n a n c i a l
for
of
continue
year.
Subsidy
T h i s s u b s i d y w i l l become p a y a b l e t o any a u t h o r i t y ,
of i t s HRA, f o r a n y f i n a n c i a l
for the
y e a r towards the d e f i c i e n c y
arising
the i n c r e a s e i n n e t r e n t i n c o m e f o r t h e y e a r o v e r t h e n e t r e n t
the p r e c e d i n g y e a r i s
l e s s than,
of d w e l l i n g s i n t h e HRA a s a t
entitlement t o e x i s t i n g
income
3 1 March 1 9 7 2 o r t h e a u t h o r i t y ' s
or t h e amount b y w h i c h t h e R e s i d u a l
number
and,
Subsidy f o r the preceding
Subsidy for t h e preceding year
the R e s i d u a l S u b s i d y f o r t h e y e a r , w h i c h e v e r i s l e s s .
of t h i s d e f i c i e n c y ,
The
for
total
for 1971/2, whichever i s l e s s ,
the Residual
Subsidy w i l l m e e t a p e r c e n t a g e
when
f o r 1972/3* £20 m u l t i p l i e d by'the
subsidies
1973/4 and s u b s e q u e n t y e a r s ,
credit
for
year
exceeds
Transition
and t h e b a l a n c e o f
d e f i c i e n c y w i l l b e m e t by a r a t e f u n d c o n t r i b u t i o n t o t h e HRA, a s
the
followss-
P e r c e n t a g e t o b e met b y :
Transition
1972/3
1973/4
1974/5
1975/6 -
Subsidy
R a t e Fund
90
85
80
75
1981/2
Subject t o paragraph 4 b e l o w ,
Thus f o r a n y f i n a n c i a l
10
15
20
25
t h e T r a n s i t i o n S u b s i d y and a s s o c i a t e d
fund c o n t r i b u t i o n w h i c h become p a y a b l e f o r a n y f i n a n c i a l
continue t o be p a y a b l e f o r
Contribution
year
will
s u b s e q u e n t y e a r s u p t o and i n c l u d i n g
y e a r from 1 9 7 3 / 4 t o 1 9 8 1 / 2 t h e r e may b e
i n t h e c a s e o f a n y a u t h o r i t y an amount o f T r a n s i t i o n S u b s i d y ,
2.
rate
1981/2.
payable
and a
corresponding amount of the associated rate fund contribution, consisting of (a) the amount or amounts of subsidy and contribution which became payable for one or more of the preceding years, and/or (b) the amount of subsidy and contribution which becomes payable for the year. 4,
The amount of Transition Subsidy payable to an authority for any financial year, and of the associated rate fund contribution, will be limited to a total not exceeding the amount needed to balance the HRA in accordance with paragraphs 18 and 19 below. Rising Costs Subsidy 5.
This subsidy will become payable to any authority, for the credit of its HRA, when the reckonable expenditure falling on the HRA for any financial year exceeds the reckonable expenditure for the preceding year.
"Reckonable expenditure" will include all expenditure properly debited to the HRA, subject, broadly speaking, to limits set for loan charges in respect of new dwellings (including car accommodation at the rate of one car per dwelling) under the housing cost yardstick procedure, and for the cost of repairs and management on a basis determined after consultation with the local authority associations. 6.
Subject to paragraph 7 below, for 1972/3 and 1973/4 a percentage of the excess of any increase in reckonable expenditure over £6 for every
dwelling in the HRA, and for 1974/5 - 1981/2 a percentage of the whole of any increase in reckonable expenditure, will qualify for Rising Costs Subsidy and the balance of that excess or increase will be met by a rate fund contribution to the HRA, as follows:­
3. Rising
1972/3
1973/4
1974/5
1975/6 - 1981/2
Percentage to be met byRate Fund
Costs SubsidyContribution
90
85
80
75
10
15
20
25
Subject to paragraph 7 below, the amounts of Rising Costs Subsidy and.
of its associated rate fund contribution which become payable for any
of the years 1972/3 - 1976/7 will continue to be payable for subsequent
years up to and including 1981/2; the amounts of subsidy and contri­
bution which become payable for any year after 1976/7 will continue to
be payable for the four subsequent years. Thus, as in the ca'se of
Transition Subsidy, there may be payable for any financial year after
1972/3 an amount of Rising Costs Subsidy, and a corresponding amount of
I the associated rate fund contribution, consisting of the amount or amounts
of subsidy and contribution which became payable for one or more of the
preceding years and/or the amount of subsidy and contribution which
becomes payable for the year.
