Spending Review: Government to consult on reforms to New Homes Bonus

The government will consult on changes to the New Homes Bonus incentive scheme, including looking at ways to 'sharpen' the mechanism to reward communities for additional homes, chancellor George Osborne has announced.

New homes: incentive scheme faces review
New homes: incentive scheme faces review

The chancellor’s joint Spending Review and Autumn Statement, published today, says that the government will consult on "reforms to the New Homes Bonus, including means of sharpening the incentive to reward communities for additional homes and reducing the length of payments from six years to four years".

The document adds: "This will include a preferred option for savings of at least £800 million, which can be used for social care."

"Details of both reforms will be set out as part of the local government finance settlement consultation, which will include consideration of proposals to introduce a floor to ensure that no local authority loses out disproportionately."

According to the Spending Review document, the local government settlement includes reductions to local government grant of £6.1 billion by 2019/20, "though given forecast increases to other sources of local government income, overall local government spending will be higher in cash terms by 2019/20 than in 2015/16".

The Department for Communities and Local Government (DCLG) will shortly consult on changes to the local government finance system to pave the way for the implementation of 100 per cent business rate retention by the end of the Parliament, the document said.

It reveals that the DCLG itself will provide overall resource savings of 29 per cent by 2019/20 "through better financial management and further efficiency". 

This includes a further 20 per cent reduction in the department’s paybill, the document said, with total savings of £94 million from administration expenditure by 2019/20

Spending Review and Autumn Statement 2015 is available here.


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