§ Mr. Raphael Tuckasked the Secretary of State for the Environment if he has reconsidered the effect of' the condition regarding rents attached to! he high cost element of housing subsidy, and if he will make a statement.
§ Mr. ShoreThe high costs element of housing subsidy, which has been paid since 1976–77, is intended to give extra financial help to authorities whose necessary expenditure is rising faster than their income, including that from reasonable rents. This extra subsidy has therefore been paid only to those authorities who, in addition to other qualifications, decide to raise their rents in the relevant finan-442W cial year by as much as the national average guideline of 60p per dwelling a week. It has, however, never been intended that there should be any legal compulsion on local authorities to raise their rents by this or any other figure.
I understand that some authorities have now obtained legal advice to the effect that, in certain circumstances, it might be held that they were under a legal obligation to raise their rents by an amount sufficient to qualify for the high costs subsidy. This advice has been substantially confirmed by further legal advice given by my Department. This creates a new situation. Since, with the repeal of the rent provisions of 1972 Housing Finance Act, it would be contrary to the Government's intention to impose such a legal obligation on local authorities in regard to their rents, I have decided to revoke the rent condition attached to the high costs element of subsidy for the year 1978–79. A revised determination of the details of entitlement to the subsidy will accordingly be circulated to local authorities as soon as possible.
I should add that this decision does not affect the Government's general policy on council rents or the broad guidance indicated to authorities in the Department's Circular 8/78.