7.
The amount of Rising Costs Subsidy payable to an authority for any
financial year, together with the associated rate fund contribution will,
as in the case of Transition Subsidy, be limited to a total not
exceeding the amount needed to balance the HRA in accordance with
paragraphs 18 and 19 below.
Rent Rebate Subsidy
8.
Subject to paragraph 9 below, each authority will make a rate fund
contribution to the HRA in respect of rebates equal to the cost of rent
rebates granted to the tenants of i t s dwellings in the HRA for any
financial year (including for 1972/3 any rebates granted under any
existing rebate scheme) plus any payments in respect of rebates made for
the year to the Department of Health and Social Security (see
paragraph
11 of Appendix 2 ) .
If the provisions of t h e
authority's rebate scheme are the same as the model provisions, the
Rent Rebate Subsidy will be a percentage of the whole of the rate fund
contribution in respect of rebates.
If the provisions of the
authority's rebate scheme are more favourable to the tenant than the
model provisions (see paragraph I4.9 of t h e White Paper), t h e aithority will need
to keep comparative records of the actual amount of rent rebates granted
(and payments made to the Department of Health and Social Security) and
its estimate of what the amount would have been if its rebate scheme had
contained the model provisions;
and to apportion the rate fund contribu­
tion in respect of rebates between the total estimated amount and the
excess over that amount:
the Rent Rebate Subsidy will then be a per­
centage of that part of the rate fund contribution equal to the total
estimated amount.
In either case the percentage will be determined by the year for which
the rate fund contribution is made, as follows:­
1972/3
90?o
1973/4
85^
1974/5
80^
1975/6 - 1981/2
75/'-
The Rent Rebate Subsidy will be paid to the credit of the authority's General Rate Fund.
It will not be payable towards the expenses of administering the authority's rebate scheme. 9.
The rate fund contribution in respect of rebates will be limited to an amount not exceeding that needed to balance the HRA in accordance with paragraphs 18 and 19 below.
If the rate fund contribution of which the Rent Rebate Subsidy is a percentage is limited in this way, the subsidy will be limited nro rata. 5. Or.erational D e f i c i t
i 10.
Subsidy
S u b j e c t t o p a r a g r a p h s 18 a n d 19 b e l o w ,
for 1 9 7 2 / 3 , f o r t h e c r e d i t
(1)
I
the d i f f e r e n c e
this
subsidy w i l l
be p a y a b l e
o f t h e a u t h o r i t y ' s HRA, a t t h e r a t e o f 5C$ o f
b e t w e e n t h e e x c e s s o f HRA e x p e n d i t u r e f o r
d w e l l i n g i n t h e HRA as a t
1971/2
31 M a r c h 1972 o v e r HRA e x p e n d i t u r e
per
for
1970/71 p e r d w e l l i n g i n t h e HRA as a t 31 M a r c h 1971 and £ 1 5 , i f
the
1
latter figure is less,
m u l t i p l i e d by t h e number o f d w e l l i n g s i n t h e HRA a s a t
31 M a r c h
1972,
plus
(2)
t h e s m a l l e r o f t h e r a t e f u n d c o n t r i b u t i o n s t o t h e HRA f o r . 1 9 7 0 / 7 1 or 1 9 7 1 / 7 2 , i f
a r a t e f u n d c o n t r i b u t i o n was made f o r b o t h t h e s e years, plus
(3)
i n t h e case o f a r e c e i v i n g a u t h o r i t y u n d e r a t o w n d e v e l o p m e n t scheme, any c o n t r i b u t i o n r e c e i v e d f r o m a s e n d i n g a u t h o r i t y
a deficit
i n t h e HRA f o r
1971/72.
towards
The a u t h o r i t y w i l l make a r a t e f u n d c o n t r i b u t i o n t o t h e HRA e q u a l
the amount o f O p e r a t i o n a l D e f i c i t
11.
Operational D e f i c i t
1972/3 u n l e s s i t
Subsidy
to payable. S u b s i d y w i l L n o t b e p a y a b l e f o r any y e a r
was p a y a b l e f o r t h a t y e a r .
after
The amount p a y a b l e
1972/3 and t h e a s s o c i a t e d r a t e f u n d c o n t r i b u t i o n w i l l
payable u n t i l
for
continue to
be
1 9 8 1 / 2 , u n l e s s t h e y a r e l i m i t e d f o r any y e a r t o a t o t a l
exceeding t h e amount needed t o b a l a n c e t h e HRA i n a c c o r d a n c e w i t h
grahs 18 and 19 b e l o w .
If
not
para­
f o r a n y y e a r t h e amount o f s u b s i d y a n d
c o n t r i b u t i o n has t o be r e d u c e d on a c c o u n t
of t h i s
limitation,
be reduced by e q u a l amounts a n d t h e r e d u c e d amounts w i l l
Payable f o r s u b s e q u e n t y e a r s .
they
be t h e
Once t h e amounts have been
6.
will
amounts
eliminated
(CONFIDENTIAL)
-"or any year by reason of the limitation, the subsidy and contribution will cease to be payable for subsequent years. Town Development Subsidy 12. An authority designated as a sending authority for the purpose of town development will make contributions from its general rate fund to the general rate fund of the receiving authority for 1972/3 and sub­
sequent years.
The contributions will meet the percentage of the rate fund contributions in respect of rebates which is not met by Rent Rebate Subsidy and the rate fund contributions associated with Transition I Subsidy and Rising Costs Subsidy which the receiving authority makes in respect of tenants from the sending authority.
A Town Development Subsidy equal to 25$ of these contributions will be paid to the sending authority for the credit of its general rate fund. Rent Allowance Subsidy 13. If the provisions of the authority's rent allowance scheme are the I same as the model provisions, the Rent Allowance Subsidy will be a per­
centage of the total amount of the allowances paid for the year plus any
payment in respect of allowances made for the year to the Department of
Health and Social Security (see paragraph 11 of Appendix 2 ) .
If the
1
provisions of the authority s rent allowance scheme are more favourable to
the tenant than the mo del provisions (see paragraph 50 of the White faper), the
authority will need to keep comparative records of the actual amount of
allowances paid (and payments made to the Department of Health and Social
Security) and its estimate of what the amount would have been if its rent
allowance scheme had contained the model provisions;
estimate of the latter amount:
and to make a total
Rent Allowance Subsidy will then be a
Percentage of that total estimated amount.
will be 100$ for the years 1972/3 to 1975/6.
In either case the percentage
Before the percentage for
the years 1976/7 to 1981/2 is determined the Secretary of State will
(CONFIDENTIAL)
­
(CONFIDENTIAL)
consult the local authority associations.
The percentage for these years will be 80$ unless the Secretary of State makes an Order providing for a higher percentage for all authorities or any class of authority. The Rent Allowance Subsidy will be paid to the credit of the authority's general rate fund.
It will not be payable towards the expenses of administering the authority's rent allowance scheme. Slum Clearance Subsidy 14. This subsidy will be payable for the credit of the general rate fund to meet 75^ of the net annual loss for 1971/2 and subsequent years arising from the authority's slum clearance operations.
The calculation of the subsidy will be similar to the calculation of planning redevelopment grants made under Section 7 of the Local Government Act 1966.
Broadly,
the net annual loss for any financial year will be determined by reducing to notional 60 year annuities:­
(1) the capital expenditure on acquisition and clearance, and the capital values arising from the disposal or appropriation at the current market value for the new use, of any land acquired for slum clearance after 31 March 1968 and not disposed of, or appropriated for another purpose, before 1 April 1971;
and
(2) any capital expenditure incurred and capital income due in any year beginning with 1971/72 in connection with the making of demolition, closing or clearance orders; and adding to these annuities any revenue expenditure and income for the year relating to such land and orders. Expenditure and income in respect of unfit houses retained to provide temporary accommodation after 31 March 1972 will be included in the calculation of the net annual loss, if possession has been taken of the buses after 31 March 1972 and they have not been approved under section 13
o f
the Housing (Financial Provisions)Act 1958. (CONFIDENTIAL)
(CONFIDENTIAL)
Ihe Secretary of State will have power to exclude from the calculation of the annual loss for any year from 1986/7 onwards an annuity in respect of capital expenditure, capital values or capital income which arose more than 15 years before the year. 15. For the purpose of the Slum Clearance Subsidy authorities will require the Secretary of State's prior approval only in special cases eg for counting for subsidy purposes expenditure and income relating to the purchase by agreement, or appropriation, for slum clearance purposes of ^land and buildings adjoining (but not surrounded by) a clearance area. Rate Fund Contributions to the HRA 16. In addition to the rate fund contributions associated with Transition Subsidy, Rising Costs Subsidy and Operational Deficit Subsidy, and the rate fund contribution in respect of rebates authorities will make the following rate fund contributions to the HRA (subject to paragraph 18 below): (1) a contribution in accordance with a formula to be determined by the Secretary of State after consultation with the local authority associations in respect of the expenses of administering the rent rebate scheme; (2) a contribution equal to 1 / 3 of any improvement contributions payable
to the authority for the year under the Housing Act 1 9 6 9 and earlier
enactments in respect of the dwellings in its HRA; and a contribution
equal to the excess for the year over the cost proper incurred by
the authority in carrying out improvement works under the
Housing Act 1 9 6 9 in respect of such dwellings;
(3) any contribution which the Secretary of State will have power to require an authority to make in respect of land disposed of at less than market value, or to reflect the community's share of benefits or amenities arising from expenditure incurred in the exercise of the authority's housing functions; 9.
(CONFIDENTIAL)
(4) a contribution equal to any excess over the reckonable expenditure for subsidy purposes;
such reckonable expenditure will be deter­
mined in the same way as reckonable expenditure for the purpose of Rising Costs Subsidy (see paragraph 5 above). 17. If in any year after taking into the HRA all the amounts properly­
credited and debited to the account there is a deficit in the account, the authority will make a rate fund contribution equal to the deficit. Limitation of subsidies and rate fund contributions to balance the HRA 18. The amounts of Transition Subsidy, Rising Costs Subsidy, Operational
Deficit Subsidy, their associated rate fund contributions, the rate fund contributions in respect of rebates and all other rate fund contributions
payable to the HRA for any financial year are to be limited to an amount in total which is sufficient to balance the account without increasing the amount of the balance carried forward at the end of the year above the amount brought forward at the beginning of the year.
The balance will be achieved by adding these subsidies and rate fund contributions (in full or in part) to the other income required to be credited to the account for the year in the sequence set out below until the total income
in the account (including any deficit rate fund contribution which may be necessary under paragraph 17 above)
debited to the account for the year
decides to carry forward at the end
does not exceed any balance brought
equals the expenditure required to be plus any balance which the authority of the year, provided such a balance forward at the beginning of the year,,
The sequence will be as follows: (D
for the year 1972/73
(a)
the rate fund contributions referred to in paragraph 16(1) - (4) above and any part of the rate fund contribution in respect of rebates which is in excess of the total estimated amount of rebates under the model provisions (see paragraph 10. (CONFIDENTIAL)
8 above), in any sequence desired by the authority; (b)
the rate fund contribution in respect of rebates of which, the Rent Rebate Subsidy meets a percentage; (c)
Rising Costs Subsidy and the associated rate fund contribution; (d)
Transition Subsidy and the associated rate fund contribution; (e)
Operational Deficit Subsidy and the associated rate fund contribution. (2) for 1973/74 and subsequent years (a)
the rate fund contributions referred to at (l)(a) above; (b)
the rate fund contribution referred to at (l)(b) above? (c)
Operational Deficit Subsidy and the associated rate fund contribution; (d)
Rising Costs Subsidy and the associated rate fund contribution; (e)
Transition Subsidy and the associated rate fund contribution. 19. The rate fund contributions associated with Transition Subsidy, Rising Costs Subsidy and Operational Deficit Subsidy will be reduced, under paragraph 18 above, in the proportion they bear to the amount of subsidy with which they are associated.
Where the total amount of Transition Subsidy or Rising Costs Subsidy, together with the associated rate fund contribution, which would otherwise be payable for any financial year is reduced in consequence of paragraph 18 above and the subsidy and rate fund contribution consist of amounts which become payable in different years, the reduction will be made in the following order: first the amount, if any, which would otherwise become payable for the year will be reduced; thereafter the amounts which became payable in preceding years will be reduced, beginning with the amounts which became payable in the earliest preceding year and finishing with the amounts which became payable in the latest preceding year. 11. (CONFIDENTIAL)
Abolition of Housing Repairs and Equalisation Accounts 20,, local authorities will no longer be required to keep a separate Housing Repairs Account for 1972/3 and subsequent years and expenditure on repairs and maintenance for those years will be debited to the HRA. Any credit balance in the account at 31 March 1972 will be transferred to the HRA and become part of the working balance carried forward to the year 1972/73.
