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  6. South East councils react to new homes scheme

South East councils react to new homes scheme

A coalition of key local authorities in England has welcomed the principle of the Government’s New Homes Bonus (NHB) scheme but raised questions about how it will work.

The South East Strategic Leaders (SESL), a grouping of 21 councils in the South East and Eastern regions of England welcomed “the principle of rewarding local authorities where growth takes place and the localist approach to determining levels of development”. But also raised questions about implementation of the new regime.

In proposals published for consultation last November, Housing Minister Grant Shapps announced that the Government will match the council tax raised from new homes for the first six years through the New Homes Bonus.

Councils and communities would work together to decide how to spend the extra funding - whether council tax discounts for local residents, boosting frontline services like rubbish collection or providing local facilities like swimming pools and leisure centres.

Announcing the proposals, Grant Shapps said: "We are ending the system where the Government can tell communities what and where to build - that top-down approach slowed housebuilding to a trickle, so we need to take action now to get the country building again. That's why we've set aside almost £1bn so councils who build more homes start benefiting immediately from the extra cash, which they can spend on improving the local area.”

The council coalition wrote to the Department for Communities and Local Government: “It is not clear to us that the outlined approach provides enough of an incentive to communities for them to welcome development. We also believe that the NHB will be more effective if it represents additional funding over and above existing sources of revenue.”

The councils also asked about the proposal for a flat-rate affordable homes enhancement of £350 for each of the six years.

“SESL believes that there is a case for retaining the Government’s original proposal that the affordability enhancement should be a percentage of the total enhancement, rather than a flat rate. Such an arrangement would influence the pattern of homes built to ensure that they meet local need, i.e. by discouraging excessive building of flats where there is an identified need for family homes.”

Read the South East Strategic Leaders press release.


Roger Milne

13 January 2011