New Homes Bonus deeply unfair says Seabeck

The Tories seem to have invented the New Homes Bonus in a panic when they realised that stripping away Labour’s regional infrastructure for housebuilding would leave them with no policy at all, see our previous comment here.  But the NHB is proving even more bizarre than we predicted. 

Yesterday, Shadow Housing Minister Alison Seabeck published her research on the distribution of the Bonus, showing the wild variations in payments across the country.  The research, confirmed by the House of Commons Library, shows that Richmondshire, in William Hague’s constituency, qualifies for a New Homes Bonus of £56,449 for adding just nine homes to their housing stock, whilst Scarborough is entitled to just £7,356 despite adding nearly three times as many.  For each additional home, Richmondshire will receive 2033% more in New Homes Bonus money than will Scarborough.

Rather like the general cuts to local authorities, the richer parts of the country do better than the poorer parts.  The 10 least deprived local authorities in the country receive over 20% more in NHB funding for each new home than do the 10 most deprived authorities.  This matters because in future years the bonus will be funded by ‘top-slicing’ the main council formula grant – so some of the country’s most deprived areas will lose out on grant in order to pay large bonuses to wealthier areas – and by 2016 the cost will be £1.2bn each year!  Research by the National Housing Federation indicated that the net impact of this policy will see the North losing £100m in funding each year.

Here are Alison’s examples:

New Homes Bonus ‘Losers’

New Homes Bonus ‘Winners’

Local

Authority

NHB per Home

Local Authority

NHB per Home

Scarborough

£294.24

Elmbridge

£2,080.05

South Lakeland

£496.96

West Berkshire

£2,082.19

Preston

£783.84

Three Rivers

£2,122.85

Barrow-in-Furness

£972.08

Chiltern

£3,694.00

Burnley

£990.37

Richmondshire

£6,272.16

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2 Responses to New Homes Bonus deeply unfair says Seabeck

  1. Pingback: Another inglorious failure | Red Brick

  2. Pingback: New Homes Bonus used to offset cuts | Red Brick

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