Circular No. 9.
Housing and

Town Planning,
I., 1918, dated
18th March,
1918.

PROVISION OF HOUSES FOR THE WORKING CLASSES AFTER
THE WAR.

Local Government Board,

Edinburgh, 18th March, 1918.

Sir,

1. I am directed by the Local Government Board to advert to their Circular of 10th August, 1917, in regard to the provision of houses for the working classes at the conclusion of the war.

2. In that Circular it was stated that the Government recognised that it would be necessary to afford substantial financial assistance from public funds to those Local Authorities who were prepared to carry through, without delay, at the conclusion of the war, a programme of housing for the working classes approved by the Board, but it was not possible at the time to indicate the form which the financial assistance from the State would take or the extent of it. The Board have been in communication with the Lords Commissioners of His Majesty's Treasury on the subject, and, in regard to the financial assistance which may be granted by the State to Local Authorities carrying out housing schemes under Part III. of the Housing of the Working Classes Act, 1890, as soon after the conclusion of the war as funds are available or within a reasonable period thereafter, Their Lordships have laid down the following principles, viz. :—

(a) The full cost of the scheme should, in the first instance, be met out of the funds of the Local Authority by means of a loan to be raised by them.

(b) For a period of years, which Their Lordships think should not be less than seven, the necessary State assistance should be given in the form of a grant of a percentage of the loan charges sufficient to relieve the authority of 75 per cent. of the estimated annual deficit as approved by the Board.

(c) The deficit in each case should be estimated, with due regard to the actual increase in the cost of construction in the particular locality, on the basis of the estimated annual expenditure and the estimated annual income over a period of years.

(d) The interest charge on loan moneys should be taken at the amount actually paid where loans are raised from an outside source specifically for the purpose or at the current market rate where the money is provided from accumulated funds in the hands of the Local Authority.

(e) At the end of the period above referred to, the property will be valued and 75 per cent. of the excess (if any) of the amount of the loan outstanding over the then value of the property will be met by the State either by writing off a portion of the outstanding liability (if the money was borrowed from State sources) or by the Government undertaking responsibility for the appropriate proportion of the loan charges for the remainder of its

currency.

(f) Any loans by the State for the purpose of assisted schemes will be made at the full market rate of interest current from time to time, and not at the preferential rates ordinarily allowed for housing loans in order (1) that the whole of the State assistance may be given under one head, and (2) that Local Authorities may be encouraged to borrow on their own credit rather than to have recourse to State capital funds.

(9) The Lords Commissioners of the Treasury have further agreed that, as cases might arise in which the sharing by Local Authorities in the contemplated deficit even to the extent of 25 per cent. might prove a somewhat heavy burden, the Board should have discretion in cases in which 25 per cent. of the deficit in respect of any scheme would exceed the produce of a rate of a penny in the £ on the area chargeable, to increase the grant beyond 75 per cent., but subject to the condition that the amount of the deficit to be borne by the Local Authority shall not be reduced below the produce of a rate of a penny in the £.

3. The Board trust that Local Authorities, with this information before them, will at once proceed to a consideration of the schemes necessary to secure the provision of adequate housing for their districts. The Board are aware that many Local Authorities have had their administrative and technical staffs much reduced owing to exigencies of the war, but it is hoped that, nevertheless, every endeavour will be made now to prepare suitable schemes, so that whenever circumstances enable building operations to take place, the work can be begun with the least possible delay.

4. In communicating their proposals for financial assistance, Their Lordships expressly ask that it be made quite clear that the precise date at which the execution of any schemes approved by the Board can be commenced must depend on circumstances which cannot at present be foreseen, and that the financial position may be such that it may be necessary to give precedence to the more urgent cases, even to the exclusion, for the time being, of the less urgent. It is necessary to emphasise the fact that it is only in the very exceptional circumstances of the national emergency that the Government are proposing to give substantial assistance to Local Authorities for the execution of housing schemes.

5. The returns received in response to the Board's Circular of 10th August last show that a considerable number of Local Authorities are prepared, subject to adequate financial assistance being given, to frame and submit housing schemes. The Board have reason to believe, however, that, as regards some areas where it is stated there is no necessity for additional houses, a careful housing survey would reveal that new houses should be provided. If the Local Authorities of these areas, on a reconsideration of their needs, find that additional houses are required, they should report to the Board, without delay, their revised decision, stating at the same time the number of houses they are willing to provide.

6. As already indicated, a condition of giving the financial assistance will be that the scheme shall be approved by the Board. Such approval shall include approval of the site chosen for the erection of the houses, of the cost of the land and of the conditions on which the land is acquired, of the lay-out of the site, of the plans, specifications, and estimates, of the rentals proposed to be charged, and of the estimated annual maintenance expenditure on the scheme.

7. The Board will require to be furnished with the information, plans, &c., indicated in the Form and balance sheet which they hope to issue at an early date. In framing the balance sheet the amount of the loan charges should be calculated on the rate of interest at present in force for loans by the Public Works Loan Commissioners in respect of housing, namely, 51⁄2 per cent. Any necessary correction on this point, as well as in regard to the amount of the capital expenditure in connection with the scheme, can be made at a later stage. The Board recognise that, in the first instance, when the scheme is submitted for their approval, only an approximate estimate can be given in regard to the amount of such expenditure.

