5th
Nov 2013
The PAC’s (Public Accounts Committee) inquiry into the New Homes Bonus reports that South East England is gaining more from the financial opportunity than any other region in the country.
The New Homes Bonus was launched in 2011 by the Department for Communities and Local Government Department, which is a non-ringed fence grant to incentivise Councils and Town Halls to add more homes to their Council Tax register, by allowing more homes to be built.
Because the scheme comes out the Governments central pot of core funding for local authorities, means that there is danger many of these losing out on funds because developers will choose where they will want to build and “shy away” from deprived areas.
The committee highlighted this and are extremely concerned that poorer regions will have their funding cut to make way for the new home build in more affluent areas.
PAC chair Margaret Hodge said: "So far the areas which have gained most money tend to be the areas where housing need is lowest. The areas that have lost most tend to be those where needs are greatest."
Great Grimsby MP Austin Mitchell said: "The scheme is shoveling money into the south … and far less into the north. We need to stimulate development evenly over the whole country to bridge the north-south gap, and housing is a stimulus to the economy, so why is the south getting so much more?"
However Sir Bob Kerslake, Permanent Secretary at the Department for Communities and Local Government disagreed with the inquiry’s findings and said he was “disappointed” by the report and has “some significant disagreements” with its findings.
He said: “We have made very clear that our review of the New Homes Bonus is underway and the groundwork will be completed by Easter 2014 as we have always promised.
“The whole point of the New Homes Bonus - which the committee fails to recognise - is to recognise housing growth where it occurs, with money going where those homes are needed most. That’s why we’ve committed £1.2 billion over 5 years towards this scheme, which the National Audit Office itself found has the potential to deliver up to 100,000 additional homes over 10 years.”
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