Defending the indefensible

Nick Guyatt (NG), Deputy Leader of HDC, was on the Jeremy Sallis (JS) Breakfast show on Monday trying to defend HDC's stance on the New Homes Bonus. Nick didn't do very well. Below is a transcript of what he had to say. The transcript isn't verbatum but is as near as I can get it. What snrednek says about what they say is in red.

If you want to hear the interview on the video below (give it a 5 seconds):

Background. 

When the Coalition came to power on of their first initiatives was to introduce the New Homes Bonus. This is to reward communities accepting new developments with a bonus thereby showing communities there is a good financial reason for accepting new developments. A good idea, one rooted in a Government report. The The Government decided on an 80/20 split in favour of the District Council over the County Council. The normal split for Council tax is the other way round. The New Homes Bonus is funded for one year and thereafter Councils will see a reduction in grant to pay for the New Homes Bonus.
HDC firstly hid the New Homes Bonus as the New Homes Reward Grant and now is spinning that it is a reward for itself and not the communities accepting developments.

Anyway here is the transcript of the interview:

Jeremy Sallis: Is St Neots being robbed of cash which should be going towards new developments?

Nick Guyatt: No! Not at all

JS: Why?

NG: Erm because the first thing is Cllr van de Kerkhove has obviously misunderstood what the New Homes Bonus is about. The government has decided that it is going to re-look at the way it is going to finance local government and it wants local government to be more responsive to its desires for economic growth and the Government wants new economic growth to come in via new houses. So what is actually doing is reducing the grant it gives to local authorities erm to cover all the services it gives throughout the whole of their area. And is saying we will reduce your money one end and we will give you some more money if you achieve some of these spending targets.

Cllr van de Kerkhove hasn't misunderstood what the New homes bonus is about. The misunderstanding is HDC's. The Government is looking into how local government is financed. That has nothing really to do with the New Homes Bonus.


There are also no spending targets. These have been taken away by the Coalition. So what Nick was on about in his answer is a load of rubbish.

JS: That is not the impression given by the Government’s own Communities website which suggests this is an incentive as to why communities should accept new homes in their area.

Very true

NG: I can’t speak for the Government.

Well your informing us what the Government is telling you. A get out by Nick which didn't work.

JS: Well your speaking on behalf of the Government when you say they are telling you it is to be spent all across the board as opposed to just the areas where new developments are going up.

This is a Conservative/Liberal Democrat government and this is a Conservative policy.

NG: Let me give you two analogies first of all. If I say to you that I live, I don’t, in a house that pays £1000 tax to the local authorities and you live in house that gives £200 tax does that mean you should receive a fifth, er 20 percent of a year less spending on you because you produce less council tax? No it doesn’t. Council tax is spent across a whole district for the benefit of every member of the communities. If government reduces the money it gives us for spending on all the communities then all the communities have to suffer that cut.

So what has this answer got to do with the New Homes Bonus? I just don't know! The answer must be in the last sentence. What Nick can't seem to accept is the areas accepting new housing should get more money than those areas not accepting new housing.

JS: Love’s farm residents suffering more than most. If they are having houses put up without the facilities being put when there is money there to provide those facilities.

Now Love's Farm has yet to be completed. Much of the housing was built before the New Homes Bonus was introduced. Section 106 agreement monies from the developers to pay for local facilities is where the money comes from to pay for a community centre and play areas.

NG: Can you differentiate please between what there provided by the Council and what is provided by the developer. It is a relatively new development which is happening. I heard people talking about the drains in the road. That because the roads haven’t been brought up by the developer to the standard required by the Council to adopt them.

And it is up to HDC to ensure these things happen.

JS: Residents are telling us about the lack of facilities for young people. Your getting £8000 per property.

NG: We are not getting £8000 per property. We are getting £800,000 of new money in the first year. Thereafter all the money is coming, we are told by the Government, out of the revenue support grant.

How does Nick know that? HDC cannot produce any figures on how the New Homes Bonus is calculated for HDC. So how does Nick know it isn't £8000 a property? The Council is looking to get £1.8 million in NHB for 2012/13. Indeed it is forecast to rise even further in future years.

JS: That will be the tune of?

NG: That will be to the tune of a £1 million next year.

JS: Is any of that money being spent on these new Developments?

I think Jeremy get the wrong end of the stick. Nick is going on about a cut whilst Jeremy thinks it is a gain.

NG: A lot of this money is being spent in St Neots and the new developments.

Where and how much?

JS: How much of that money? The majority or all of the money intended by the new homes bonus.

NG: If your granny lived on Love’s Farm and she fell down the stairs and went to hospital and came back as said she needed a stairlift. And she was eligiable for a grant for a stair lift we would be put in a stairlift in for her. OK. That is the kind of way we spend peoples money.

