The Bill is designed to raise the statutory limit for issues from the Local Loans Fund and to simplify the procedure for making issues. Issues from the Fund from the 1st May, 1935, when it was established, up to the 31st March, 1961, amounted to close on £120 million. The great bulk of the issues related to housing. Slum clearance and other rehousing schemes of urban local authorities under the Housing of the Working Classes Acts accounted for £33 million, while the corresponding schemes of rural local authorities under the Labourers Acts accounted for £30½ million. This gives a total of £63½ million for the provision of houses by urban and rural authorities. These authorities have provided some 60,000 dwellings for tenant occupation since 1947.
In the private housing sector, issues totalled £31¾ million. Most of these issues—£27 million in all—related to loans under the Small Dwellings Acquisition Acts, the moneys being issued to local authorities for relending to persons purchasing their houses. Of the balance, £4½ million represented loans to local authorities to enable them to make supplementary grants to persons in the lower income groups acquiring new houses or improving existing houses.
Issues for the various housing services aggregated over £95 million. This represents a very substantial contribution of loan capital from public funds towards the cost of providing better housing for our people. Exchequer grants for new houses and for the improvement of existing houses are additional to the loan issues. The grants amounted to some £35 million in the period from 1935 to the 31st March last. They are estimated to cost £2½ million this year, which gives a cumulative total of £37½ million up to the 31st March, 1962.
Of the remaining issues from the Fund, totalling about £24 million, county homes, hospitals and dispensaries took almost £5½ million. Sanitary and other health services absorbed £14½ million, a large part of which went to meet expenditure on water supply and sewerage schemes. The balance of £4 million or so was spent on vocational schools and miscellaneous services, vocational schools taking over £2 million.
In addition to the issues actually made, the Fund also has substantial outstanding commitments in respect of loans sanctioned for projects in progress or to be started. Additional commitments of this kind brought the total liabilities of the Fund as at the 30th September last to £133 million, that is only £2 million less than the present statutory limit.
The total demand for loans is currently running at an annual rate of around £8 million and there are indications that it may increase. As was expected, requirements for local authority building have declined from the very high level of some years ago following the completion or near completion of the main re-housing programmes in many areas. Nevertheless, housing still accounts for by far the greater part of current issues. Rising costs have added to requirements and the revival which has taken place in private building has created a continuing demand for loans under the Small Dwellings Acquisition Acts. Total requirements for housing are now at an annual level of some £6 million, while requirements for water supply and sewerage schemes are running at about £1½ million.
It is proposed, therefore, to raise the statutory limit for issues from the Local Loans Fund from £135 million, as fixed by the Local Loans Fund (Amendment) Act, 1957, to £170 million. The Bill provides accordingly. This should suffice to cover commitments for a period of about four years.
The Bill also contains provisions aimed at simplifying the procedure for making loans from the Fund. Under the existing arrangements it is necessary to execute a separate mortgage deed for each loan to a local authority to secure the repayment of the loan and payment of the interest. The procedure is rather slow and unwieldy, and I feel that it could be shortened and simplified by statutory provisions as included in Section 3 of the Bill. These provisions envisage what will, in effect, be a statutory mortgage securing the loans on the rates or other appropriate revenues or funds of the local authorities and binding the authorities to repay the principal and to pay the interest in accordance with conditions which they have accepted beforehand. It will be possible to dispense with separate mortgage deeds in most cases, thereby saving time and expense for the local authorities and for the Commissioners of Public Works by whom the loans are issued on behalf of the Exchequer.
It is intended that the new system should apply to loans to town commissioners, health authorities and vocational education committees as well as to county councils, county borough councils, borough councils and urban district councils. No change of principle is involved as regards the charging or repayment of loans. Both borrower and lender will continue to have the same rights and obligations as at present, and borrowing powers reserved to the councils or committees of local bodies will continue to be reserved. I commend the provisions of this Bill to the House.
