against the scheme. The matter was still under negotiation at the close of the year, but we expect that the estimate will be revised and reduced.

Building Guild Contracts.

No Guild contracts were entered into for housing schemes during the year.

In our last Report we mentioned that a Receiver had been appointed on behalf of the National Building Guild, Ltd., and that negotiations were afoot to assign that body's housing contracts in Scotland to the Scottish Building Guild. These negotiations were successful, and we approved acceptances of assignations as executed between the Scottish Building Guild and the Local Authorities of the Burghs of Dunfermline and Anstruther-Wester.

General.

Our practice has been not to approve tenders where separate items are taken in the schedules for hot-plates and gangways. Further, we have intimated that sleeper roads, where these are necessary for purposes other than the carting of excavated material, should be provided by the contractors concerned. We are advised that this action on our part is in accordance with the Mode of Measurement, and that the cost of such items is an oncost charge to be included in the rates and general items. The Scottish Building Contractors Association represented to us that our attitude was not warranted by custom or by the Scottish National Building Code and asked us to receive a deputation to discuss the matter. As we had previously given a hearing to this Association on a similar subject, we replied that we did not consider that any good purpose would be served in receiving the proposed deputation and that we could not alter our decision.

Representation was made to us on behalf of a joint committee of architects, surveyors, and representatives of the building trades in Glasgow against the action of certain local authorities in advertising for tenders for housing schemes where it was intended that the work should be done by direct labour. The committee represented that it was unfair that contractors should be put to the trouble of tendering where their tenders were to be used by local authorities as a basis on which to frame an estimate for carrying out the work by direct labour. So far as housing schemes were concerned the practice complained of appeared to be too limited to warrant us in issuing an instruction to local authorities on the subject as was suggested by the committee, but we suggested that they might make direct representations to the local authorities concerned.

A local authority who were successful in recovering the greater part of an over-payment made to a contractor owing to a mistake in the system of measurement adopted by the measurer proposed that the unrecovered balance should be allowed to rank against the scheme for the purpose of calculating State subsidy. We intimated that we could not agree to this proposal.

Final Measurements.

Contractors' accounts before they can be finally settled require to be submitted for our approval. Careful scrutiny of these accounts is

necessary, as we find that in many contracts proper allowances are not being made for the fluctuations in wages and in the prices of materials that occurred during the execution of the work. Great difficulty has been experienced in obtaining the various documents necessary, to enable us to check the draft final measurements and contractors have complained of the delay in settlement. One local authority whose contractors for joiner work had claimed interest on the outstanding balance as from December 1922, intimated that they considered the request reasonable. As it appeared from the Conditions of Contract that only the arbiter had power to award interest, and as the necessary submissions had not been made to us, we replied that if the claim was admitted by the local authority it would not be allowed to rank as a charge against the housing scheme in the calculation of State subsidy. Where other complaints of delay have been made to us we have urged local authorities to expedite final settlement.

Finance.

LOANS AUTHORISED AND AMOUNT RAISED FOR SCHEMES UNDER THE HOUSING, TOWN PLANNING, ETC. (SCOTLAND) ACT, 1919.

As will be seen from a previous paragraph we have authorised the acceptance of tenders for the erection of houses and the construction of streets to the amount of £22,335,482. In terms of Section 53 (6) of the Housing, Town Planning, etc. Act, 1909, we have consented to the borrowing by local authorities of a sum of £31,151,428 for their housing schemes. This sum includes £17,514,994 in respect of the issue of local bonds to which we have given consent in terms of Section 7 of the Housing (Additional Powers) Act, 1919. Of the above total sum of £31,151,428 we have recommended the Public Works Loan Board to grant loans to local authorities amounting to £6,038,920, while local authorities have raised £6,952,041 by the issue of local bonds, and have obtained £10,037,597 from other

sources.

The total sum actually raised during the year amounted to £2,865,378. Of this total £588,487 was raised by the issue of local bonds, £766,656 by loans from the Public Works Loan Board, and £1,510,235 from other sources.

LOCAL BONDS FOR HOUSING.

By a Treasury Minute dated 28th April the rate of interest on local bonds was reduced from 5 per cent. to 4 per cent. on and after 7th May. This Minute, however, provided that if in any particular issue the local authority satisfied us that a different rate could properly be charged the Treasury would consider the case on its merits.

PAYMENT OF EXCHEQUER SUBSIDY.

During the year payments were made to local authorities to the extent of £773,372, 11s. 1d.

The amount of Exchequer subsidy paid to public utility societies

was £17,774, 16s. 4d. and to private builders £14,726, 13s. 4d. Included in the latter figure is a sum of £9226, 13s. 4d. paid in terms of the Housing (Financial Assistance to Crofters) Scheme.

EXPENSES OF ABANDONED SCHEMES.

On the 31st October we received a deputation from the Convention of Royal Burghs in regard to the method of calculating the amount of the State. subsidy for schemes abandoned in consequence of the "cut" in 1921.

Our practice hitherto had been to regard for the purposes of subsidy such expenses as capital expenditure and to require that the loan charges thereon should be reckoned over the usual periods. The Convention represented strongly that it was unreasonable as well as unsound financially to require that the amount of the expenses incurred in some instances a considerable sum-should be regarded as capital and repayment spread over 60 years. It was maintained that where there was no asset against the expenditure the charge should be met out of revenue, and to the extent that it was not met by the produce of a rate of 4/5ths of a penny in the pound should be met by the State in one year. We appreciated the weight of the representations made and we recommended to the Treasury that the claim should be conceded. In reply the Treasury agreed that where no assets had been acquired the whole of the expenditure incurred with our sanction on an abortive scheme might be charged against revenue so that no rate contribution would be made by a local authority beyond the proceeds of 4/5ths of a penny rate for the year in which the charge was made.

