New Homes Bonus cash creamed off for LEP fund

Thu 27th June 2013, 4:48 pm

Councils will be expected to contribute 400 million from New Homes Bonus receipts towards a new 15 billion growth fund run by local enterprise partnerships, chancellor George Osborne has announced.

New Homes Bonus: 400 million for new fund

In this week’s comprehensive spending review, Osborne said that the single local growth fund, announced in March, would be worth £2 billion across transport, skills and housing between 2015 and 2016.

The fund would continue to be worth £2 billion for each year of the next parliament, he said, with allocations based on strategic economic plans prepared by LEPs.

Documents released alongside the spending review said: “£400 million from the New Homes Bonus will be pooled within local enterprise partnership areas to support strategic housing and economic development priorities.”

The government said that it would consult on the mechanism of how the pooling arrangements will work. 

The amount is much smaller than that recommended by Lord Heseltine in his report into encouraging growth, released last year.

And the Treasury warned: “LEPs need to demonstrate the impact that they can achieve with greater funding and flexibility. Over time the government will seek to expand the scope of funding included."

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