Policy summary - Councils and neighbourhoods asked to pilot benefits model

Policy: Development Benefits Pilots

New Homes: incentives pilot launched
New Homes: incentives pilot launched

Issued by: Department for Communities and Local Government

Issue date: 17 September 2014

Closing date: 24 October 2014

Background: This spring's Budget announced the government's intention to pilot a scheme to look at methods for passing a share of the benefits of development directly to households. The Department for Communities and Local Government (DCLG) has now launched a prospectus inviting expressions of interest from local planning authorities and bodies preparing neighbourhood plans.

Key points: The DCLG says the aim of the initiative is to "reduce delays and blockages by providing a financial incentive directly to residents that would reduce the incentive for residents to actively oppose development and increase the likelihood of positive support".

The proposal builds on incentives schemes such as the New Homes Bonus, the neighbourhood funding element of the Community Infrastructure Levy and community benefit packages related to energy projects. The document says the planning system may not fully reflect the impact of new homes, particularly from building noise and disruption, on nearby residents.

It explains that where a housing scheme attracts development benefits, eligible households would receive a direct payment when a housing site is allocated or when development proceeds. Payments could vary according to distance from the development or be based on a uniform figure, it suggests.

The DCLG says local authority bids should focus on a "specific forthcoming housing-focused development proposal" due to get under way no later than the end of 2015/16. Compensation payments would start when development commences, it explains.

The pilot also invites bids from parish councils or neighbourhood forums preparing neighbourhood plans with a housing element, which have not yet been submitted for examination. For these, "a certain amount of money" is mooted for either the parish council or the local authority for each home allocated on a neighbourhood plan site. This money would then be distributed to existing households nearest the development, provided it proceeds within five years of the plan's adoption.

The DCLG says a key aim of the trial is to test the likely effectiveness of development benefits in reducing opposition to and increasing active support for building. The pilots will also examine the most effective levels of payments and eligibility criteria, how far reduced local opposition might ease planning system constraints and the viability and costs of managing the model.

The Treasury has allocated £3.5 million for the pilot. The prospectus outlines the support available to participants, including funding to pay administrative costs and a dedicated DCLG support officer. The deadline for expressions of interest is 24 October and applicants will be notified of the outcome in December.

Development benefits pilots: invitation for expressions of interest can be found here.

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