Bagging a homes bonus

Details of government house building incentives have drawn a positive reaction but concerns remain over the division of spoils and the impact on empty homes.

New Homes: fund allocations will be split between districts and counties
New Homes: fund allocations will be split between districts and counties

The coalition government has taken some time to come into its own, but talk of localism has dominated the headlines from the start. Now work to incorporate this idea into the planning system has filtered down and policies and regulations are being debated on a daily basis.

Earlier this month the government began consultation on its new homes bonus, which would see financial rewards given to councils in return for the creation of housing.

"The current system does not provide the right incentive. If a local authority enables the building of new homes, little benefit is seen by the local community," declares housing minister Grant Shapps.

The bonus, which is set to be part of a wider package of incentives signalled in last month's Local Growth white paper (Planning, 5 November, p1), would pay councils sums equivalent to the national average for the council tax band on each additional property for the ensuing six years. The grant would not be ring-fenced.

"It's great to finally see genuine thought realised behind the coalition government's ideas. The bonus is a positive step that should lead to benefits," says Barton Willmore senior partner Ian Tant.

British Property Federation chief executive Liz Peace agrees: "It sends a clear signal that communities accepting desperately needed housing will be rewarded while those that do not will lose out."

But Tant also warns that local authorities and communities which have already adopted an anti-development stance will not change their mindset because of the bonus alone. "It will take a knock-on effect," he suggests. "If they see their neighbouring authority is better off as a result, that could have a positive effect on other councils."

The government has set aside £1 billion for bonus payments. The consultation document (Planning, 19 November, p2), which is out for comment until Christmas Eve, explains that any money paid to local authorities would be divided, with 80 per cent going to district councils and 20 per cent to counties. Greenwich and Woolwich MP and former housing minister Nick Raynsford has attacked this proposal.

"In shire areas, the rigid 80-20 split between district and county authorities will pose a serious disincentive to counties to provide infrastructure such as roads, school places and social services support made necessary by new developments. This is the opposite of the claimed flexibility," Raynsford complains.

Savills planning director David Henry maintains that it is crucial that all the stakeholders involved in a bonus contribution work together. "It is possible that the newly formed local enterprise partnerships (LEPs) will have a role to play," he says.

"It will be interesting to see how the money will be pooled, transferred and spent between them and the councils. For purposes of transparency, it has to be clear that a grant of permission will benefit the community and show exactly where those benefits will be."

The Homes and Communities Agency (HCA) welcomes the proposals as a good example of how localism can work in practice. "The new homes bonus will be a test of the HCA's role as enabler," says chief executive Pat Richie. "We look forward, where invited by local authorities, to playing our part in helping maximise the benefits of the bonus to local communities."

Tant says the government will need to make clear how councils can take the bonus into account when considering planning applications. "Local authorities will have to be able to take into consideration the amount of money that can be raised through the bonus when making planning decisions," he says. "This will need to be clarified in the localism bill and it is an issue we will raise in response to the consultation."

The government is also asking for views on whether councils can add the refurbishment of existing empty housing stock into the equation in claiming bonus payments. "I can see no reason why empty homes should not be included, but I imagine they will remain a minor contribution," contends Tant.

However, Chartered Institute of Housing chief executive Sarah Webb believes that a move in this direction would be particularly welcome.

"We are concerned about how the bonus will work with regeneration schemes and in areas where housing market renewal is under way," she says. "Local people who are working hard to make their communities better places to live shouldn't miss out if they have had to accept demolition of homes that are no longer fit for habitation."

Empty Homes chief executive David Ireland agrees: "It is bizarre that the current system completely ignores homes created by bringing abandoned properties back into use. The people who move into refurbished homes know that new housing has been created, but the current system says no," he complains.

"This matters because local authorities make strategic decisions on this basis. On many occasions, homes have been left empty because local authorities could only claim credit or rewards for new housing by getting more homes built instead," Ireland reflects.

New Homes Bonus - Consultation is available at

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