Councils to get cash bonus for new homes

Councils will receive extra funding for having new homes built in their areas, the government announced today.

A ‘New Homes Bonus’ will be given to councils that give planning consent and support the construction of new homes, housing minister Grant Shapps said. It is intended to put an end to the decline in house building which is now at its lowest peacetime level since 1924.

The bonus will be in the form of direct and ‘substantial’ extra funding for councils to spend as they choose. The government suggested the cash might be used for council tax discounts for local residents, boosting frontline services like rubbish collection or improving local facilities like playgrounds.

Shapps said: ‘We will not tell communities how or where to build, or how they should grow.

‘I urge councils to seize the moment and open up a debate with their communities now about the new homes they need and how they would use the new bonus.’

New homes

The government is pumping money into house building by making reductions in other areas of spending. It was recently announced that cuts in other government department spending will make £390million available to Shapps’ Department for Communities and Local Government to build 4,500 social rented homes, over 3,000 homes for sale at affordable prices and 1,000 stalled by the recession. This is on top of £170million already made available to build 4,000 new social homes.