Housing minister Grant Shapps has today pledged nearly £1bn of funding for councils that give planning permission for new housing development.

In the proposals for the New Homes Bonus, which are now open for public consultation, the government will match the council tax raised from new homes for the first six years after completion.

Councils will be able to decide what they choose to spend the cash on which could include council tax discounts for local residents, boosting frontline services like rubbish collection or providing local facilities like swimming pools and leisure centres.
 
All homes that are built will benefit from the new funding and councils will also receive a higher level of funding for building new affordable homes. Councils will receive a £350 additional supplement per affordable home each year for six years.

Today’s announcement follows the Government’s commitment to invest £4.5 billion in affordable housing over the next four years, which will deliver up to 155,000 new affordable homes

Shapps said:

“We are ending the system where the Government can tell communities what and where to build – that top-down approach slowed housebuilding to a trickle, so we need to take action now to get the country building again. That’s why we’ve set aside almost £1bn so councils who build more homes start benefiting immediately from the extra cash, which they can spend on improving the local area.

“For too long communities have fought against development because they can’t see how it does anything to improve their lives. I’m determined to change this. The New Homes Bonus will ensure that those communities that go for growth reap the benefits of development, not just the costs.

“Councillors will now be able to lead a mature debate about the benefits of development. And rather than being punished for not meeting targets, local communities will now have a reason to say yes to new homes, because they will benefit from better local services, or perhaps the redevelopment of their town centre in return for backing new housing.”

Executive chairman of the Home Builders Federation, Stewart Baseley welcomed the plan. He said:
 
“The country is facing an acute housing crisis and it is imperative we have a planning system that delivers sufficient land for the homes we need. The New Homes Bonus is an essential part of the new incentive based structure and we welcome the commitment to a simple, easy to understand system.”

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