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New Homes Bonus (Charnwood)

Volume 524: debated on Monday 28 February 2011

13. What estimate he has made of the level of funding from the new homes bonus which will be allocated to Charnwood borough council. (42497)

A provisional allocation was made to Charnwood borough council the week before last, which I announced, of £644,387 under the new homes bonus.

I thank the Minister very much for his reply. There is a real need for affordable and family-sized housing in my constituency and on the part of Charnwood borough council. How is the new homes bonus going to help councils to provide such housing?

The great thing with the new homes bonus is that it is a lot more flexible regarding the type of housing required. It will pay more where the homes are family-sized and therefore attract a higher council tax band; but in addition—I am sure that Opposition Members will welcome this—every affordable home built will receive a flat addition of £350 per year, the equivalent to about a third extra over and above the new homes bonus on other houses.

I should start by declaring my indirect interests, in line with those already mentioned by my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford).

I am sure that the people of Charnwood listened with interest to the Minister’s response, but they will not have heard him admit that Kensington and Chelsea get 52% more in funding per new home than the constituency of the hon. Member for Loughborough (Nicky Morgan), and 91% more than Hull. He also conveniently forgot to mention that the council’s revenue support grant would have to be cut to fund the new homes bonus, with money transferring from deprived areas to wealthy ones. So those areas with the greatest need for housing will not get it, while green fields in affluent areas will. Will the Minister tell us by how much Charnwood council’s and other councils’ funding will be cut to fund this policy in years 4, 5 and 6?

I am afraid that the hon. Lady may have misunderstood the way this policy operates, despite the fact that I published it the week before last. The amount that each area gets per home is exactly the same—in fact, I have equalised it across the country—so just because council tax is higher in Kensington and Chelsea there is no question of it being any different from Charnwood or anywhere else; the funding is based on the average in each different area. In point of fact, nearly £1 billion of funding has been provided for the new homes bonus which is not top-sliced off the other sums. In later years, when the money is indeed top-sliced from the formula grant, the bonus will be a positive incentive to get on and build homes—the Labour party used to encourage that.