Costs and benefits
38. In relation to estimated increases or reductions
in costs, the Department considers that savings would result from
staff time freed by removing the section 129 requirement. The
Department states that government regional offices would save
around ten person days a year. Initially, it was not clear whether
the Department considered that the proposal would also result
in savings in local housing authorities' staff time. In the consultation
document, the Department states that the proposal would benefit
local housing authorities from an administrative point of view,
as authorities would no longer need to devote staff time and other
resources to applications for approval of schemes.[19]
By contrast, in the explanatory statement, the Department describes
such savings as "negligible", because authorities choosing
to operate schemes would still need to formulate and administer
them.[20]
39. We sought clarification from the Department about
whether it considers that the proposal would result in savings
in local housing authorities' staff time, given these apparently
contradictory statements. The Department explained that the description
of such savings as "negligible", in the explanatory
statement, reflects the Department's current position. The Department
re-assessed the estimate it had made in the consultation document
as a consequence of additional information provided by some local
housing authorities in the consultation responses. Authorities'
staff time would still be taken up in formulating and operating
schemes.
40. We note that the Department also identifies likely
reductions in costs resulting from local housing authorities'
ability to make more effective use of schemes, because of the
increased flexibility that would result from the proposal. The
Department states that generating extra social tenancies through
cash incentive schemes is substantially cheaper than providing
new housing through registered social landlords. In London and
south-east England, where demand for housing is greatest, tenancies
are being generated through cash incentive schemes with grants
of up to £30,000, whereas the cost of providing new social
housing is around £100,000 per property. The Department states
that it cannot quantify how many more council houses would be
freed up for those in housing need if the proposed draft order
were to be made.
41. In relation to other benefits, the Department
considers that the proposal would remove delays caused to local
housing authorities in the course of seeking the Secretary of
State's approval for schemes.
42. We are therefore satisfied that the proposal
has been the subject of, and takes appropriate account of, estimates
of increases or reductions in costs or other benefits which may
result from its implementation.
Conclusion
43. On the evidence currently before us,[21]
we conclude that a draft order revised in the manner discussed
in paragraph 26 above should be laid before the House.
12 Explanatory statement, para 7.1 Back
13
Explanatory statement, para 7.1 Back
14
Appendix, para A3 Back
15
Explanatory statement, para 7.1 Back
16
Explanatory statement, Appendix B, para 3.5 Back
17
See the explanatory statement, Annex A of Appendix B, for a complete
list of consultees. Back
18
See the explanatory statement, Appendix D, for a complete list
of respondents to the consultation document. Back
19
Explanatory statement, Appendix B, para 5.1 Back
20
Explanatory statement, para 12.1 Back
21
See paragraph 1 above. Back