If there is a deficit in the Housing Repairs Account at 31 March 1972 it will be transferred to the debit side of the HRA for 1972/73 and will be treated as part of the repairs expenditure for that year. A local authority which has a Housing Equalisation Account will close it at the end of 1971/72 and transfer the balance to the Housing Capital Account. Working balances in the HRA 21. The working balance which may be carried forward at the end of any financial year will be limited to an amount equal to £30 multiplied by the number of dwellings in the HRA at the end of the year.
Any excess over this amount will be treated as a surplus and will be dealt with in accordance with paragraph 22 below.
An authority will have discretion to treat a working balance within this limit as a surplus.
For any year an authority will be able to carry forward a working balance larger than the balance brought forward from the previous year only if none of the subsidies or rate fund contributions referred to in paragraphs 17 and 18 above are payable to the HRA (and subject to the limit of £30 per dwelling)
It will have discretion either to maintain any working balance carried forward at the level of the balance brought forward or to reduce any working balance carried forward below the balance brought forward or to eliminate it altogether. 12. (CONFIDENTIAL)
Surpluses i£ the
HRA
22. The authority will pay any surplus (see paragraph 21 above) to the Secretary of State.
If no Rent Allowance Subsidy is payable to the authority for the year in which the surplus arises, the Secretary of State will pay half the surplus to the local authority for the credit of its general rate fund.
If any Rent Allowance Subsidy is payable to the authority for the year, the Secretary of State will retain the surplus if it is less than the Rent Allowance Subsidy payable for the year;
if
it is greater, he will retain the amount of the subsidy and 50$ of any difference between the surplus and the Subsidy and will pay the remaining 50$ of the difference to the local authority for the credit of -its general rate fund. 10 year Review 23. The Secretaries of State will review the operation of the subsidy system in consultation with the local authority associations towards the end of the first 10 years.
In the light of this review it will be possible to change the system as follows for any financial year after 1981/2: (1) the amount of Operational Deficit Subsidy and any associated rate fund contribution payable for 1981/82 may continue to be payable for 1982/83 and any subsequent year; (2) for any amounts of Transition Subsidy or Rising Costs Subsidy which first become payable in 1982/83 or any subsequent year, the relative percentages of subsidy and associated rate fund contribution may be altered so long as the percentage for subsidy is not less than 6C$ for any year. (3) the percentage of Rent Rebate Subsidy payable for any year beginning with 1982/83 may be at a rate other than 75$, provided it is not less than 60$ for any year; 13. (CONFIDENTIAL") (CONFIDENTIAL)
(4) the percentage of Rent Allowance Subsidy payable for any year beginning with 1982/83 may be at a rate other than the rate for 1981/82 (see paragraph 13 above) provided it is not less than 60$ for any year; (5) there may be an extension of the period for which Rising Costs Subsidy and the associated rate fund contribution may be payable; (6) a fixed amount may be excluded from the increase in reckonable expenditure per dwelling towards which Rising Costs Subsidy and the associated rate fund contribution become payable for any year beginning with 1982/83. The termination of existing housing subsidies 24. Apart from improvement contributions and the exceptions in para­
graph 27 below, existing housing subsidies will cease to be payable for 1972/3 and subsequent years.
Circular 78/71
As DOE Circular
39/71
and Welsh Office explain, any outstanding claims for subsidy under Acts prior to the Housing Subsides Act 1967 should be submitted by 8 October 1971 in order to ensure that the authority s full entitlement to such 1
subsidies is taken into account both in winding up the existing subsidy system and in establishing the authority s entitlement to Residual Subsidy 1
in the new system.
Claims for subsidies under the 1967 Act in respect of dwellings completed up to and including 31 March 1972 should be submitted by the date on which the legislation comes into effect.
