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THE NEW TOWNS

this pressure on the Corporations, so carefully must each new project be
considered, that it is amazing how well they have resisted the temptation
to cut standards all round and thus ease the financial burden. In 1952-53,
standards were cut with results that now stand out by contrast with previous
construction and with the slightly improved standards of 1954. These
blemishes will last the life of the towns.
it is necessary to emphasise again that this burden falls primarily on
the New Town rent payer, and that it is responsible for what has undoubtedly
been the most frequent cause of complaint during the last three or four years,
i.e. the high level of domestic rents, which may run as high as 50s. a week
for a three-bedroomed house. These complaints have been voiced by the
tenants, and also by the Corporations, whose annual reports have pointed
out that the New Towns faced a crisis unless rents could be stabilised.

Viakine Ends Meet

These facts must be borne in mind when examining the balance sheets
of the Corporations. The remarkable feature of these balance sheets, howsver,
 is that despite the increase in building costs and interest rates, and other
Factors which have added to the financial cares of the Corporations. they
are already in effect solvent concerns.
For the details of this remarkable achievement, the reader must turn to
the complete statements of accounts which accompany the annual reports
of the Corporations. There is room here only to draw attention to three
important financial features.
First, since the New Towns are growing rapidly, the accounts cannot be
in balance. More capital is poured in each year, and the revenue from rents
increases. In the early years, the ratio of capital to income was high; in
the last years it will be low. But from one year to another, for special
reasons, the proportion may vary. In Hemel Hempstead, for example, the
accounts for 1953-54 were very favourable; it is unlikely that they will seem
quite so good for 1954-55, as in the current year a great deal of capital has
been spent on the first stage of the town centre, which will not produce so
much revenue so quickly as would an equivalent amount devoted to houses.
Secondly, as development is taking place all the time, the test of good
financial management is not the total income set against total investment,
Sut revenue set against investment that has reached the earning point, or
what are called ‘fructified assets.” In Crawley, at 31 March, 1954, the
Corporation had received advances amounting to £10,849,694: of its investment,
 properties standing at £7,896,000 were producing income at the rate
of £434,810. On this basis, the yield on the investment is running at 5.5 per
cent., which is extremely good in view of the difficulties facing the Corporation.
 Here are the comparable yields for some other New Towns: for
Basildon, 5.6 per cent.; Hemel Hempstead, 6 per cent.; Bracknell. 5.7 pet
cent. Such figures promise well for the future.
On the revenue account, the position of most Corporations would be
much better, and this is the third matter to bear in mind, if they were
permitted to follow the normal practice of commercial developers and to