Today, I am pleased to announce £916 million of provisional new homes bonus funding for local councils in England. The new homes bonus rewards the delivery of additional homes and is a powerful, simple and transparent incentive for housing growth.
I hope this funding will be welcomed by councils at a time when new orders in residential construction have risen to their highest level since 2007 according to Office for National Statistics figures published last week1. This is in stark contrast to the last Administration, when house building fell to its lowest peacetime rate since the 1920s. Top-down regional strategies and eco-towns failed hardworking families who aspired to own their own home, building nothing but resentment.
As I noted to the House in my recent answer of 2 December 2013, Official Report, column 558W, the new homes bonus ensures that those councils which promote and welcome local growth can share in its economic benefits, and support the communities in which people want to live and work. This money is not ring-fenced and so councils are free to spend the bonus as they choose, including on providing new facilities, protecting frontline services and freezing council tax.
The bonus is based on the council tax of additional homes (net of demolitions) and long-term empty homes brought back into use in the 12-month qualifying period, with an additional premium for affordable homes. The increase for 2014-15 will be paid in respect of 133,000 homes and 37,000 long-term empty properties brought back into use. The affordable homes premium is £15 million in respect of 42,830 new affordable homes.
These allocations bring the total amount of funding awarded under the new homes bonus since it began in April 2011 to over £2.2 billion. This total recognises delivery of almost 550,000 homes, over 93,000 long-term empty properties brought back into use and provision of over 160,000 affordable homes, in that period. This also reflects the success of this Government’s comprehensive programme to get empty homes back into productive use.
There are many good examples of local councils using the bonus in a variety of ways. For example, south Northamptonshire council reinvests affordable housing premiums into new community projects. South Lakeland district council has approved grants totalling almost £80,000 to support projects identified by organisations across the district such as improving footpaths, renovating buildings, and enhancing play areas. And Test Valley borough council is delivering a new £140,000 urban sports facility for Andover, funded by a mix of developer contributions and the new homes bonus. It has also launched a £300,000 community asset initiative, funded from the bonus, to support community-led projects. Other councils will simply be using the money to help freeze council tax and/or support local services.
Local authorities will have until 10 January 2014 to make representations on their provisional allocations. The Department has written to local councils with details for making representations on their authority’s provisional allocations. Final allocations are due in late January/early February next year.
A full list of the provisional allocations and local figures to assist hon. Members is being placed in the Library of the House.
1ONS Output in the Construction Industry statistics, October 2013 (Published 13 December 2013).