8. The scheme must be prepared in relation to a particular site or sites which the Local Authority have selected as being the most suitable that are available for the purpose. Before arrangements are finally made for acquiring any site, the Local Authority should obtain the Board's formal approval to the site proposed. The scheme should be so framed that as far as reasonably possible not more than 12 houses should be placed on an acre of land, and the scheme should provide for houses of at least three apartments. Except in very special circumstances, the Board will not approve of a scheme providing for the erection of houses of a smaller size.

9. In view of the restrictions placed upon the raising of loans by Local Authorities during the continuance of the war, I am to say that where it is contemplated to purchase land instead of feuing it, it is desirable that Local Authorities should endeavour to make such arrangements as will not involve the payment of the purchase money until after the war, and that any provisional agreement entered into by the Authority should stipulate that the purchase money should not be required to be paid until the Board have consented to the borrowing thereof. In only very exceptional circumstances could the Board consent to loans for the purpose during the war, and then only for very small amounts or for a proportion of the purchase money.

10. If, in the framing of their scheme, a Local Authority in whose area building bye-laws are in force find that any amendment of these bye-laws is desirable, I am to say that the Board will be prepared to give favourable consideration to any suggested amendments that may be submitted to them. The Board also reserve to themselves, as a condition of approving any scheme, the right to require a Local Authority to amend their building bye-laws in such respects as the Board consider desirable. The Local Authorities of burghs should, in framing their schemes, keep in view the powers contained in Section 39 of the Burgh Police (Scotland) Act, 1903, to relax certain statutory rules.

11. It will be a condition of any financial assistance given by the Government that the erection of the houses shall be commenced within two months from the date of the Board's consent to any loan, and that the houses shall be completed by a specified date, and that such number of houses as the Board determine shall be completed within twelve months from the date of the commencement. Provision will, however, be made in the conditions for an extension of these dates where circumstances necessitate this. I am, Sir,

With reference to the Board's Circular of 18th March, I am now directed to transmit for the information of the Local Authority copies of the Form and balance sheet referred to in paragraph 7 of that Circular. When these have been duly filled up they should, together with the relative plans and documents, accompany any application for the Board's approval of a housing scheme proposed to be carried out by the Local Authority.

In regard to the preparation of plans, I am to inform the Local Authority that the Board are arranging for the Institute of Scottish Architects to conduct a competition among architects. The object of the competition is twofold, first, to establish a panel of architects from which Local Authorities, if they so desire, will be able to choose an architect to assist and advise them in the preparation and carrying out of any housing scheme on terms to be arranged between the Local Authority and the architect so chosen; and second, to have prepared specimen plans of various types of houses and modes of development which will be available to Local Authorities for their guidance in the consideration of their schemes. The results of this competition will be made public in due course, and meantime the Local Authority may desire to delay the final preparation of their scheme until these results are announced." In the interval, however, the Local Authority should be considering carefully the needs of their area, and the scheme most suitable to those needs, and should expedite the preparation of as many of the preliminary details of the scheme as possible, including the selection of the site, the determination of the number and types of houses to be provided, the accommodation to be provided, &c. They should also consider the question of the provision of water supply, drainage, and lighting in relation to their proposed housing scheme.

As regards the selection of a site, I am to remind you that, as stated in paragraph 8 of the Board's Circular of 18th March, their approval to the site proposed should be obtained before arrangements are finally made for acquiring it.

The Board also hope to issue in due course for the information of Local Authorities a short memorandum including copies of specimen plans of houses and modes of development of housing schemes which have recently been undertaken by the Board for the Admiralty and the Ministry of Munitions. They are also appointing a Women's Committee to advise and report to them on the planning of houses from the housewife's standpoint.

I am further to say that the Board and their officers will be prepared to confer with and assist the Local Authority and their officials in determining the designs most suitable for their locality, and to advise on the suitability and lay-out of any proposed site, and otherwise to give such assistance to the Local Authority as will enable them to proceed with the framing of a housing scheme most appropriate to their requirements.

Since the issue of their Circular of 18th March, questions have been addressed to the Board as to the basis on which the valuation referred to in paragraph 2 (e) of that Circular would be made. I am now directed to state for the information of Local Authorities that the valuation will be determined on the basis of rental, and will be made by a qualified surveyor or valuator appointed by the Treasury and not in the salaried employment of any Government Department. This surveyor or valuator will be asked to make the valuation on the ordinary lines upon which valuations are made between a willing buyer and a willing seller for the purchase and sale of similar property.

I am, Sir,

The Clerk to the Local Authority.

Your obedient Servant,

JOHN T. MAXWELL,
Secretary.

FORM OF BALANCE SHEET REFERRED TO IN FOREGOING CIRCULAR.

Local Authority of

191

Balance (Excess of Expenditure over Income),