§ Sir George Young
To ask the Secretary of State for the Environment whether his Department will now review the operation of the system of admissible cost limits for housing subsidy, following the first 12 months' experience, as promised in DOE circular 5/88; and if he will make a statement.
§ Mr. Trippier
My Department is today issuing a consultation paper on the review of the operation of the admissible cost limit system for housing subsidy to the local authority associations and will be holding discussions with their representatives. The review will consider how well the system has worked since it replaced individual project control in April 1988.
The Department will also propose to the associations that the system should be extended to cover the costs of existing houses and flats acquired by councils, either by leasehold or purchase. This would not introduce any new constraints on the capacity of authorities to lease or buy dwellings, but it would limit the Exchequer's liability to subsidise costs in the same way as already applies with costs of new building by authorities. The views of local authority associations are sought within two months and we will then consider their responses. If the proposal is confirmed, however, its effect will be backdated to apply to acquisitions agreed on or after 17 August.