REPORT OF THE FINANCE COMMITTEE
ON THE
JOINT REPORT OF THE BANK AND ESTATES COMMITTEES.
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A - SALE OF MUNICIPAL HOUSES.
1 The
Ministry of Health stipulate that sanction will not be given to the sale of any house under the Assisted Scheme at a figure whichwould involve an increase in the deficit under the scheme. Houses must be sold at cost price or a fair market price. If this is done
the deficit may not be increased, but where the sale price is less than the cost price it would appear that some adjustment will be
necessary to ensure that the liability of the Corporation under the scheme will not be effected.
2 The Finance Committee offer no objection
to that section of the Report of the Estates and Bank Committees relating to the sale of Assisted Scheme houses.
B - ADVANCES TO BUILD
OR PURCHASE HOUSES.
3 The Finance Committee have given careful consideration to the joint proposals of the Bank and Estates Committee,
ie, to give financial assistance to builders or intending purchasers of houses, and while in general accord with the suggestions made
by the two Committees, desire to make the following observations:
(a) Advances to Builders Prepared to Build on Corporation Plots,
etc
4 The Finance Committee concur with the suggestions to encourage builders by:
i A definite promise of a loan to the purchaser
to be advanced on completion of the house.
ii Periodical advances to the builder on progressive mortgage as building operations reach certain
agreed stages.
5 The Finance Committee believe that by this means the interests of the Corporation would be safeguarded, adequate
security being available to cover each advance.
(b) Promotion, Formation and Extension of Public Utility Societies, etc
6 In view
of the unsettled state of the money market and of present industrial conditions generally, the Finance Committee consider that at
this juncture it would not be advisable to invest Corporation funds in the authorised capital of Public Utility Societies, etc, except
in cases where the Finance Committee are satisfied as to security.
7 It is felt that encouragement to such bodies can best be given
on the lines already advocated by the joint Committees in regard to small builders, viz, by way of progressive mortgage on property
in course of erection, together with the assurance that the purchaser will be in a position to meet his obligation on completion.
(c) Sale
of Houses Erected by the public Works Committee.
8 The sale of houses erected independently of the Government Housing Assisted Scheme
will, for the limited period, provide the Public Works Committee with a source of working capital for building further houses, and
the Finance Committee feel that this policy should be pursued.
(d) Machinery for Making Advances.
9 The Council will be aware that
Section 7 (3) of the Birmingham Corporation Act, 1919, gives the Corporation power to make advances on security to be repaid within
30 years “.... to any person, society or body undertaking to build, purchase or acquire a dwelling house.”
10 Section 12 of the same
Act empowers the Municipal Bank to make advances on security to depositors desirous of purchasing or acquiring houses, but not to
persons or bodies willing to build such houses. Further, by the Regulations of the Municipal Bank, advances made under Section 12must be repaid within a period of 20 years.
11 The Finance Committee agree that the administration machinery of the Bank should be
utilised as far as possible for the foregoing schemes, but are of opinion that if advantage were taken by purchasers, etc, of the
longer period of repayment given by Section 7 of the 1919 Act, they would be in a better position than the Municipal Bank depositors,
and moreover it would be necessary to safeguard the Corporation from persons who may not be “bona fide” purchasers.
12 The Finance
Committee accordingly concur in the recommendation that, in cases of a special nature only, advances to builders or intending purchasers
of houses in course of erection be made for the full period allowed under Section 7 (3) of the Birmingham Corporation Act, 1919. In
all other advances made under this Section the period should not exceed the maximum allowed by the Municipal Bank, since it would
not be in the best interests of the Corporation to have two schemes in operation with different periods of repayment.
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It was moved by Mr Alderman George Cadbury, Junr.,
Seconded by Mr Councillor Appleby, and
Resolved:
26,198. That, subject to the sanction
of the ministry of Health and to the regulations of the Ministry applicable to the sale of houses erected under the Assisted Housing
Scheme, the Estates Committee be, and they are hereby, authorised and instructed to forthwith proceed with the sale of houses erected
by this Council under such Scheme, taking such action as may be found requisite to bring this instruction into effect.
