Tuesday, 17 December 2013

Lancaster City Council gets homes funding boost from government despite scheme criticisms

Lancaster City Council is to get £2,450,288 from government as a "New Homes Bonus", despite criticism of the schemne from Parliament's Public Accounts Committee in October.

The Government estimates that 232,000 extra households will need homes each year to 2033 but in 2012 only 115,600 new homes were built in England. The New Homes Bonus incentive is designed to reward councils and communities for helping to build more homes. It match funds the additional council tax raised for new homes and empty properties brought back into use for six years – with extra funding for new affordable homes.

The government says councils across the country have made the most of this additional funding to ensure their communities directly see the benefits of growth in their areas.

However, the Labour Party has criticised the policy, saying it disproportionately favours wealthier areas –  and an Inside Housing survey of every English council last summer found six in 10 local authorities are stockpiling new homes bonus cash rather than spending it on specific projects.


Despite the concerns, councils countrywide are due to receive a £16.5 million bonus next year for enabling nearly 9,500 new homes to be built in the county, the government has announced.

Across England, councils have received over £2 billion through the New Homes Bonus since it was set up in 2011/12 for helping to provide 550,000 more homes.

The allocation for 2014/15 means Lancashire will have received £36.7 million over a four year period for helping to provide 9,490 newly-built homes and conversions, and bringing 2,781 empty homes back into use. These figures also include 3,013 affordable homes.

Housing Minister Kris Hopkins has published details of the latest New Homes Bonus payments being made to England’s 353 councils, in recognition of their contribution to building new homes. Official figures last week from the Official for National Statistics showed that housing construction has risen to its highest levels since 2007.

Under the New Homes Bonus, councils have been rewarded for helping to provide 550,000 newly-built homes and conversions and bringing 93,000 empty homes back into use. This total includes over 160,000 affordable homes.

Mr Hopkins said these payments are finally giving communities a reason to say yes to new sustainable development – with councils free to spend the money as they see fit to benefit the local area, including freezing council tax.

“Top-down Regional Strategies and eco-towns failed hardworking families who aspired to own their own home, and built nothing but resentment," argues Kris Hopkin.

“In stark contrast, councils have received over £2 billion for their part in getting Britain building, and leading to housing construction reaching its highest levels for seven years.

“And they are free to spend the money any way they like to benefit their local communities – whether that’s supporting frontline services, providing new facilities or freezing council tax.”

Communities Minister Stephen Williams also welcomed the number of empty homes being brought back into productive use. “The Government is doing everything possible to tackle the problem of empty homes and urban blight," he said, "and the New Homes Bonus is a shot in the arm for councils tackling the problem of abandoned homes and urban blight locally.

“The number of long term empty homes has already fallen by 93,000 and we are now going further, giving councils the incentive to bring people, shops and jobs back to once abandoned areas, and to provide extra affordable homes we so badly need.”


In October, Parliament's Public Accounts Committee published its 29th Report on New Homes Bonus, and argued there was no credible data to show New Homes Bonus is working.


“The New Homes Bonus was introduced as a financial incentive for local authorities to encourage the building of new homes, commented the Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts.

“The scheme is funded from existing local authority grants. £7.5 billion will have been redistributed between councils by 2018-19, so there is a lot of money at stake. It is clearly vital that the incentives work and the Government achieves its aim.


“It is therefore disappointing that after more than two years of the scheme being up and running, no evaluation is in place and no credible data is available to show whether the scheme is working or not.

“So far the areas which have gained most money tend to be the areas where housing need is lowest. The areas that have lost most tend to be those where needs are greatest.

“The Department has yet to demonstrate whether the New Homes Bonus works. Is it helping to create more new homes than would have been built anyway? Is it the best way for Government to use its limited resources to create more homes where they are needed most?

"Its planned evaluation of the Bonus scheme is now urgent.” 

• A full list of provisional allocations of New Homes Bonus for the 2014-15 financial year can be found at: https://www.gov.uk/government/policies/increasing-the-number-of-available-homes/supporting-pages/new-homes-bonus

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