The New Homes Bonus is being used primarily to offset cuts in local authority grants, and not to help increase affordable housing supply.
That’s the conclusion to be reached from the latest piece of propaganda from the Department for Communities and Local Government, which reports (I think we are meant to be impressed) on the uses to which the first payments of the New Homes Bonus – £200m in April 2011 – have been put.
There have already been complaints that the distribution of the bonus is unfair and does not help deprived areas as much as it should. As a report on progress, the latest document includes no statistics and it has no overall analysis. However it claims that the Government wants to ‘encourage innovation’ and it includes a ‘ready reckoner’ which makes it clear that the Government does not expect the NHB to be used to boost housing investment but to offset and defray cuts in mainstream service grants. The ready reckoner tells us
- 800 new homes could ensure two Sure Start children’s centres remain open;
- 180 new homes could pay for a day centre to care for the elderly to be kept open;
- 100 new homes could cover the cost of two trained child social workers and two full time hospital nurses for one year;
- 30 new homes could save your small public library from closure;
- 15 new houses could pay for two cricket training nets to be installed.
The document mainly uses ‘case examples’ to show how the money has been used or is proposed to be used. Examples include:
- Elmbridge – includes ‘funding for other charitable groups … affected by the cuts in government funding’ and ‘funding for public libraries under threat of closure’,
- Wychavon – 40% passed to parishes to spend on community facilities – for example, village hall improvements, flood protection, bus subsidies, play areas, allotments and green initiatives.
- The Vale of White Horse District Council – ‘using the Bonus to introduce free car parking to the three market towns’
- Bath and North East Somerset Council ‘used the Bonus to help tackle a £12m savings target and protect priority frontline services.’ Includes street cleaning, libraries, paying for foster care places.
- Rugby Borough Council – NHB ‘has meant that front line services have been maintained and in some cases enhanced.’ Includes refuse collection and Leisure Centre.
Two councils show how the NHB could be used to further enhance housing and other investment:
- Sheffield City Council – use NHB ‘to promote housing and economic regeneration and minimising the number of long term empty properties.’
- Plymouth City Council – ring-fence NHB as part of the Plymouth Growth Fund which ‘aims to increase the city’s population by 50,000; create 42,000 new jobs; and deliver 30,000 new homes.’.
Although the Government has always said the money will be not be ringfenced, many people believe that a housing-related payment should be used for housing-related purposes. Using most of the money to offset cuts in such a blatant way is an abuse of the scheme. I wonder if Eric Pickles and Grant Shapps actually noticed that affordable housing starts fell by more than 90% in the first 6 months of this year compared to the previous year?