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Controversial New Homes Bonus pays out £3.4bn

by: Paul Robertson
  • 17/12/2014
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Controversial New Homes Bonus pays out £3.4bn
Councils have received almost £3.4bn through the New Homes Bonus for building over 800,000 more homes, in a scheme threatened by the Labour Party as “regressive”.

The New Homes Bonus is a government scheme encouraging local authorities to grant planning permissions for new houses in return for additional revenue.

However, on 12 December Labour pledged to end the “complex, regressive and ineffective” scheme, with the funding reallocated more fairly within local government.

Labour noted the National Audit Office found no persuasive evidence that it is incentivising new house building and the Public Accounts Committee has questioned its effectiveness and fairness of its distribution, calling for an urgent review.

Since the bonus was introduced in April 2011 the government claims more than 700,000 homes and conversions have been provided, and over 100,000 empty properties returned to use. This has lead to councils receiving almost £3.4bn, including a £15m premium for providing affordable homes.

In the year to October 2014, councils allowed 154,000 new homes and conversions, with 10,000 empty homes back in use.

Communities minister Stephen Williams said: “But I want councils to go even further, and use the range of powers we’ve put in their hands to end the blight of empty properties in our neighbourhoods.”

Steve Turner, head of communications at the Home Builders Federation, which works to develop housing policy in the UK, said: “This scheme was designed to influence local authorities to grant planning permission. The Labour Party would still need a new way to incentivise building”

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