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Local authorities losing out on millions as New Homes Bonus funding revealed

Developers were today handed a new tool to challenge councils after the Home Builders Federation published figures showing how much each area was missing out on in potential New Homes Bonus payments.

The first figures for the government’s flagship housebuilding incentivisation scheme showed councils were losing millions of pounds of central government funding by failing to build sufficient homes to meet their population projections. 

The bonus rewards councils with matched average council tax payments for six years for each net gain to the housing stock.

Under the HBF calculation this payment is multiplied by the difference between homes built and the government’s household projections for each area, the number of homes they should be building.

Government last week announced how much each authority would receive this year for homes they built in 2009/10.

Some will gain over £4 million in payments whilst others will receive nothing.

Leeds City Council topped the list of losers, after the HBF calculated it will in future be missing out on up to £27 million a year in NHB payments.

It has scrapped plans for over 30,000 new homes since the government outlined the new planning system, abandoning regional targets.

It is currently building 1,200 homes a year despite population growth demanding 5,000.

The £27m will instead go to councils with a more pro development policy and the HBF hopes the publication of the figures will help local developers lobby cash strapped councils.

HBF executive chairman Stewart Baseley said:  “The New Homes Bonus figures highlight the potential income local authorities can generate by building the new homes their areas need.

“In these austere times, with budgets being cut across the country, this money will prove invaluable.

“Local authorities need to look hard at the difference the New Homes Bonus could make to them and work with the industry to plan properly for housing in their areas.”

Bristol is the second biggest potential loser, the HBF says, followed by Sheffield, East Riding of Yorkshire and Cornwall.

To find out how much your local authority is losing, see the spreadsheets attached.

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