Castle Point’s choice – Develop Green Belt or Funding for “Vital Services” will be Cut!

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.

Housing

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!

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2 responses to “Castle Point’s choice – Develop Green Belt or Funding for “Vital Services” will be Cut!

  1. Editor
    This and more information can be found within the DCLG document:-
    “New Homes Bonus: Sharpening the Incentive”

    Government Response to the Consultation which interestingly CPBC are not listed as responders.

    Government Response & Next Steps

    29. The Government will implement: • a move to 5 year payments for both existing and future Bonus allocations in 2017/18 and then to 4 years from 2018/19; and • the introduction of a national baseline of 0.4% for 2017/18 below which allocations will not be made.
    30. The Government will also retain the option of making adjustments to the baseline in future years to reflect significant and unexpected housing growth.
    31. Taken together these measures meet the aims set out in our consultation paper to sharpen the incentives for housing growth, release funding for other Local Government spending priorities such as adult social care.
    32. As the Government is implementing wider planning reforms to get the nation building the homes it needs, including measures announced at Autumn Statement and through the Neighbourhood Planning Bill and forthcoming Housing White Paper, we will not introduce the proposals to withhold payments for areas without a local plan in 2017-18.
    33. However, the Government will revisit the case for withholding New Homes Bonus from 2018-19 from local authorities that are not planning effectively, making positive decisions on planning applications and delivering housing growth. To encourage more effective local planning we will also consider withholding payments for homes that are built following an appeal.
    34. The Bonus will continue to be an un-ringfenced grant 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. However, the Government reaffirms that we expect local authorities to engage with their local community to decide how the money is spent, so residents feel the direct benefits of growth.
    35. Government is clear in its commitment to protecting the Green Belt. Local Authorities may only alter Green Belt boundaries in exceptional circumstances. Where local communities do make the difficult decision to permit the building of homes on small areas of Green Belt land, it would be very unfair to penalise them by withholding funding from the New Homes Bonus. The reforms to the ‘Bonus’ set out herein do not alter this approach.
    36. Allocations for 2017/18 have been made using the data returns from the Council Tax Base forms, the DCLG Official Statistics on additional Affordable Housing Supply and the Traveller Caravan Count in the usual manner and are being announced alongside this document as part of the Local Government Finance Settlement

  2. No agreement to further green belt development until a referendum put out by Council explaining the Governments ultimatum and asking whether to go ahead or not

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