Housing and Local Government

In England and Wales

J. B. Cullingworth

• Publisher: Routledge
• Year: 2021
• ISBN:
  9781000297034
• Edition: 1
• Topic: Ciencias sociales
• Subtopic: Sociología urbana

Originally published in 1966 and written at a time when UK housing policy was undergoing major changes, this volume provides a substantial historical introduction which outlines the development of housing policy in the UK from the mid 19th – mid 20th Centuries. Discussion of the administrative framework, the powers of local housing authorities, housing standards, finance and the improvement of older housing follows. Other issues covered include the social aspects of housing and the role of the state and the objectives of state action.

CHAPTER VII

Housing Finance

Local authority housing is normally financed over sixty years. Loans are raised mainly by stock, mortgages, bonds, and directly from the Government through the Public Works Loan Board (as well as by temporary borrowing). There is a number of controls over local authority borrowing: these change with the current national economic situation and the political outlook of the Government of the day. From 1945 to 1952 local authorities were generally prohibited from borrowing from any other source except the pwlb. This was a post-war innovation: before the war only smaller authorities normally borrowed from the Board. The change was made in order that the large volume of local authority capital expenditure on reconstruction could be financed in an orderly manner and as cheaply as possible. The system in effect provided a guarantee to all local authorities that they would be able to borrow money at low rates of interest for all approved capital schemes. The rate of interest for housing loans was 3 per cent. Following the return of the Conservative Government local authorities were allowed to borrow in the market, though the facilities of the pwlb remained open to them. In 1955, as a result of an increasing pressure on Exchequer funds, restrictions were placed on borrowing from the pwlb, and local authorities had to show that they could not borrow at reasonable terms in the market. Rates of interest were fixed by reference to the credit of local authorities of good standing in the market and not, as hitherto, by reference to the Government’s own credit. Rates of interest rose substantially at this time and in September the long-term rate reached 5 per cent for the first time since 1932. Further changes were made in subsequent years and pwlb loans were restricted to local authorities able to show real difficulty in obtaining their requirements in the mortgage or the stock market. The long-term pwlb rate fluctuated between $5\frac{3}{4}$ and $6\frac{3}{4}$ per cent, and the proportion of total local authority loans obtained from the pwlb (for all periods and for all purposes) fell from the 1951–2 figure of 85 per cent to 61 per cent in 1955–6, to 22 per cent in 1956–7, and to 8 per cent in 1958–9.

In recent years local authorities have found some difficulty in obtaining long-term funds for their expanding programmes of capital expenditure.¹⁸ By 1962 their borrowing for new works was about £550 million; in addition about £370 million was borrowed for refinancing maturing long-term debt. Temporary borrowing was about 15 per cent of their total loan debt (as compared with less than 3£ per cent in 1955). Borrowing on this scale created difficulties not only for the Central Government’s own borrowing operations, but also for monetary conditions generally. Short-term borrowing in particular was getting out of hand: its rising cost could not be held in check because the only alternative for local authorities was to commit themselves for a longer term at rates even higher than the high rate of temporary loans. In short the growth of local authority capital expenditure led to the growth of a huge volume of short-term debt ...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Original Title Page
• Original Copyright Page
• Introduction
• Table of Contents
• List of Tables
• I An Historical Sketch
• II The Administrative Framework
• III Local Authority Housing Administration
• IV Local Authority Housing and Housebuilding
• V Council House Tenants
• VI Standards for New Housing
• VII Housing Finance
• VIII Slum Clearance
• IX Improvement of Older Houses
• X Overcrowding and Multiple Occupation
• XI Aid to Owner-Occupiers and Housing Associations
• XII Some Social Aspects of Housing
• XIII Council Housing—A Wider View
• Index