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.
11 Comments
The village I live in, Stansted, has taken in a massive increase in housing, but we only received half the New Homes Bonus due to us because the Tory-run Uttlesford District Council decided to apply a different formula from the one used by the government to disburse the money. Uttlesford’s formula ensured that Tory-run Saffron Walden got a disproportionate share of the NHB than LibDem-run Stansted. At the same time, we’ve had little progress until now on a modern health centre we were promised under S106 agreements and many roads and pathways to the new estate are broken mud tracks (no exaggeration).
The result is that no-one will accept any further development and there is deep distrust of the secretive Local Development Framework, with a secret list of “high scoring” potential housing sites being discussed in private meetings with developers that the council refuses to divulge under Freedom of Information legislation.
In my mind, “localism” is bunk – it is a charter for developers to force more housing on communities can cannot cope. The neighbourhood plans are a joke, an expensive one for small parish councils. The coalition has got it completely wrong.
Daniel – unless I’ve misunderstood surely your grievance is against the way your district council has run things?
Hywel: The council runs things this way because it can. NHB is disbursed whatever way the council wishes it to be disbursed. Our village was due around £200,000 based on one year’s housing growth, but the district council decided to backdate growth a few years to before the NHB was introduced to benefit Tory strongholds. It is fully entitled to do this. That’s a weakness of the legislation. As a community, we are not being fully rewarded for the massive growth in housing we have taken on, so, no, NHB is not necessarily rewarding communities for growth.
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….
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.
Daniel: No, the Tory-controlled district council had the power to disburse the NHB funds and favoured a Tory-controlled parish council. However, the LibDem-controlled parish council responsible for the fastest growing area in the district was denied half the cash it was promised. What’s more, a third of the NHB was saved in reserves, ie the district council refused to spend it. The result of the decision will be an NHB formula that is biased against our village, which is growing by around 20% due to a controversial large-scale development. As such, it is not a great incentive and the community is not adequately rewarded for the growth over the past year, despite having helped pull in the funds from central government. As far as residents are concerned, it is yet another insult – for instance, we still do not have the health centre pledged seven years ago under a S106 agreement and growth in population means we have a lower GP to patient ratio than countries like India.
The Localism Bill is no comfort either as we can only impose conditions on additional development, we cannot stop housing development under the neighbourhood plans. And each NP, including the local referendum, will cost tens of thousands of pounds to develop, which is a massive cost for a village of less than 5,000 residents (and will cost even more if the residents vote it down and we go back to the drawing board). What looks like a good idea is actually a developers’ charter for unsustainable housing growth. I think the coalition has got it badly wrong on this.
Tony: What successive government’s have failed to spell out is why housing is needed. People also have legitimate concerns about large housing estates and their isolation from the existing community. You cannot dump hundreds of houses in one place and expect no-one to be concerned about the implications – that’s not Nimbyism, it is understandable. But smaller developments of 20-30 houses can easily be absorbed. The chief problem is the overheating of the housing market in the southeast and this is due to the failure to distribute growth in jobs more evenly around the country.
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….