It was moved
by Mr Alderman George Cadbury, Junr.,
seconded by Mr Councillor Appleby, and
Resolved:
26,199. That, subject to any requisite from the
Ministry of Health being obtained, the Estates Committee, acting in conjunction with the Public Works and Town Planning Committee,
be, and they are hereby, authorised and instructed to proceed with the sale of any houses erected by this Council irrespective of
the Assisted Housing Scheme, which are available for sale, the money received by such sales to be utilized for the erection of additional
houses by the Public Works and Town Planning Committee, subject to the instructions given to that Committee by Council Minute No 26,074.
It
was moved by Mr Alderman George Cadbury, Junr.,
seconded by Mr Councillor Appleby, and
Resolved:
26,200. That the Bank and Estates Committees
be, and they are hereby, instructed to formulate and bring into operation a scheme for utilizing, as far as practicable, the existing
machinery of the Bank in administering the scheme of the ministry of Health for the sale of houses erected by the Council.
It was moved
by Mr Alderman George Cadbury, Junr.,
seconded by Mr Councillor Appleby, and
Resolved:
26,201. That the Estates Committee be, and they
are hereby, authorised to publish by advertisement the facilities offered by this Council for the purchase of Corporation houses.
It
was moved by Mr Alderman George Cadbury, Junr.,
seconded by Mr Councillor Appleby,
That the Finance Committee be, and they are hereby,
authorised and instructed to advance, through the Estates Committee, money by way of progressive mortgage to persons to build houses
within the City on freehold land or on land leased for the purpose by the Corporation, the Estates Committee being empowered to lease
land for the building of houses on the terms and conditions indicated in the joint report.
It was moved by Alderman Sir David Brooks,
and seconded
By Mr Alderman Williams, as an amendment,
That the words after the word “houses” in the last sentence of the motion be
deleted, and the following words substituted: “on terms and conditions to be approved by the Finance Committee.”
The amendment being
accepted, the original motion was put as amended.
Resolved:
26,202. That the Finance Committee be, and they are hereby, authorised and
instructed to advance, through the Estates Committee, money by way of progressive mortgage to persons to build houses within the City
on freehold land or on land leased for the purpose by the Corporation, the Estates Committee being empowered to lease land for the
building of houses on terms and conditions to be approved by the Finance Committee.
It was moved by Mr Alderman George Cadbury, Junr.,
seconded
by Mr Councillor Appleby, and
Resolved:
26,203. That the Finance Committee be, and they are hereby, authorised and instructed in exercising,
through the Estates Committee, the powers of this Council contained in Section 7 (3) of the Birmingham Corporation Act, 1919, in cases
of a special nature, to allow the full period of 30 years for the repayment of advances with interest made in connection with the
purchase of houses erected under Council Minute No 26,074, all other advances made under this scheme to be for a period not exceeding
20 years, so as to coincide with the practice of the Bank Committee.
It was moved by Mr Alderman George Cadbury, Junr.,
seconded by
Mr Councillor Appleby, and
Resolved:
26,204. That the Finance Committee be, and they are hereby, authorised and instructed to provide,
through the Estates Committee, capital for advancing to Public Utility Societies and other suitable bodies or persons for the erection
of houses in accordance with the arrangements suggested in the foregoing joint report, and as approved by the Finance Committee.
It
was moved by Mr Alderman George Cadbury, Junr.,
seconded by Mr Councillor Appleby, and
Resolved:
26,205. That the foregoing joint report of the Bank and Estates Committees be approved, and that, subject to the requisite sanctions of the Ministry of Health being obtained, the Bank, Estates and Finance Committees respectively be, and they are hereby, authorised and instructed to take such steps as may be necessary to bring the various instructions arising from such report into effect.