SURVEYORS' FEES.

For a long time the adjustment of a scale of fees for surveyors for work done on the assisted house scheme under the Act of 1919 has been under negotiation between us and the Faculty of Surveyors of Scotland. During 1922 the Faculty appointed a sub-committee to confer with our representatives in order to formulate and agree on a scale of fees for submission to us and the Faculty. Early in 1923 an agreed scale was drawn up by parties and submitted for our approval. As we were advised that this scale was reasonable and allowed fees, having regard to Scottish practice, as closely as possible to those sanctioned by the Minister of Health in England, we prepared a memorandum embodying the proposed scale and submitted it to the Treasury with our recommendation for its approval. The Treasury approved, and we issued the prescribed scale to all local authorities and public utility societies under cover of our circular of the 23rd August.

RENTS.

Only 20 local authorities have applied to us during the year for approval of the initial rents proposed to be charged by them for houses erected in schemes under the Act of 1919. This small number is accounted for by the fact that we had reached agreement

in previous years with most local authorities as to the rents to be charged for the initial developments of their schemes, and these rents automatically applied to the later developments which have been completed during the year.

As a result of our negotiations and meetings with those local authorities who applied for our approval to rents we have been able to reach agreement in all cases except two. These have been referred to the Rents Tribunal, whose decision was pending at the close of the year.

Twenty-two local authorities asked to be allowed to reduce rents previously agreed upon, and after investigation we gave our consent to reductions in 16 instances and refused it in the remaining 6. In some of the cases in which reduction was sanctioned we found that the original rents had been fixed by the local authorities themselves at amounts in excess of what was warranted under the prescribed Rules. In other cases new evidence was brought before us shewing that a reduction was justified.

One application for reduction in rents had reference to a site at which the rents had previously been fixed by the Rents Tribunal. We took the view that it was not for us to review the Tribunal's decision, and accordingly did not agree to the proposed reduction. In communicating this decision we advised the local authority that if they were not satisfied they could appeal to the Tribunal. They have done so and the reference is now pending.

One local authority, having completed a small scheme, let the houses at a rent of £20 without obtaining our prior approval. In the circumstances we agreed to this rent running for one year, but stipulated that no renewal of the rents should be made unless at a rent of £22, and we warned the local authority that failure to observe this stipulation would render them liable to surcharge. In spite of this warning the houses were again let at the original figure, and accordingly in calculating the subsidy we reduced the deficit in the Revenue Account of the scheme by the difference between the rents charged and the rents which we had intimated we were prepared to accept. The rents have now been increased to the higher figure.

Nine references so far have been made to the Rents Tribunal, two of which have not been proceeded with. Of the remaining 7, awards have been made in 4 and are still pending in 3. Particulars will be found in Appendix XIII.

In one reference heard by the Tribunal during the year, it was suggested by the local authority concerned that in order to save time. the procedure should be limited to the submission of written pleadings and a full statement of facts, and that any hearing of parties should be by way of a debate on the pleadings. With our assent the Tribunal adopted this proposal, subject to their right to call for evidence on any point that appeared to them to be relevant. We understand that in further references a similar procedure is being suggested by the Tribunal.

Rents Tribunal.

We regret to have to report the deaths during the year of Sir Thomas Munro, G.B.E., and Mr. Thomas Fairbairn, both of whom were members of the Rents Tribunal. The former was the joint

nominea of the Association of County Councils and of the Association of District Committees, and the latter was one of our nominees on this body. In their place there were appointed Colonel Bolton and Mr. Forrest H. Lightbody respectively.

Slum Clearance.

SLUM CLEARANCE GRANT.

In our Report for last year we referred to the State Grant of £30,000 a year towards meeting the annual deficit on schemes by local authorities for the improvement of insanitary areas. In response to our circular of the 18th August, 1922, applications to participate in the grant were received from 37 local authorities, viz., 32 burghal local authorities and 5 county local authorities.

We met representatives of the local authorities and discussed with them the method to be adopted in distributing the grant. was agreed that there should be set apart out of the grant a pool of £5000 to be used in giving extra assistance to specially necessitous areas, i.e. either those areas where, owing to the housing conditions, the need was specially great, or those areas where the rate per £ required to meet the loss on the scheme would be excessive; and that the remaining £25,000 should be allocated among all the applying local authorities in proportion to the estimated annual deficit on a two years' scheme. It was also decided that, while the basis of a two years' scheme should be taken for the purpose of distributing the grant, the local authorities should not be limited to that period in carrying out their scheme, but should be given a reasonable time within which to do so.

The proposals submitted by one burghal local authority and one county authority did not in our opinion come within the scope of the grant, and the grant was allocated amongst the remaining 35 local authorities on the lines indicated above. One burghal local authority, however, has since decided not to proceed with any scheme, thus leaving 34 local authorities-30 burghal and 4 county-who are proceeding with schemes for the improvement of insanitary areas with the assistance offered from the grant.

The amount of grant available towards meeting the deficit on the schemes of the local authorities (except those to whom we made a special allocation from the pool), even on the basis of a two years' scheme, was less than 50 per cent. of the deficit, and in the circumstances the Treasury placed at our disposal an additional amount of grant which will enable us to increase the contribution to the remaining local authorities to an amount not exceeding one-half of the estimated average annual loss on the schemes submitted, this being the limit imposed in Section 1 (3) of the Housing, etc. Act, 1923.

The number of houses with which the 34 local authorities who are to participate in 'the grant are proceeding is 6259, comprising 6005 new houses and 254 reconstructed houses. The number of houses completed at the end of the year was 208 and 1177 were under construction.