Welsh Journals

Issues and Developments in Planning in Wales Edited by PHILIP COOKE Lecturer in Town Planning, U.W.I.S.T., Cardiff. HOUSING IN WALES The Restructuring of Housing Investment in Wales PETER McCORMACK Department of Social Administration, University College, Cardiff. RICHARD SPOONER Department of Town Planning, U.W.I.S.T., Cardiff. For Britain, as for many other western capitalist countries, the early nineteen seventies marked the end of a period of sustained post- war growth in the welfare state. In 1937, social expenditure had accounted for less than 11 of GNP, yet by 1975 this had risen to 29%: a phenomenal growth which has been met largely from in- creases in taxation. However, by the early seventies, an accelerated increase in social expenditure was posing the problem of how to finance it what O'Connor (1973) has called the "fiscal crisis of the state". And faced with a world slump, and high inflation rates, many countries raised government borrowing to record levels simply to meet a growing gap between revenue and expenditure. In Britain, the apparent burden of public expenditure seemed more acute in the light of industry's poor productivity record. The government's response to the crisis, initiated in 1973, accelerated after the inter- vention of the IMF in 1976, and continued to the present day, has been to cut back upon public expenditure in general, and social expenditure in particular. The conditions which facilitated the rapid expansion in social expenditure the post-war "long boom" in which labour won in- creases in both money wages and social wages have been well documented (see Gough, 1979), and will not be rehearsed here. Rather, the purpose of this paper is to relate in some detail, the onset of the financial crisis in one area of social spending, that of housing; and to describe and interpret the actions of the Welsh Office as the agent of central government, in bringing about a restructuring of housing investment by the local authorities of Wales. The capital- ist crisis of the seventies had an extraordinarily rapid and severe impact upon housing expenditure, which consequently had to bear a disproportionately large share of the cuts in public expenditure (75% under the present government's expenditure plans for 1980-1984). Yet while the emergence of the crisis in housing expenditure, and the government's response to that crisis were collapsed into a short space of years, many of the features of the crisis are common to other