The government is seeking to save up to £1bn per year by cracking down on nimby councils with New Homes Bonus reforms that aim to “sharpen the incentive”.
The Department for Communities and Local Government is consulting on reducing or scrapping payments where new housing is approved only on appeal; withholding the bonus from councils without local plans; and reducing the payment period from six to four years.
The bonus was introduced in 2011 to encourage councils to build more homes by awarding payments based on the council tax band of each new home.
Long-term empty properties brought back into use are also included and there is a premium for affordable homes. Each year’s grant is paid for six years and the bonus is not ring-fenced.
If the measures were fully implemented, they would cut New Homes Bonus payments from a forecast £1.7bn in 2020-21 to less than £700m, according to DCLG estimates.
More than £3.4bn has been allocated since the introduction of the New Homes Bonus.
Martin Curtis, former Conservative leader of Cambridgeshire County Council, said: “Getting the bonus only if councils approve developments is an incentive to get rid of some of the nimbyism that exists in councils that side with communities and are looking for reasons to say no.”
Steve Sanham, development director at residential developer Hub Group, said he supported the measure. “It was a perverse quirk that authorities would still be rewarded by the New Homes Bonus on a scheme they had declared they did not want in their borough,” he added.
Simon Ricketts, partner at King & Wood Mallesons, said the bonus rarely played a material role in planning talks, but welcomed the reforms, which would take effect from 2017-18.
The consultation closes on 10 March.
• To send feedback e-mail louisa.clarence-smith@estatesgazette.com or tweet @LouisaClarence or @estatesgazette
