Thursday, February 17, 2011

New Homes Bonus. What is in it for St Neots?

Part of the new funding arrangements for Huntingdonshire is the New Homes Bonus. This will equate to 27% of funding from Government and could end up being £3.4 million a year.
How the system works is still out for consultation. The scheme will mean that every new home built in the District will attract the equivalent of 6 years Council Tax. Looking likely that the District Council gets 80% and the County Council 20%. Parish and Town Councils get nothing.

On the DCLG website the following is said:

"In proposals published for consultation, the Minister has announced that the Government will match the council tax raised from new homes for the first six years through the New Homes Bonus. Councils and communities will work together to decide how to spend the extra funding - whether council tax discounts for local residents, boosting frontline services like rubbish collection or providing local facilities like swimming pools and leisure centres."

The interesting bit is: "Councils and communities will work together to decide how to spend the extra funding". Having seen all this what has HDC actually done. It has just put the money in its own budget. This New Homes Bonus scheme is there to allow communities to see something substantial for there commitment to have these new homes in their area. Huntingdonshire is a growth area. St Neots is a growth area. So what is St Neots getting out of this? Answer nothing.

Lets take an example. The new homes being developed behind Tesco. There are 220 new homes being built. Lets say the average Council Tax band for this development will be band C at £1,279. This would bring in an extra £281,380 a year in New Homes Bonus. On an 80/20 split this would bring in HDC £225,104 and CCC £56,276 a year for 6 years on top of the Council Tax they would also gain from the properties.

The total New Homes Bonus over 6 years would be:
HDC: £1,305,624
CCC: £337,656

Not insubstantial funds for just one small development. Again what is St Neots getting out of this money? So far nothing!

So far each Council is looking for the money as already spent. If St Neots wants more then we must ask both Councils and Councillors what are you going to spend the money on in St Neots? The New Homes Bonus is here for the local communities to help them accept development. If all this money goes into propping up already unsustainable budgets then all St Neots will be doing is accepting developments without any sight of this New Homes Bonus money. 

The danger with money only lasting for 6 years is Councils will become dependent on this flow of income. This would be wrong. The money has to be used on financially sustainable projects which will enhance St Neots. If HDC and CCC aren't held to account over how this New Homes Bonus is being spent in St Neots then this money will be frittered away on sustaining unsustainable spending by Councils.

HDC and CCC are supposed to be agreeing with communities how this money will be spent. Plans should already be in place to do this. 

With 5000 extra homes on the East of St Neots site this would bring in an extra £36,000,000 over the building period and six years beyond. That is something HDC currently wants for itself and St Neots to miss out on.

1 comment:

dodgydriveruk said...

Typical Tories really.....all headlines yet robbing bast*rds