We'll scrap New Homes Bonus, says Labour

The Labour Party has announced it would scrap the coalition government's New Homes Bonus policy if it came to power in next year's general election.

Construction: Labour would axe New Homes Bonus
Construction: Labour would axe New Homes Bonus

The proposal formed part of the party's zero-based beview of the Communities and Local Government (CLG) budget, published yesterday.

A central government grant given to councils on the basis of the number of new homes they give permission to, the New Homes Bonus was introduced as an incentive for authorities to encourage housebuilding.

Under the scheme, the government matches the council tax raised on each new home built in England for six years.

But in its report, Labour pledges to "end the complex, regressive and ineffective New Homes Bonus, with the funding reallocated more fairly within local government".

It adds: "The National Audit Office has found no persuasive evidence that the New Homes Bonus is having the effect of incentivising new house building and the Public Accounts Committee has questioned its effectiveness and fairness of its distribution, calling for an urgent review."

The party has previously criticised the programme, which has earmarked £1.2billion of funding for 2015-16, for shifting funding from deprived to wealthier areas.

The paper also proposes savings of more than £500 million a year from the CLG budget through councils sharing services and "back-office collaboration",

Two-tier councils should explore becoming "virtual unitaries" through greater collaboration and integration of services, it says.

Another pledge is an English Devolution Act, to give more powers to "combined authorities with coterminous LEPS, across areas including transport and housing, business support, skills and employment support".

Kris Hopkins, Conservative local government minister, said that abolishing the New Homes Bonus would penalise councils that build more homes, and said the savings proposed were already being delivered by the government.

The report can be found here.


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