Council tax to fall as new homes are built
CASH bonuses will be given to town halls as part of a pioneering Government bid to get them to build thousands of new homes across Britain.
Housing Minister Grant Shapps will tomorrow unveil a revolutionary approach by offering a payment for every new home in the UK.
Local authorities will be allowed to use the New Homes Bonus for any purpose they wish, from improving frontline services like rubbish collection, to creating new facilities such as playgrounds or slashing council tax bills for residents.
The move comes after the coalition Government scrapped Labour’s failed house building targets which saw the level of new homes being built slump to its lowest peacetime level since 1924.
With councils facing cuts in their budget of up to 20 per cent over the next four years, the New Homes Bonus will provide a vital boost to authorities prepared to make home building a top priority. Mr Shapps told the Sunday Express that the Government was giving town halls the power to make decisions about how many homes should be built in their area.
“We will not tell communities how or where to build. However, the New Homes Bonus will ensure that those communities that go for growth reap the benefits of the development, not just the costs,” he said.
The proposal will see the Government match the additional council tax raised by every new house built for the next six years.
That means a substantial cash boost. The average Band D council tax bill for this year is £1,439 so if an authority grants planning permission for 100 Band D homes, that would raise an additional £863,400 for it to spend in its area.
Ministers are even considering upping the payment for affordable homes to 125 per cent of the council tax raised.
In a letter to all local authorities tomorrow, Mr Shapps urges town hall bosses to “seize the moment”. He said: “With house building falling to its lowest level since 1924 under the previous government, action is needed now to build the homes the country needs. That’s why these new powerful incentives to build will be introduced early in the Spending Review period.
“And it’s why I have confirmed that those councils who go for growth by providing planning permission now will reap the rewards.
“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 Homes Bonus.”
Communities Secretary Eric Pickles last month abolished Labour’s “Soviet” house building targets which called for three million new homes to be built by 2020.
The Government’s new approach is detailed in its Green Paper, “Control Shift – returning power to local communities”.
There will be a consultation exercise after the Comprehensive Spending Review in October.
