Sir George was announcing publication of guidance for local authorities considering voluntary competitive tendering in advance of CCT of housing management.
Sir George said: 'I am pleased that a growing number of local authorities are considering entering into management agreements in advance of the introduction of CCT for housing management. They recognise the benefits which contracting out can bring to the quality of services and value for money.
'The guidance which my department is sending to all housing authorities in England today will help authorities develop their strategies in the knowledge of what will be required of them. The guidance sets out the criteria against which the Secretary of State will consider management agreements. The two principal tests will be tenants involvement and value for money.
'The local authority will also need to demonstrate that proper regard has been given to the value for money of the proposed arrangement. The department will normally expect the authority to be able to show that the proposed agreement gives clearly identifiable benefits. This is normally demonstrated by competitive tendering. The guidance gives advice on tendering.'
Where work is awarded in-house, the guidance reminds authorities that they will not be required to re-tender immediately when CCT comes into effect if they can show to their auditors that the process which has resulted in them carrying out the work themselves involved equivalent competitive rigour to CCT, and that they have followed the principles for CCT set out in the existing legislation. The exemption from CCT would last for a maximum of five years, reflecting the time limit likely to be set for CCT.