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New Homes Bonus

Volume 575: debated on Monday 3 February 2014

I refer to my written ministerial statement of 16 December 2013, Official Report, columns 69-70WS announcing provisional new homes bonus allocations for local authorities.

The representation period closed on 10 January 2014. We received 22 representations. These have been taken into account in finalising the figures.

We will pay almost £917 million of new homes bonus for local authorities in England. This includes instalments from the previous three years of the bonus.

These allocations bring the total amount of funding awarded under the new homes bonus since it began in April 2011 to £2.2 billion. This total recognises delivery of almost 550,000 homes, and over 93,000 empty properties being brought back into use.

The bonus will be paid in respect of 171,000 homes from October 2012 to October 2013 including 133,000 extra homes and 38,000 long-term empty properties brought back into use. The allocations also include an affordable homes enhancement, which totals £15 million in respect of 43,000 new affordable homes.

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. Each year’s bonus award is paid for six years. 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. This Government introduced the new homes bonus as a permanent part of the local government finance system. This is the fourth year of payments on the same basis as the original policy and the Government will maintain the bonus as an important incentive for councils to build more houses for their communities. We will continue to pay the bonus in the future to ensure that places that have built houses are properly rewarded for doing so.

Authorities can choose to spend the money as they see fit, from providing new facilities, to protecting front-line services or simply freezing council tax. The incentive of the new homes bonus is complemented by the local retention of business rates and community infrastructure levy, to ensure that local communities can share the benefits of new development.

The Department is writing to local authorities confirming their final allocations and I am writing to all Members of Parliament and local authority leaders in England.

A full list of the allocations is being placed in the Library of the House. Further information on the bonus can be found at:

https://www.gov.uk/government/policies/increasing-the-number-of-available-homes/supporting-pages/new-homes-bonus