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The New Homes Bonus Scheme under which the Government promises to match council tax revenue raised from each new home for six years will encourage more housing, says Grant Shapps Top-down, centrally-enforced targets did not get the homes this country needs built. In fact, they had quite the opposite effect. Combined with the effects of the global downturn on the construction industry, these targets contributed to house-building sinking to its lowest level for any peacetime year since 1924. Councils and residents themselves know what is best for their local area, where new homes are needed – and where they are not wanted. Yet these targets rarely, if ever, took account of this. Instead, they pitted neighbour against neighbour, and communities against developers, as strategies drawn up at a regional level dictated where new housing estates should be built, with little regard or consideration of what local people themselves thought or wanted. We needed to take action immediately to get the country building again. That's why one of the first things this Government did was suspend regional housing targets and regional spatial strategies. And it's why we are replacing these heavy-handed but fruitless attempts to get homes built with a new and innovative way of ensuring local communities see for themselves, and reap the benefits of housing growth in their area –the New Homes Bonus scheme. Under these radical reforms, the Government will match council tax raised from new homes for the first six years. Grant Shapps: ‘The Whitehall knows best' arrogance of the past is being replaced by the knowledge and expertise of residents. The New Homes Bonus will also be available for every empty property brought back into use, in recognition of what councils across the country are all too aware of – that empty homes can bring down an entire neighbourhood, attracting anti-social behaviour, vandalism and squatters, and that renovating and making these homes available for families in need can make a real difference. And in areas desperately in need of more affordable housing, there is the added bonus of an extra £350 per house premium, which will be paid for six years on each affordable house built. The Government has set aside almost £1bn to kick-start the New Homes Bonus and ensure those areas going for growth now will benefit now. In future years, these incentives will be funded from the formula grant, and once the scheme is in full swing, we expect to pay out as much as £1.5bn a year to communities across the country. This scheme offers the opportunity for significant funding to councils – each Band D home could attract payments of more than £9,000, or £11,000 for an equivalent affordable home. This means that if a council increased the number of homes by 1,000 units, this could earn a community £10m. The New Homes Bonus money can be used as the local area sees fit – so, as councillors, you will lead the conversations with your residents about what may be best for your community. It could be that you decide to use this funding for council tax discounts for local residents, boosting frontline services such as rubbish collection, or providing local facilities including swimming pools and leisure centres. Whatever you decide, it will be your – and your community's – decision. Those councils which are granting planning consents and supporting the construction of new homes where they are needed and wanted will immediately see their communities reap the benefits. The first cash payments are already being made, with 326 councils benefiting from a share of almost £200m for increasing housing stock by almost 150,000 units in this first year of the New Homes Bonus. The ‘Whitehall knows best' arrogance of the past is being replaced by the knowledge and expertise of residents and councillors in town halls the length and breadth of England. But the New Homes Bonus offers more than an opportunity to build more homes – it also offers a welcome economic boost, and offers councils and communities the resources to address and focus on other local priorities. This also presents opportunities for councils to come up with innovative ways to solving their local housing problems. For example, self-help schemes such as the Canopy Housing Project in Leeds brings empty properties back into use, often with the help of homeless people. This is a win-win for local communities and homeless people – it helps those living on the streets to get their lives back on track by learning a trade and having a new place to live, and brings a property back into use that will qualify for this additional bonus funding. Over the next few weeks and months, I expect you as councillors to be considering how New Homes Bonus funding could benefit your communities – and I expect local residents to be in touch with ideas and suggestions of their own. Grant Shapps is minister for housing and local government

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This is one bonus we do support says Shapps

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