Press release

Councils receive £3 billion reward for getting the country building

This news article was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Councils have received almost £3.4 billion through the New Homes Bonus for building over 800,000 more homes, Housing Minister confirms.

Councils have received almost £3.4 billion through the New Homes Bonus for building over 800,000 more homes, Housing Minister Brandon Lewis confirmed today (17 December 2014).

The minister said the figures demonstrated how more communities were saying ‘yes’ to new development, after planning reforms have put power back into the hands of local people.

It comes as new figures show that in the year to September, planning permissions have risen to 240,000 - showing that the locally-led system and incentives like the New Homes Bonus are working well.

Seeing the benefits of growth

In the year to October 2014, councils have helped provide 154,000 newly-built homes and conversions – including over 42,000 new affordable homes - and brought over 10,000 empty homes back into use. Mr Lewis today announced the provisional allocation of £1.2 billion New Homes Bonus to councils in England in recognition of this.

Since the New Homes Bonus was introduced in April 2011 more than 700,000 homes and conversions have been provided, and over 100,000 long term empty properties returned to use - leading to councils receiving almost £3.4 billion, including a £15 million premium for providing affordable homes.

Councils are free to spend the money as they see fit to benefit the local area – including freezing Council Tax.

Housing Minister Brandon Lewis said:

We’ve got the country building again and given local communities control over where new homes go in their area. This is in stark contrast to the housing crash and failed top-down regional strategies of the last government.

Councils have received more than £3 billion for their part in getting Britain building, and as a result housing construction has reached its highest level for 7 years.

All local authorities are free to spend the money however they like to benefit their local communities – whether that’s supporting frontline services, providing new facilities or freezing Council Tax.

Communities Minister Stephen Williams said:

I’m delighted to see the number of long term empty homes going down with 100,000 being brought back into use. Today’s New Homes Bonus payments are in recognition of council-led efforts to make this happen.

But I want councils to go even further, and use the range of powers we’ve put in their hands to end the blight of empty properties in our neighbourhoods and bring them back into productive use for the families who need the stability and security new home can provide.

Councils across the country have made the most of this additional funding to ensure their communities directly see the benefits of growth in their areas. This includes:

  • Braintree council, who have allocated £750,000 of their Bonus to affordable housing, and are investing £5 million in major infrastructure projects and projects which could stimulate housing growth, including improvements to the A120
  • South Gloucestershire council, who give grants to voluntary, community and social enterprise organisations and town and parish councils to support them with their projects
  • Sheffield City council, who have used part of their New Homes Bonus to give a £1.6 million loan, allowing the development of 6 housing sites totalling 500 homes to be brought forward sooner than originally planned

Getting the country building again

Today’s allocations come at the same time as a an evaluation report on the New Homes Bonus to date. It considers the effect of the Bonus on the attitudes and behaviours of key figures, the financial impact of the Bonus on local authorities, how Bonus receipts are being used and other issues. The evaluation finds that:

  • almost 50% of planning officers agreed the Bonus was a powerful incentive for supporting housing growth
  • the Bonus is seen to be providing to its stated principles of being simple, transparent and flexible
  • in 2014 to 2015, 75% of local authorities are net gainers from the New Homes Bonus policy
  • the New Homes Bonus is largely matching the distribution of housing need
  • the policy is particularly helping to reduce the number of empty homes
  • it has strengthened the links between housing, planning and finance for councils
  • the Bonus is contributing to a more strategic and co-ordinated approach to housing provision within authorities and is one of a number of factors encouraging and supporting a more proactive approach to house building
  • the policy was supporting more positive attitudes towards new homes; the financial incentive and positive impact on attitudes is expected to further rise in time as the policy works it way through local plan-making

Further information

View details of the provisional allocation of this year’s New Homes Bonus payments to councils.

London boroughs will pool a proportion of their 2015 to 2016 New Homes Bonus allocation to the London Enterprise Panel, the local enterprise partnership for London. Pooled funds will be spent in borough areas in support of London Growth Deal priorities.

Councils now have until 14 January 2015 to respond to these provisional allocations, with final allocations due later in the New Year.

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