We were recently reminded by a senior cabinet member how important the funding revenue received from house building was to Castle Point Council.
He clarified how the scaling down of direct Government funding to local authorities made the necessity of New Homes Bonus payments a vital source of income.
We heard the CPBC Cabinet member responsible for finances state that;
Currently local authorities receive the New Homes bonus on every new dwelling developed.
The Government will expect a Base Level of Housing Growth.
In Castle Point this Base Level of Housing Growth equates to NOT receiving any New Homes Bonus funding until 120 new dwellings are Developed in the Borough!
The Castle Point Local Plan2016 seeks to supply 100 new dwellings per annum, some way short of the Base Level of Growth sought by Government.
Previously local authorities received monies against every new dwelling developed!
The New Homes Bonus (‘the Bonus’) was introduced in 2011 to provide a clear incentive for local authorities to encourage housing growth in their areas. It rewards local councils for each additional home added to the council tax base, including newly built properties and conversions as well as long term empty properties brought back into use, after deducting demolitions.
The Bonus is an unring-fenced grant paid by central government, which allows local authorities to decide how to spend it, for example on frontline services or keeping council tax down, as we recognise that local authorities are in the best position to make decisions about local priorities.
Local authorities are expected to engage with their local community to decide how the money is spent, so residents feel the direct benefits of growth.
Starved of Central Government Funding, the council are between a rock and a hard place with the government very cleverly requiring councils to hold a referendum as to whether it would be acceptable to increase council tax in order to maintain societies fundamental requirements.
This equates to an inevitable increase in council tax, or more development, or less “vital services”!
Your choice !
It may also imply that unless the said cpbc cabinet member for finances can balance his budget, in light of the reducing funding streams, the Local Plan2016 Examining Inspector may also be required to include the council’s budget, against the projected Housing Supply of 100 new dwellings per annum contained in the Plan, within his Test of Soundness!