More notional costing fun

adamcollyer finally answers the questions on Exam candidate now scoring negative marks:

What should Mr A do? Obviously build the conversion.

At last!

But then ruins it by introducing yet more unrealistic assumptions. He picks up on my statement that "The planning permission, and hence the land for new housing (which is what we are trying to discuss here), costs the council nothing" and says...

... sorry, but what a silly thing to say. If the council can give itself planning permission for the land it owns, then it could equally well sell that land with planning permission for a lot of money. So if it housed the tenants in private housing it could use the profit from doing that to offset the cost.

Yeah right. The council can obviously make a profit of £50,000 by granting itself planning permission for a house and selling off that bit of land (to use the same figures as before). And it could put that money in the bank (yeah, right, it will piss it up the wall, hand it to an Icelandic bank etc) and earn £1,500 a year interest (sticking with my 3%).

This £1,500 income would cover a quarter of the cost of renting back an ex-council house (using Adam's figures), or indeed a fifth of the cost of renting back one of the new houses that might be built (assuming they are a bit nicer than council houses, as Adam contends, and assuming that the private landlord bumps up the rent a bit, as is observedly the case).

Generating income of £1,500 in order to incur an expense of at least £6,000 looks a bit twattish to me, but this is what selling off council housing boils down to - which was a core Home-Owner-Ist policy pursued by successive UK governments.

You may well be right that it is cheaper to build council houses than to use private landlords. But I never said it wasn't cheaper. I just said it wasn't FREE. And it's not. And that is my last word on the subject...(you will no doubt be pleased to hear).

Of course I am right. As a taxpayer, I would vastly prefer more council housing to be built than for the DWP to pay Housing Benefit to private landlords. It is vastly cheaper in cash terms. That is the only decision we have to make.

(Whether the social housing generates a small overall cost or a small overall loss to the taxpayer is an unknown and irrelevant for the purposes of this discussion. I have every reason to that assume the figure is so small that we might as well ignore it. I have never, ever said it was "free" or even disputed that it was "not free" as that word is fairly meaningless.).