Questions over effectiveness of government’s £3.3bn New Homes Bonus scheme

The Government’s £3.3bn New Homes Bonus is allocating the highest proportion of funding to areas where approvals are still falling.

The £1.3bn which has so far been delivered to participating local authorities since the scheme launched in April 2011 is having a negligible impact on approval figures, according to the FT.

The New Homes Bonus scheme pays local councils to increase both the number of new homes and the number of long-term empty homes brought back into use. It is paid each year for six years according to the amount of extra council tax revenue raised from introducing or re-introducing new homes.

Research compiled by a former Labour housing minister Nick Raynsford suggests the money may have been allocated to regions where homes would have been built anyway and the 17 regions which received more than £10m have seen a decline in approvals.

The FT’s data for the 15 councils where comparable figures exist notes a 6 per cent drop in approvals for large residential schemes between 2010-11 and 2011-12, from 565 to 531.