HOUSING AND UTILITIES IN THE UK

The objectives of our research were to expand our understanding of the UK housing and utilities sector and to identify the pros and cons of the English housing system.

The main problems that had to be solved were to collect, to study the necessary information on this topic, and to identify the most important features of housing and utilities services in the UK.

The article is about the present condition of the UK housing and utilities services, the reforms in that sector, the advantages and disadvantages of these services and the tariffs for housing and utilities services.

The UK has come a long way in creating socially acceptable and commercially attractive conditions in the public utilities sector. In 1974 the economic crisis in the UK broke out and it shook the British economy. And in 1979 privatization began, thanks to which such large companies as Cable and Wireless, British Telecom, British Gas and many others were transferred into the hands of private owners. Before privatization the state wrote off all the debts of utility companies, took over the costs of bringing the property into working conditions, carried out property certification and put on this property on balance accounting.

Picture 1. Autonomous regions

The United Kingdom now, as many decades ago, is an autonomous country and it independently supplies heat, gas and energy to population.

Currently about 10 companies supply electricity in the country. In all houses there are metering devices including individual ones. Electricity rates are different: at night and during the day. At night electricity is cheaper. The metering devices can be attached to the sensor which allows to see the flow in real time. Meter readings can be sent to the supplier via the Internet, for example, using a mobile phone. The most modest electricity bill per month is 30-40 pounds. To reduce their costs UK residents build houses with solar panels. Meter readings from solar panels are taken by employees of the utility company.

Electricity costs from 500 to 1,500 pounds per year. For apartments with 1-2 bedrooms up to 500-600, for a house with 3-4 bedrooms — 600-900. In the North electricity is more expensive than in the South. The cheapest — in Wales (an average of 257 pounds per room per year), more expensive-on the Islands off the coast of Scotland (an average of 419 pounds). A resident of London can freely change electricity suppliers, the only restriction is to do it no more than once a week. Suppliers can even be several: it is profitable to buy electricity from one supplier in the daytime, from another supplier – at night [1].

The monthly water bill for a family of 3 is about £ 50. The cost of water supply for a one-or two-bedroom apartment reaches 250-300 pounds a year, for a two-bedroom house-350-400, with three-six bedrooms — 500-800 pounds. You also need to pay for sewerage. It takes 13 -15 pounds per month for one person.

There are several companies engaged in the supply of gas. One of them is British Gas. Gas costs between £ 140 and £ 400 per room per year. Payment for gas is also made via the Internet. In the North in rural areas electric heating is used more often while in cities in the South — gas. Gas is cheaper in the East of England (an average of 242 pounds per room per year), it is more expensive — in the North-West of England (290 pounds). For an apartment with 1-2 bedrooms gas can cost from 300 to 600 pounds a year, for a house with 3-4 bedrooms — from 600 to 1 000. Many houses and apartments have gas fireplaces.

To regulate tariffs for housing and utilities services the UK uses RAB model or "price ceiling". The level of tariffs is fixed for several years. This model allows to reduce costs. Today the average Briton pays for utilities in average two times less than in 1990. Between 1990 and 1995 the tariffs increased by an average of 10%. Then the tariffs began to be revised downwards.

One of the important features of municipal reforms was the transfer and consolidation of hundreds of municipal water canals at first into the ownership of ten regional state-owned companies and then their privatization.

In 1997 the Labor Party introduced the ban on disconnection of water services for domestic consumers and at the same time they made a balancing decision on the inclusion of amounts not paid by customers in the current tariff [2].

The average salary of an Englishman is £2236 which corresponds to 197401 rubles per month. On the average utilities in Europe consume about 8-10% of family income. Unfortunately, the growth of tariffs for housing and utilities led to an increase in mortality and even to the emergence of the concept of "winter death". For the maintenance of the house per year you will have to pay an average of about £1,680 per year - it's about 150 thousand Russian rubles.

In addition to paying for utilities consumers also pay a municipal tax, the amount of which depends on the prestige of the area. Due to this municipal tax and partially due to the state budget funds in all cities of Great Britain the "pure English" comfort is maintained, lawns and flower beds are kept in proper condition , garbage is taken out, roads are repaired and also the work of firefighters, police and city officials is paid.

British people living in apartment buildings are required to pay a special fee for the care of the house. On these funds the owner of the house keeps elevators, corridors and territory surrounding that building in proper condition.

Housing and utilities operate without significant failures, but the main drawback is the presence of very old buildings that need modernization and reconstruction.

The great advantage is a direct payment for utilities services by the consumer to the supplier via the Internet. The quality of utilities in the UK is determined by a set of measured parameters. In particular the fixed time of dialing to the dispatcher service-30 seconds [3].

In conclusion, we would like to say that the English experience which took 15 years to reform the housing sector is very indicative and useful for Russia which is now on the threshold of large-scale transformations in this vital industry. We should learn the experience of developed foreign countries to improve our housing and utilities sector. And the UK has something to borrow.

References:

1. «English model. Reform of housing and communal services in the UK": a group of expert companies of economy and housing management. [Electronic resource] – access mode. – URL:  http://audit-gkh.ru/novosti/anglijskaya-model-reformirovanie-zhilishhno-kommunalnogo-xozyajstva-v-velikobritanii (date of treatment: 11.02.19)
2. Utilities – international experience: Leader of the Persona - the all-Ukrainian business journal: electron. journal. 2007. №1. [Electronic resource] – access Mode.– URL: http://leaderperson.com/journal/list  (date of treatment: 05.02.19).
3. Experience of foreign countries in reforming housing and communal services: Stud books, net – online student library. [Electronic resource] – access Mode. – URL: https://studbooks.net/2173879/ekonomika/opyt_zarubezhnyh_stran_reformirovanii_zhilischno_ kommunalnogo_hozyaystva (date of treatment: 07.02.19)