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New Homes Bonus

Volume 555: debated on Monday 10 December 2012

Today, I am pleased to announce £661 million of provisional new homes bonus funding for local authorities in England. This includes the third instalment of £199 million in respect of year one, the second instalment of £232 million in respect of year two, and £230 million for housing growth in year three of the bonus.

The bonus will be paid in respect of 142,000 homes and 13,000 long-term empty properties brought back into use in the last recorded year. The allocations also include the second affordable homes bonus, which totals £20.3 million in respect of 58,000 new affordable homes in the last recorded year.

These allocations bring the total amount of funding awarded under the new homes bonus since it began in April 2011 to almost £1.3 billion. This total recognises delivery of over 400,000 homes, and over 50,000 empty properties being brought back into use.

The new homes bonus is a powerful, simple and transparent incentive for housing growth. It is a key part of the housing growth focus of our national housing strategy. Commenced in April 2011, the bonus is based on the council tax of additional homes and those brought back into use, with an additional amount for affordable homes, paid for the six years following delivery. It ensures that those local authorities which promote and welcome growth can share in its economic benefits, and build the communities in which people want to live and work.

The bonus is a flexible, unring-fenced fund, which can be used to support front-line services, to provide housing infrastructure or to keep council tax down. Local authorities are best placed to understand the barriers to growth in their areas, the needs of their local communities and lead a mature debate about the benefits that growth can bring.

There are already good examples of local authorities using the bonus in a variety of ways. For example, Warwick council have developed a joint venture partnership with the Waterloo Housing Group to deliver over 1,000 new affordable homes, and will ring-fence and recycle back into the scheme all new homes bonus payments generated by additional new homes built. Leicestershire county council is using its new homes bonus funding to work with its district authorities to provide 60 affordable homes in rural areas.

The new homes bonus forms an important part of the Government’s proposals to allow local authorities to benefit from economic growth by allowing them to keep a proportion of their business rates.

Local authorities will have until 7 January to make representations on their provisional allocations. The Department has written to local authorities with details for making representations on their authority’s provisional allocations. We have asked for some further details from 29 authorities regarding the data they have provided in respect of empty homes brought back into use. We will consider their response as part of the wider representations process on provisional allocations. As such, the figures above do not include an amount for empty homes for those authorities. Final allocations, due in late January/early February next year, will include a full allocation for all elements of new homes bonus.

A full list of the provisional allocations is being placed in the Library of the House. Further information on the bonus, including the second new homes bonus bulletin Unlocking the Bonus can be found at: