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Public Policy: Using Market-Based Approaches Schemes were established on the understanding that local authorities would meet ongoing running costs out of their own budgets. A minority of pilots designed schemes to operate within their previous budget and used ODPM funding for capital investment only. To some extent there was a trade-off between up-front and ongoing costs, with the set-up costs of an automated approach being higher than those of a paper-based approach but its running costs lower. Schemes using a property shop, for example, faced considerably higher ongoing costs than those that did not. The main cost of running CBL relative to the traditional allocation mechanism is advertising. Advertising costs have varied greatly as a result of: ● different abilities of local authorities to negotiate terms; ● geography. Pilots located in urban and southern areas generally faced higher costs because there was more demand for advertising space; ● frequency of advertising. Pilots operating weekly cycles incurred higher costs than those running fortnightly cycles; ● level of detail provided in advert; and ● size of borough. Smaller authorities could find £15,000 per annum to be a burden whilst larger authorities may face bills of £60,000 per annum. 149 For example, Camden had a budget of £30,000 for advertising in 2004/05. 150 Where CBL resulted in an increased number of applications, there were also additional staff costs to be met. The savings associated with CBL are currently being investigated by the ODPM in their longer-term evaluation projects, but are likely to stem from: ● households staying in properties longer, giving rise to taxpayer benefits and consumer satisfaction; ● reductions in refusal rates; and ● improvements in turnaround time. Improving the match of households and properties could be expected to lead to better housing performance measures. Reducing refusals rates, in particular, is then likely to increase the efficiency and speed of the allocation process because it implies less time spent finding a household who will accept the property being offered. Reduced void rates may also offset some costs in the short run by reducing rent loss. CBL may free up resources that could be re-deployed elsewhere, keeping additional staff costs to a minimum. For example, if CBL schemes have the 149 Marsh et al (2004), Op.Cit., p.46. 150 Home Connections, Camden Council. 142
desired effect of limiting points-chasing behaviour, this would increase the amount of housing officials’ time available for productive activity. Shifting the costs of the matching process from officials to the customers also releases local authority resources for other uses. There is no evidence on the magnitude of any cost savings as yet. UNANTICIPATED EFFECTS Section 10 – Choice-Based Letting in Social Housing There were three main unanticipated benefits arising from pilot CBL schemes, outlined below. ● Areas of low demand saw an immediate and substantial increase in the number of applicants beyond that which had been anticipated. In some areas, new applicants included groups who had not previously participated in social housing schemes. The statutory obligation on local authorities to continue to give priority to households in the ‘reasonable preference’ categories has ensured that this increased demand has not adversely affected those in greatest need. ● CBL has demonstrated to applicants and politicians alike how little social housing is available in high demand areas by increasing transparency. This information has led to the need for greater supply of social housing moving up local policy agendas in some areas. ● Many CBL schemes led to the creation of inter-organisational and joint working structures that have improved relationships between local authorities and RSLs, voluntary sector agencies and local authorities in other regions. 143
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DTI ECONOMICS PAPER NO.14 Public Po
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DTI ECONOMICS PAPER NO.14 Public Po
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Contents Acknowledgements vi Forewo
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Contents Section 11 Emissions Tradi
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Foreword There is increasing intere
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SECTION 1 Introduction and summary
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Public Policy: Using Market-Based A
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SECTION 2 Using market mechanisms U
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SECTION 3 Lessons for the design an
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SECTION 4 Introduction This part of
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SECTION 7 Market-Based Mechanisms W
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SECTION 8 Framework for assessing m
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Part IV Case Studies 73
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● the Green and White papers behi
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A prison failing to deliver on its
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Table 9.3 Companies providing priso
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Section 9 - Competitive Tendering o
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detect any deviation from a collusi
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at HMPS began as an equal mix of th
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(e.g. lighting). This impact could
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MARKET POWER The full benefits of c
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Page 103 and 104: Controlling for problems of asymmet
Page 105 and 106: Procurement process design One way
Page 107 and 108: however, financial deductions are m
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Page 111 and 112: The Independent Monitoring Board at
Page 113 and 114: Figure 9.1: Difference between the
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Page 117 and 118: design the invitation to tender and
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Page 121 and 122: and demand conditions. Second, we d
Page 123 and 124: DEMAND Anyone can apply to a local
Page 125 and 126: ● Rent deposit guarantee by the l
Page 127 and 128: The Green Paper stated the Governme
Page 129 and 130: It was not an objective of ODPM or
Page 131 and 132: DESCRIPTION OF MARKET MECHANISM The
Page 133 and 134: Once the outcome is determined, fee
Page 135 and 136: DEVELOPMENTS OVER TIME The major mo
Page 137 and 138: Concerns about capacity constraints
Page 139 and 140: from those already located within t
Page 141 and 142: In several areas, registrations by
Page 143 and 144: Controlling for information problem
Page 145 and 146: extent though, it was competition b
Page 147 and 148: Section 10 - Choice-Based Letting i
Page 149: levels are reducing and new tenants
Page 153 and 154: efficiency savings in some areas. T
Page 155 and 156: SECTION 11 Emissions Trading Introd
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Page 159 and 160: Section 11 - Emissions Trading emis
Page 161 and 162: A more detailed and diagrammatic de
Page 163 and 164: The costs of monitoring and reporti
Page 165 and 166: INITIAL ALLOCATION OF PROPERTY RIGH
Page 167 and 168: only 242 in the second year. The di
Page 169 and 170: COST-EFFICIENT EMISSIONS REDUCTIONS
Page 171 and 172: consultants to Defra of £11 per to
Page 173 and 174: Participation has helped us to rais
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Page 178 and 179: SECTION 12 Issues in the implementa
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