Thursday, 19 January 2017

Councils hit out at New Homes Bonus changes

Councils have warned that proposed cuts and changes to the New Homes Bonus could make it more difficult for them to build new homes.

Under consultation proposals published in December new payments to councils will be reduced from six to four years, payments will be reduced if planning permission for new homes is only granted on appeal and councils without a Local Plan would not receive any bonus.

The New Homes Bonus currently rewards councils with a payment equivalent to six years’ council tax for each additional new home they add to their housing stock.

Derek Antrobus, executive lead member for strategic planning at Labour-led Salford City Council, said the proposals to cut the bonus are “bonkers”.

“If we avoid the penalties [by not building homes], we undermine the growth plan [to build either 7,300 or 10,350 homes] for Greater Manchester; if we back the growth plan, we are penalised.” he added.

The government hopes to save £800m from the changes to spend on social care.

Several councils warned the proposals could make it more difficult to increase housebuilding. A spokesperson for Liverpool City Council said the proposals could be a “disincentive” for councils to build.

A spokesperson for Sheffield City Council said the proposal to cut payments to four years could “adversely affect housing delivery” because the council has in the past used bonus payments to support new housebuilding and reduce the number of empty homes. The proposal to cut payments for councils that only grant new housing developments on appeal could “encourage” some councils to approve “poor quality development”, the Sheffield spokesperson added.

Fiona Colley, cabinet member for finance, modernisation and performance at Southwark Council, said the government “frequently refers to the desperate need for new homes” but the proposed changes “decrease the incentive for councils to build houses”.

A spokesperson for Conservative-led Barnet Council said the reduction in the New Homes Bonus payment “may lead to a reduction in the amount of infrastructure we can provide to local communities”.

The consultation closes in March and changes would take effect from 2017/18. A total of £1.5bn has been provisionally awarded for 2016/17.

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