ABSTRACT
The housing subsidy scheme introduced by the 1967 Housing Subsidies Act was designed to overcome two problems which were facing local authorities: the high (and fluctuating) rates of interest, and the variations in costs between different areas. More fundamentally, both cost-related and unit subsidy systems had become quite unrelated to actuality of local housing finance, since they applied only to the margin (i.e. new building) of a total stock for which costs, interest rates and subsidies were pooled. The Labour opposition committed themselves to a repeal of the Act – and quickly did so when they returned to power a few years later. This ‘repeal’ was inevitably accompanied by a stop-gap measure which was itself to be replaced as soon as another comprehensive review of housing finance had been completed. Both of the 1972 Housing Finance Acts made a major break with preceding subsidy policy. All existing subsidies were to be phased out and in future were to be related.
