My recent Blog Posts looked at the implications for revenue and capital budgets and ultimately the council Tax payer if Central Bedfordshire Council were not to receive the Government and housing development income it has forecast. This post sets out the implications for residents due to changes in the Government’s New Homes Bonus (NHB) funding stream.
The New Homes Bonus was introduced in 2011 to provide a clear incentive for local authorities to encourage housing growth in their areas. It rewards local councils for each additional home added to the council tax base including newly built properties and conversions as well as long term empty properties brought back into use.
The New Homes Bonus is not ring-fenced and is grant paid by Government which allows local authorities to decide how to spend it, for example on frontline services or keeping council tax down, as Government recognises that local authorities are in the best position to make decisions about local priorities. Local authorities are expected to engage with their local community to decide how the money is spent, so residents feel the direct benefits of growth. Over the duration of the New Homes Bonus scheme the Council has been in the top 20 of all 350 local authorities receiving the bonus. According to recently published Department of Communities and Local Government figures the total bonus the Council will have received by the end of 2017 is £11 656 884.
The Council will publish its draft Local Plan towards the end of March. The plan is set to increase housing development to unprecedented levels because the Council has chosen to build more houses than are needed to meet the population growth needs of the people of Central Bedfordshire. Approximately 55% of the housing proposed in the draft Local Plan will be for people from London, North Hertfordshire, Luton, and Milton Keynes. The impacts of housing development on Central Bedfordshire’s towns, open spaces, the green belt, the Chilterns Area of Outstanding Natural Beauty, heritage and natural assets will be disproportionately high compared with other authorities nearby, for example Northamptonshire, Hertfordshire and Buckinghamshire. Clearly the Council wants to continue to approve unnecessary, unwanted and harmful development to secure more New Homes Bonus from what will become an increasingly smaller funding stream. As the number of houses built in Central Bedfordshire increases and the amount of New Homes Bonus decreases the pressure on the Council Tax payer to provide funding to support unnecessary development and road infrastructure will increase.
On what services has the Council been spending its New Homes Bonus? Over the first 5 years of this funding stream the Council has levied 0% Council Tax to the detriment of its adult social healthcare provision. Has the Council engaged with the local community to decide how the New Homes Bonus is spent? Have you been asked what services you want the bonus spent on? Has your community directly benefited from the New Homes Bonus? Currently Parliament is being petitioned by campaign groups across the country. The petition asks Parliament to ‘Give communities back the right to decide where house are built’. If you agree you can sign the petition here at https://petition.parliament.uk/petitions/177333
Additionally the Council’s track record on engaging with the people of Central Bedfordshire on how other funding streams are spent is woeful. Recently the people of Potton have had unwanted development foist upon them and any S106 funding from this development earmarked for spending on infrastructure developments in Biggleswade. The Council has also steadfastly failed to introduce a Community Infrastructure Levy scheme that would benefit communities with Neighbourhood Plans and that would give them direct control on what the levy is spent on rather than the Council deciding on how the levy should be spent.
The Government intends to stop the New Homes Bonus for housing approved on appeal. The consequence of this has been the approval of unnecessary and harmful development in Potton and Blunham. As the Council has chosen to meet the housing growth needs of other local authorities the Council currently does not have a 5 year housing land supply. Recently the Council has lost an appeal against its decision to refuse planning permission for housing at Flitton. One reason for losing the appeal was the lack of a 5 year housing land supply. The portfolio holder for Regeneration and his deputy recently intervened in the Development Management Committee’s decision making process. The committee were about to decide whether to approve housing at Potton and Blunham. Both the portfolio holder and his deputy told committee members to approve both developments because if the committee were to refuse planning permission developers would appeal their decision on the basis of a lack of a 5 year housing land supply and as a consequence the Council would lose New Homes Bonus income.