Another Inglorious Failure

The New Homes Bonus scheme was meant to be a reward to councils that encouraged housebuilding. There was some Treasury funding at first but the main method of funding was to ‘top slice’ normal council grants. There was therefore always going to be a redistributive effect from some councils and to others. Analysis in the Financial Times concludes that the NHB ‘has shifted cash from poor northern councils to rich areas in the south with little evidence that it has boosted homebuilding.’ The FT quotes the National Audit Office finding that there is ‘little evidence’ that the bonus has change councils’ behaviour in terms of planning, contradicting ex Minister Mark Prisk’s claim that it would bring about ‘at least 400,000 additional homes’. According to the authors, NHB has cost £2.2 billion so far – which happens to be 50% more than the annual affordable grant programme. For that money, to justify itself the policy should be delivering major improvements in housing approvals and delivery. It plainly isn’t. Read more on the Red Brick blog.