Evaluation finds bonus has had limited impact on plan-making and decisions

The flagship New Homes Bonus has had only a 'modest' direct impact on local plan housing targets and only a 'limited' role and impact on planning applications and decisions, according to a government-commissioned evaluation report.

Financial incentive: 50 per cent of planning officers agreed that the bonus is a powerful incentive for supporting housing growth
Financial incentive: 50 per cent of planning officers agreed that the bonus is a powerful incentive for supporting housing growth

The report, published today by the Department for Communities and Local Government (DCLG), found that almost 50 per cent of planning officers agreed that the New Homes Bonus is a powerful incentive for supporting housing growth and added that the bonus is meeting stated key policy principles of being "simple, transparent and flexible".

A central government grant given to councils on the basis of the number of new homes added to the council tax register, the New Homes Bonus was introduced as an incentive for authorities to encourage housebuilding. Last week, the Labour Party said that it would scrap the policy if elected.

According to the DCLG's evaluation report, around 40 per cent of planning officers agreed that the bonus had resulted in officers and their elected members being more supportive of new homes, "though this was found to be much less the case in the wider community where only 10 per cent of planning officers agreed the bonus had begun to increase support for new homes for this group".

The report said that the bonus is capable of being a material consideration in planning decisions, but found that, to date, the bonus was having a "limited impact on planning applications involving new homes".

Only 36 per cent of officers said they "always/almost always or often/sometimes took into account the revenues from the bonus when considering planning applications for new homes", according to the report.

The research found a "clear and consistent view from officers and members that the bonus should not influence the requirement to make decisions in accordance with 'law and planning policy'".

The research found that only 11 per cent of authorities agreed that the bonus had so far been an "important influence on the number of new homes proposed or adopted in my local plan", with 71 per cent disagreeing.

The report also "did not find evidence" that an enhancement to incentivise the provision of affordable housing "was providing an additional incentive in increasing support specifically for more affordable homes".

The report concluded: "Four years into the policy, there remains some way to go before it can reach its full potential to impact on attitudes and behaviours such as housing targets in local plans and subsequent planning decisions. This is partly because, as a non ring-fenced form of revenue, authorities have the freedom to spend receipts in ways that may be unrelated to specific development proposals."

In a statement, planning minister Brandon Lewis said: "We’ve got the country building again and given local communities control over where new homes go in their area. This is in stark contrast to the housing crash and failed top-down regional strategies of the last government.

"Councils have received more than £3 billion for their part in getting Britain building, and as a result housing construction has reached its highest level for 7 years.

"All local authorities are free to spend the money however they like to benefit their local communities – whether that’s supporting frontline services, providing new facilities or freezing council tax."

Evaluation of the New Homes Bonus is available here.

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