Plans to cream-off housing bonus cash criticised

Fri 27th September 2013, 8:52 am

Regeneration organisations have criticised government plans to use 400 million of New Homes Bonus receipts to fund single spending pots overseen by LEPs.

New homes: Government proposing to remove some bonus cash from councils

The government has suggested removing a proportion of the local authorities' bonus for granting new housing  to help fund local growth funds from 2015/16.

But in its response to a government consultation on the issue, the Local Government Association slammed the move, saying it would reduce the effectiveness of the NHB as an incentive for councils to approve housing.

Councillor Mike Jones, chair of the LGA's environment and housing board, said: "The removal of funding breaks the promise the government made to give councils freedom over how funding could be used.

“This threatens councils' plans to devolve funds to local communities, support local services and invest in housing and regeneration projects.”

He said councils strongly supported the principle of a local growth fund but said they should be funded through the devolution of budgets from Whitehall, and that town halls might have to raise council tax by an average of two per cent if they were to recoup the lost money.

Think tank Centre for Cities also cricitised the idea, saying said: “The NHB is a non ring-fenced payment direct to local authorities to incentivise them to accept new homes.

“Shifting money from a local non-ring-fenced fund to a national fund, and then re-devolving it to LEPs, goes against the principle of localism; a core element of the coalition’s agenda and central to both the NHB and the Single Local Growth Fund.”

It added that the move would make it difficult to assess the effectiveness of the NHB.

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