Andrew Stunell MP writes… New Homes Bonus is rewarding communities that go for growth

Councils across England will receive a cash boost today with the provisional allocations of this year’s New Homes Bonus money being announced by the Department for Communities and Local Government. Now in its second year, the New Homes Bonus is proving to be a powerful incentive for local authorities to drive development and build the houses that we so desperately need.

Councils are rewarded for building new homes, and bringing empty homes back into use. Council tax on each home is matched by the Government for six years, with extra money for every affordable home.

The key things Liberal Democrats need to know about the announcement are:

  • This year the Coalition is paying out £430 million – more than double the money allocated in the first year.
  • 159,000 homes were eligible for the New Homes Bonus –a mixture of new homes and empty homes brought back into use.
    This is 10,000 more than last year.
  • 307,000 homes have been eligible for the New Homes Bonus over the last two years combined.
  • 353 councils in England will benefit, including Tower Hamlets (£10m), Birmingham (£7.5m), Leeds (£5.4m), Cornwall (£5.1m), Manchester (£4.6m), Bradford (£3.9m), and Sheffield (£3.3m).

Beyond this, the New Homes Bonus is also having an effect on bringing the numbers of Empty Homes down too. I successfully argued within government that empty homes should be eligible for the New Homes Bonus, to reward councils that made efforts to get them back into use. More than 37,000 empty homes have been brought back into use by councils in the last two years. This year’s figure of 21,000 was 6,000 higher than last year, netting councils an extra £19 million, and ensuring that councils in areas with low demand for new build housing, or limited space for development, can still be rewarded if they bring their empties back into use.

This year’s allocation also sees the payment of the affordable homes premium for the first time, worth £350 extra per affordable house. We’re paying out £19.4 million to councils, who’ve built almost 60,000 new affordable homes since last October.

Gone are the days of imposed targets from Whitehall. Labour’s top-down approach to building homes just didn’t work. It was unrealistic and ineffective, and didn’t take into account local needs or wishes. In the last year of the previous Government, for example, Labour were guilty of missing their own house building targets by a whopping 78,000 homes. Instead the New Homes Bonus is introducing a culture change – making it easier to persuade local people to go for development, and rewarding communities that go for growth.

Don’t just take my word for it; listen to the people on the ground. A recent national survey revealed that nearly three quarters of councils thought the cash payments made a significant contribution towards funding local services, and more than four out of ten councils said it was now easier to persuade their local community about the benefits of growth.

These are all very pleasing figures, and show that councils are getting on with the job of getting Britain building again, with positive action in their local communities. Not only are they delivering desperately needed homes for their local residents, but they’re getting extra cash to reward them for doing it. After thirteen years of Labour’s failed approach, the Coalition is determined to get Britain building again, and the New Homes Bonus is doing exactly that.

Andrew Stunell is the Lib Dem Communities Minister and MP for Hazel Grove.

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11 Comments

  • Daniel – unless I’ve misunderstood surely your grievance is against the way your district council has run things?

  • Daniel Henry 2nd Dec '11 - 4:07pm

    Daniel, let me check I understand you right.

    The Lib Dems control your local district council and were responsible for the growth being rewarded.

    However, it seems that the reward has been given to the county council that had nothing to do with it.

    Perhaps we should amend it so the reward goes to the level of government where the decision was made?

  • Anyone interested in the ‘truth’ behind all the hot air regarding ‘affordable’ housing could do worse than listen to today’s “More or Less’ on BBC R4….

  • Tony Dawson 2nd Dec '11 - 7:27pm

    I will be very interested to see which Local Authorities accept this laudable bribe to try to deal with the collossal housing problem that Labour left us. Unfortunately, my experience of local councillors shows a sadly-widespread predisposition to pander to NIMBYs partly because of personal prejudices and partially because of the view that people in htousing need do not vote much, even if hey are on the electoral register.

  • The evidence on whether this is working is reviewed by my LSE colleague Henry Overman on his blog: http://spatial-economics.blogspot.com/2011/12/is-new-homes-bonus-working-part-2.html

  • My experience of the planning system does not give me hope.

    Here in West Devon the Conservative borough council working with the Conservative county council (who own the disused railway track bed) have dismissed the sensible, acceptable, sustainable option of dispersing development in pockets around the edge of Tavistock (the main market town) to balance traffic and infrastructure impact.

    We’re getting instead a single massive estate tied to the reopening of the railway line to Plymouth. The problem with the railway is that it’s been built on in town, so the new station is to be a mile and a half from the centre of town, up a very steep hill, on the most congested through road, out of walking distance of over 85% of the population. Result? People will either drive to the station or not use it. That’s £18 million to be squandered on a vanity project that could be spent on the local school, hospital and sports facilities. And more buses.

    They trumpet “sustainability” and the need for new homes when the reality is that the system gets played, time and time again, to the benefit, convenience and profit of developers and the easy-life option for planning departments.

    If planning policy were designed for the creation of congestion, negative aesthetic impact, social isolation, extra commuting and problem estates, they could hardly improve on what they’re doing now.

  • As I ‘understand’ (I use the term reluctantly) the system…If a council tenant uses ‘Cameron’s discount’ to buy their house, that house is then counted as a ‘created’, ‘extra’ ‘affordable’ home even though nothing has been added to the housing stock…
    Perhaps, Andrew Stunell MP, if I’m wrong you will correct me?

    Lies, damn lies and statistics….

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