On 17 February 2011, the Department for Communities and Local Government (DCLG) published its final scheme design of the New Homes Bonus scheme.
The publication of the final scheme design follows last November’s consultation on the New Homes Bonus scheme (click here for further details.)
The final scheme design confirms that:
1. The affordable housing definition used for the scheme will be the one set out in Appendix B of Planning Policy Statement 3 (see page 17 of the final scheme design);
2. The New Homes Bonus scheme will apply to homes brought back into use as well as new homes. This fulfils the Government’s pledge in its Coalition Agreement to help bring empty properties back into use;
3. In two-tier authority areas, 80 per cent of the bonus will be paid to the lower tier and 20 per cent to the upper tier, as a starting point for local negotiation. In London, 100 per cent of the bonus will go to the London borough.
4. The New Homes Bonus will be paid alongside the local government finance timetable and it will not be ring-fenced. This means that provisional allocations will be announced in early December and final allocations in early February; and
5. The Council Tax Base Form will be used to calculate increases in housing stock.
However, the final scheme design (and housing minister Grant Shapps in particular) have received criticism from all sides. Developers have complained that the scheme does not go far enough, whilst the Campaign to Protect Rural England has claimed that moves to financially incentivise councils to build more homes could be unlawful. It has suggested that any planning permission given for new housing that is linked to the new homes bonus could conceivably be overturned in a judicial review.
The last thing that developers need is more uncertainty, so it is essential that the Government clarifies the situation as soon as possible.