Housebuilding incentive for councils announced

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Councils will be offered a financial incentive to help get communities behind their efforts to stimulate house building, as part of government plans unveiled today.

Announcing the New Homes Bonus, housing minister Grant Shapps said councils that give planning consent to new homes ‘where they are needed and wanted’ would receive extra funding to spend as they wish.

Local authorities could use these ‘direct and substantial’ bonuses to offer council tax discounts to residents, boost frontline services or improve local facilities.

The government hopes the New Housing Bonus, which will be introduced early in the Spending Review period, will address the current decline in housebuilding.

Mr Shapps said: ‘We will not tell communities how or where to build, or how they should grow. But the New Homes Bonus will ensure that those communities that go for growth reap the benefits of development, not just the costs.’

In a letter to councils Mr Shapps also confirmed the government is working on business rate reforms to encourage economic development, as well as revising the Community Infrastructure Levy to provide an ‘even clearer incentive to develop’.

The government is inviting the views of councils, communities and industry as it finalises the New Homes Bonus plans. A consultation paper on the final scheme will be published following the spending review.