No subsidy under the 1967 Act will be payable in respect of dwellings completed after 31 March 1972. 25. To facilitate the settlement of claims for existing subsidies the Secretaries of State will take power to settle on the basis of estimates outstanding claims in respect of which an application for subsidy has been submitted by the stipulated date. (CONFIDENTIAL) 26, Contributions which county councils are now required to make to a
1
housing authority s HRA, contributions by a sending authority to a
receiving authority under section 9 of the Housing Subsidies Act 1967 and
contributions to an authority under section 18 of the 1967 Act will also
cease to be payable for 1972/3 and subsequent years.
Payments in respect of dwellings provided by private persons
Zj, Recipients of payments from a local authority (whether these are
Exchequer contributions passed on by the authority or additional
contributions made by the authority under an agreement with the
recipient) under section 2 of the Housing etc Act 1923, section 2 of the
JHousing (Financial Provisions) Act 1924, section 3 of the Housing (Financial Provisions) Act 1938 and section 46 of the Housing (Financial Provisions) Act 1958 will be allowed to opt, not later than 31 March 1974, to receive a capitalised sum in respect of payments which might otherwise have been received in respect of any period of entitlement remaining after 31 March 1974*
Such capitalised sums will be based on 50$ of the outstanding entitlement to allow for periods in respect of which, if a capitalised payment had not been made, no annual payment would have fallen toe because the conditions attaching to its payment had not''been observed. If the recipient does not opt for a capitalised payment, annual payments under the existing law will continue.
Recipients who opt to receive a capitalised payment will be freed from any restriction as to the rent charged for the dwelling on which the annual payment is now conditional. Unfit houses acquired for temporary occupation . 28. Houses acquired for "patching" under section 13 of the Housing (Financial Provisions) Act 1958 will be taken out of the HRA for 1972/3 attd subsequent years.
Y/here houses have already on that date been approved under section 13 of the Act, the site contribution will be treated [
a s
ii it had been limited to a 10-year period;
and any annual contributions
(CONFIDENTIAL) in respect of any unexpired period of the 15-year period for patching
£rant, will be compounded and a capitalised payment will be made.
Where
an authority has taken possession of dwellings for patching before
.1 April 1972 but these have not at that date been approved under section
13 of the 1958 Act, the Secretary of State will have power to determine
the amount of the capitalised sum on the same basis as for approved
dwellings. Temporary bungalows 29. Unless a local authority has submitted an application for their demolition before the new legislation comes into effect, temporary bungalows standing on land owned by the authority will become the 1
authority s property and responsibility as from that date;
no further payments or recoveries will be made by the Secretary of State in respect of those dwellings after that date, nor in respect of temporary bungalows standing on land leased by the local authority. Government war buildings 30.
Wo further payments or recoveries will be made by the Secretary of
State in respect of these buildings after the date on which the new
legislation takes effect and those standing on land owned by the local
authority will become their property from that date.
B..2 houses
31. These aluminium bungalows were provided under Section 9 2 of the Housing
Act 1964. Except where a local authority has submitted an application for
their demolition before the date on which the new legislation takes effect,
the Secretary of State will not from that date be responsible for under­
taking the demolition of such dwellings;
nor will he have a n y right to
the proceeds of the disposal of materials from dwellings demolished after
responsibility for them has passed to the local authority.
(CONFIDENTIAL)
(CONFIDENTIAL)
Other recoveries by the Secretary of State
v 32.
For any year after 1971/72 the Secretary of State will not recover
' an;/ contributions under section 9 of the Housing Subsidies Act 1956,
section 17 of the Housing Subsidies Act 1967, or section 11(4) of the Requisitioned Houses and Housing (Amendment) Act 19.55. Hew Towns 33.
The arrangements for subsidies and rent rebates set out in this
Appendix will generally apply to New Town development corporations and
to the Commission for the New Towns,
But the corporations and the
Commission will not receive the Operational Deficit, Town Development,
Rent Allowance and Slum Clearance subsidies as these subsidies are not
appropriate to the circumstances of new towns.
The new towns will be
required to keep a Housing Account in a form similar to a local
authority's Housing Revenue Account.
They will make contributions to
it from their General Revenue Account equivalent to the rate fund
contributions to be made by local authorities and supplementary grants
under new towns powers will be paid to the corporations and the
Commission to make good these contributions.
Any contributions by new
towns to local authorities now made in order to facilitate comparable
levels of rent will be phased out, as this object will be achieved by
the application of the fair rent principle.
17.