Scottish Government

1. Introduction

This paper reports on work to investigate the possible development of an operating cost index ( OCI) for Scottish local authority landlords. It is structured as follows:

• Section 2 discusses the theory of operating cost functions, and explores the difficulties encountered in defining the housing management function, and the implications of this for measuring operating costs.
• Section 3 outlines the purpose and content of the Registered Social Landlord ( RSL) operating cost index produced for Communities Scotland by independent consultants and comments on the applicability of the published model to local authority landlords in Scotland.
• Section 4 analyses trends in reported Scottish local authority operating costs for the period 1996-2006 using data collected by the Scottish Government.
• Section 5 discusses the scope for extending the RSL operating cost index to the Scottish local authority landlords and presents a simple local authority operating cost regression analysis.
• Section 6 offers conclusions.