Reform of the New Homes Bonus regime could see payments end for planning authorities who do not have a local plan in place…
Proposed changes to the New Homes Bonus could have a significant impact on local planning authorities.
The New Homes Bonus is a grant paid to local councils for increasing the number of homes. Currently, it is paid each year for six years and is based on the amount of extra council tax revenue raised for new build homes, conversions, and empty properties brought back into use. An extra payment is also given for providing affordable accommodation.
During 2015 to 2016 the allocation for the fund stood at £1.17bn, bringing the total to almost £3.4bn over the five year period between 2011 and 2016. The Department for Communities and Local Government provided around £1.2bn of that additional grant.
Local councils have the power to decide how to spend the bonus. However, there is an expectation from central government that councils will consult with communities as to where that money should be used.
Ministers are currently considering reforms to this bonus scheme, which would not only see planning authorities without a local plan lose out, but could also see the payment term reduced from six years to four or less.
The consultation paper asks if there should be a baseline for when payments should be made. This figure could be based on a national figure or an average local output over a period of time.
The consultation, which will end on 10 March, will not bring any changes agreed into force until 2017-18. It will focus on how to deliver more new homes, as well as “freeing up resources to be recycled within the local government settlement to support authorities with particular pressures, such as adult social care, following the outcome of the 2015 Spending Review”.
Details of the consultation can be viewed here: New Homes Bonus: sharpening the incentive: technical consultation.
