Which councils are set to get the biggest New Homes Bonus payments next year?

Planning highlights the local authorities set to receive the biggest new housing incentive payments in 2019/20, though finds that overall funding through the scheme has fallen since last year.

Biggest bonus: the London Borough of Tower Hamlets town hall. Pic: Chris McKenna
Biggest bonus: the London Borough of Tower Hamlets town hall. Pic: Chris McKenna

On Friday, the MHCLG published its provisional New Homes Bonus allocations for 2019 to 2020

Under the bonus scheme, the government matches the council tax earned by local authorities from each new home built, converted or brought back into use over a set number of years.

It shows that the London Borough of Tower Hamlets once again has been allocated the highest payment, at £19.2 million, though this figure is down from £20.7 million last year (see table below).

Second, like last year, is the London Borough of Wandsworth, which receives £13.0 million up slightly from £12.9 million last year.

The London Borough of Southwark is third, receiving £12.8 million, a big rise on the £11.4 million it got last year.

Six of the top ten authorities and ten of the top 20 are in London, reflecting the capital's high rates of housebuilding.

The bonus figures for 2019/20 are based on the number of units added between October 2017 and October 2018. 

The calculation also takes into account a national "baseline" of 0.4 per cent housing growth, below which New Homes Bonus payments are not paid, plus legacy payments - making up the bulk of the 2019-20 payments - arising from additions to housing stock in previous years.

Hence, the size of the bonus does not directly relate to the net number of new homes built or converted in a district.

The authority that added the most units in the year up to October 2018 was Cornwall, adding 3,065 units, followed by Manchester, Leeds, Newham and Birmingham. Four of the top 10 are core city authorities and three are London boroughs.

The total payments to all authorities in 2019-20 come to £917.9 million, a drop of three per cent compared to £946.2 million in 2018-19.

Before Christmas 2016, the former housing secretary Sajid Javid announced changes to the programme, which saw £240 million cut from the scheme budget and instead diverted to a local government grant for adult social care. 

The changes included the introduction of the national "baseline" for housing growth and a reduction in legacy payments.

An analysis by Planning in January 2017 found that nearly all authorities saw their New Homes Bonus payments reduced as a result of the changes. 

In December 2017, Javid confirmed he was scrapping plans to link payments of the New Homes Bonus to a council's record at defending housing appeals and to increase the 0.4 per cent baseline for housing delivery.

The provisional 2019/20 figures can be found here.

*NOTE: The figures were updated at 11am on Wed 30 Jan to correct the 2018/19 allocations for Shropshire, Slough, Solihull and Somerset West and Taunton, which had been wrong.

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