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Fresh doubt cast on council tax plan

Housing associations have warned that council tax incentives will fall well short of replacing the 100,000-
plus homes now mothballed by councils since regional targets were scrapped in July.

Housing minister Grant Shapps last month said the government would match the first six years of council tax receipts for every new house built in England.

The New Homes Bonus would be worth to a total of about £8,500 for a new Band D home.

But the National Housing Federation, which represents housing associations, said the government’s proposed incentives were poorly targeted, and too low to make up for the abolition of the Regional Spatial Strategies.

A report commissioned by the NHF last week found that 100,000 planned homes had been scrapped since RSS was abandoned.

NHF policy officer Brian Robson said the council tax policy would see county councils reap the benefits,
while district councils would be responsible for making planning decisions.

“The incentives will turn up in the wrong place,” he said.

“And we have done some calculations of our own that suggest that matching council tax is a very small part of councils’ budgets.”

Jamie Sullivan, research director at Tetlow King, which carried out the research for the NHF, said councils were under “enormous political pressure” to lower housing targets, and that 100,000 mothballed homes was a bestcase
scenario.

He said: “The 100,000 figure is a very conservative estimate. And they will not come back. These incentives will not be enough.”

According to Tetlow King’s research, 10,750 homes have been scrapped since July in North Somerset alone.
The Home Builders Federation, which represents housebuilders, warned that the policy vacuum until the New Homes Bonus becomes law during the next Parliament would make the situation worse.

Mr Sullivan agreed. “Both Aylesbury Vale and Leeds councils have said that one of the reasons they have cancelled work is that they don’t know how much money they are going to get,” he said.

Mr Shapps has previously insisted: “Central housebuilding targets and regional spatial strategies don’t build homes.

“Under the previous government the number of new homes being started slumped to the lowest levels since 1924. Top-down targets and bloated bureaucracy haven’t worked.”