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Houses which the new housing associations build for local authorities should not involve any financial loss to the associations, and those which they build for themselves will receive the appropriate Exchequer and rate contributions. The loss, if any, should be relatively small.
The general standard subsidy compares with the pre-war rates of £5.10s from the Exchequer and £2.15s from the rates and the capital value of the new subsidy at 60 years' purchase is £594 for each house, compared with £187.10s before the war. The subsidy for agricultural houses compares with £10 from the Exchequer and £2 from the rates in 1939, and the capital value will now be £770, compared with £272.
The Bill provides for assistance to private builders engaged in constructing houses for agricultural workers. They will receive an annual grant of £15 a house for 40 years. This subsidy will be paid on houses completed after the Bill becomes law and is conditional upon the dwelling being either owner-occupied or let at a restricted rent.
The national average rents, exclusive of rates, on which the subsidies have been calculated are 12s. 6d for London, 10s.0d. in other urban parts of the country, and 7s.6d in rural areas. The actual rents are not expected to vary very much from these figures.
Scheme for Scotland.
The Scottish Bill provides for substantial increases in the subsidies for local authorities and for the Scottish Special Housing Association. Retrospective payment will be made covering houses completed since March 7, 1944. The general standard subsidy will range from £21.10s to £25.10s from the Exchequer and £6.10s to £7.10s from the rates. Additional grants for houses built in redevelopment areas and for tenements on expensive sites will be paid up to £20 from the Exchequer and half that contribution from the rates. Exchequer grants for agricultural dwellings will range from £21.10s to £35 and the rate contribution will be £6.10s. The Exchequer subsidy towards hostels for single persons is increased to £11.
The Housing Association's activities will be extended to include house building as the contractors of local authorities in any part of Scotland. Provisions similar to those in the English Bill are made for assisting local authorities with the cost of prefabricated houses, for the period of subsidy and for the December review.
Extract From Leading Article "The Times " 6th February, 1946.
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The Minister of Health has at last made known the subsidies he proposes
pay to local authorities for the construction of new houses and flats. The broad intention of the two Bills introduced into Parliament yesterday is to meet from rates and taxes the differ- ence between the economic rent of the dwellings built and the rent which tenants are likely to be able to afford.
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It is not possible on the bare figures to express an immediate and final view on Mr. Bevan's proposals. Advocates of the decentralisation of overcrowded cities will no doubt argue that the "expensive site" subsidies will tend to continue the process of con- gestion. There will be a general welcome for the power given by the Bill to set up housing associations to build houses for local authorities. But compared with precedents two features are most striking. Except for the offer of £15 a house for forty years to private persons building houses for agricultural workers, an increase on the provision under the 1938 Act, the subsidies are confined to local authorities; and the capital value of the sums proposed, including rate as well as Exchequer contributions, is over three times as big as the subsidy before the war and nearly twice the assistance furnished under the Housing Act of 1924. The concentration of financial aid on houses built to public order can be supported by the evident necessity to confine the use of severely limited building resources to essential rehousing as distinct from speculative ventures or more expensive projects. The work will in any case be done in the main by private builders. question is whether, in a given time, the assistance of direct enterprise could have raised the total of new dwellings of the kind required to a higher level than the local authorities alone; and the sole guide to a conclusion on this issue can be provided by the regular reports on the progress of housing which the Minister of Health has so far failed to produce. The formidable amount of the subsidies reflects the large rise in the building costs which has appreciably exceeded the general rise in incomes. The figures not only mirror the serious shortage of houses; they also register the great and disproportionate burden which house-building will place upon both the public finances and the national resources sufficiently strained for such essential purposes as industrial re-equipment—if the cost of materials cannot be kept down and, above all, if the output of each building worker cannot be brought up to and beyond the level of before the war.
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