The National Federation of Builders supports criticism of the New Homes Bonus
The National Audit Office has slammed the New Homes Bonus, suggesting it is having an insignificant impact on the availability of housing.
The bonus is a form of grant paid by central government to local councils if they can demonstrate an increase in the number of accessible homes. This increase in available homes is made evident through the additional council tax revenue received from new builds, conversions and homes that have stood empty for long periods of time. There are also additional incentives for councils that can offer affordable homes.
The National Audit Office considers the government’s claim that the scheme would increase the supply of housing over ten years by 13 per cent over ten years to be unrealistic and based on a "substantial arithmetical error".
In support of this critique, Julia Evans, chief executive of the
National Federation of Builders, said: “The New Homes Bonus was always seriously flawed as an incentive as there is no threshold target to meet in order to qualify for payments.
“As a result, seriously under-performing authorities with housing targets that grossly under-provide, can still be paid on exactly the same basis as an authority that has made full provision.
“Moreover, many of the worst under-performing authorities are relatively wealthy and the bonus is insufficient to influence their behaviour.”
