HC Deb 16 June 1981 vol 6 cc354-6W
Mr. Wm. Ross

asked the Secretary of State for the Environment what is now the annual cost to public funds of each new publicly owned house of each size built in England and Wales, taking into account the rent received; what is the average annual cost over all publicly owned dwellings in England and Wales; and what was the total annual cost of all publicly owned houses to public funds in each of the last three available years.

Mr. Stanley

The average annual cost to public funds of all local authority dwellings in England and Wales in 1980–81 is estimated to have been £364 per dwelling. This comprises £283 Exchequer subsidy and £81 local authority rate fund contribution and is calculated after allowing for rent income.

The totals of Exchequer subsidy and rate fund contributions in England and Wales for the last three years were as follows:

£ million (outturn price)
1978–79 1979–80 1980–81*
Exchequer subsidy 1,053 1,333 1,480
Local authority rate fund contributions 213 340 424
Total Public expenditure 1,266 1,673 1,904
* Estimated.

Subsidy and rate fund contribution are not paid with respect to expenditure and income arising on individual dwellings. The effect on subsidy and RFC of adding dwellings to the existing stock would depend upon the local authority's general level of rents, loan charges, management and maintenance expenditure and other factors. It is, however, estimated that each new dwelling in England on average during its first year at present gives rise to current costs of some £2,000 net of rent received. This figure was arrived at from loan charges, for a 60-year period, on the average capital cost of a new house completed in mid-1981, plus average costs per dwelling of management and maintenance, less estimated rent. The extent to which these costs are met by Exchequer subsidy, by rate fund subsidy, or by other means varies from authority to authority.

Mr. Wm. Ross

asked the Secretary of State for the Environment if he will specify the three areas or councils in England and in Wales with the highest and the three areas or councils in England and in Wales with the lowest rents for publicly owned housing; and what information he has as to the comparable rents in those areas for one, two, three and four-bedroomed dwellings.

Councils Average (Unrebated) Rent (£ per week) Charged by Councils for
All Dwellings 1 Bedroom Dwellings 2 Bedroom Dwellings 3 Bedroom Dwellings 4 Bedroom Dwellings
(i) Highest Rents London Borough of Kensington and Chelsea 14.69 10.86 16.28 17.74 15.12
London Borough of Harrow 12.33 10.67 12.21 13.04 15.71
London Borough of Bromley 12.17 11.35 11.59 12.88 14.20
(ii) Lowest Rents Oadby and Wigston District Council 4.93 4.10 4.77 5.04 4.32
Beverley District Council 4.77 4.01 4.61 5.11 5.30
City of York 4.71 3.77 4.71 5.13 5.08

The source of this material is "Housing Rents Statistics at April 1980" published by the Chartered Institute of Public Finance and Accountancy (CIPFA). A copy of this publication is in the Library. It should be noted, however, that not all local authorities provide information to CIPFA.

Information on Welsh authorities rents should be sought from my right hon. Friend the Secretary of State for Wales.

Mr. Wm. Ross

asked the Secretary of State for the Environment if he will give for the latest available period the average contract price of providing a publicly owned dwelling of each size normally built in England and in Wales, the highest and lowest contract price accepted for the same dwellings in England and Wales, the total cost to public funds of each such dwelling over the period of the repayment of the capital cost of each type and size of house, and the economic rent of each such house.

Mr. Stanley

I refer the hon. Member to the information given in tables 2.3 and 2.4 of Housing and Construction Statistics, part 2, No. 4, a copy of which is in the Library of the House.

The costs given in table 2.3 are those of construction. They do not include land, fees, site development works or debt charges, for which data are not available.

Since total capital costs are not available separately for each type of dwelling, total revenue costs cannot be calculated. But for all types of dwelling taken together, the average revenue cost in the first year implies an unsubsidised historic cost rent of £52.50 a week.

SINGLE PERSON

1. Weekly Rent Level (£) at which Rent Rebate Payable
Weekly Income £
Year 30 40 50 60 70
1977 2.30 5.15 7.95 10.80 13.60
1978 1.70 4.50 7.35 10.15 13.00
1979 1.10 3.95 6.75 9.60 12.45

Mr. Stanley

The following table sets out the information requested at the latest available date—April 1980–for the three local authorities in England charging the highest average rents, and the three charging the lowest average rents for their HRA dwellings:

The total cost to public funds over the period of repayment of capital cost would depend heavily on the course of rents during that period, which is normally 60 years. The course of rents over so long a period is not foreseeable, so no calculation of total cost to public funds can be made.