So no answer on where and how much. Indeed with this answer I have to wonder how Nick got to be Deputy Leader. "That is the kind of way we spend peoples money". 

JS: lets go back to the communities website again. This is money coming from the Government. I just want to quote something from this website. Communities themselves will decide how to spend this extra fundingwhether council tax discounts for local residents boosting frontline services like rubbish collections or providing local facilities like swimming pools or Leisure Centres. Of which these people talking to us are calling out for. Have these communities, have these residents been consulted. Have you spoken to them and asked them how they would like these monies spent.

NG: Lets go back the very basics. We have spent a lot of money on St Neots swimming pool and leisure Centre. A lot of money was spent before, in fact, Love’s Farm was even digging the foundations of Love’s Farm. So a lot of the money the council is spent isn’t spent on a whim, erm based on what happened last year we have to plan what we spend going forward.

Yes money has been spent on the Leisure Centre. But this was all planned before the New Homes Bonus was introduced. The New Homes Bonus is there to show communities the benefits of new housing. Now the argument seems to be we have given you a Leisure Centre so we'll take the money back for that.

JS: A very simple question. Have these residents been consulted?

NG: Most of them weren’t here to start with when the decisions were made. They have elected representatives who have an input into how into deciding how the money is spent.

The New Homes Bonus is intended for the communities accepting development. The DCLG wants councils to consult with the communities accepting development on how the money should be spent. HDC will not do this.


This is the problem with the New Homes Bonus. The Government thinks if it tells local authorities what to do then they will do it. Councils have a reputation of taking the money and doing something else. Whether the Leisure Centre has been upgraded is a backwards argument. The money is new and here and HDC is nicking this money to prop up it failing budget.


I can hear the frustration in the voice of Jeremy Sallis as he fails to get answers to many of the questions he asked. If Nick is deputy leader of HDC and this is the muddled thinking behind HDC decisions then you have to wonder whether the Conservatives are best in charge. All we got from Nick is a mixture of muddled arguments and answers that went no-where.

HDC still does not understand the New Homes Bonus

In the draft budget for 2012/13, the Conservative run Huntingdonshire District Council still doesn't get the reason for the New Homes Bonus (NHB). In the draft budget it says:

Members have expressed interest in the use of the Bonus. It is not ring-fenced for specific communities but there is ample evidence within this report that it will be used to enable the protection of services and for in investment in key growth areas.

The Government that pays the New Homes Bonus informs the public that HDC should be consulting with the communities which are accepting development on how the money should be spent. Yet HDC simply ignore this and carry on its merry way.

An Example:
Conservative controlled Wychavon District Council has been able to do a consultation and have a written policy toward their New Homes Bonus money. They even have loads of Parish Councils.

In the Wychavon policy it says:

(ii) Development in towns and villages
(a) Development within a Town or Parish area
Where development takes place in Droitwich Spa, Evesham, Pershore or the rural areas of the district, the Council will normally award up to 40% of the NHB accruing to be reinvested in the local community. This reward will not be ringfenced to any particular use but it must deliver ‘added value’ to the local community and area and where possible, benefit those communities close to any new development.
(b) Significant developments adjacent to towns
It is likely that some of the urban extensions to the three towns, which may be constructed over the next few years, may be delivered outside the administrative boundary of the town whilst clearly serving the growth of the urban area and reliant of amenities and services in the urban area.
The Council may determine that the NHB payments to be reinvested in local communities, in circumstances where it is serving urban growth, is split between the town and the rural parish(es) accommodating the urban growth. Of the allocation in (a) above, the split will normally be 80% to the town and 20% to the Parish.


In Wychavon up to 40% of New Homes Bonus money can go to the local community accepting this development. Not exactly what I would like to see. But it does go some way to meeting the needs of the Towns accepting developments.

The Wychavon NHB policy goes on:

9. Procedure for payment
1. The Council’s Executive Board will determine and authorise the release of any payments under the NHB scheme. The Council will publish on its website an annual statement of the NHB monies attributable to each town or parish area. Payments will generally be held until there is a commitment to spend the monies.


In a recent FOI request I was informed HDC cannot work out the New Homes Bonus attributable to St Neots. Yet Conservative run Wychavon will be doing so!


Before I get too carried away, there are difference between Wychavon DC and Huntingdonshire DC. These are:

Population: W=117,000 / H=167,300
Area: W=256.2 sq mi / H=352.3 sq mi
Density: W=456.7/sq mi / H=474.9/sq mi
Council Tax proposed for 2012/13: W= £108.44 (Zero increase) H=£127.17 (2.5% increase)

Even with a population density slightly lower, Conservative run Wychavon DC has a policy on New Homes Bonus and a lower Council Tax rate which isn't rising. In Huntingdonshire, we have a Conservative run Council with no real policy on New Homes Bonus, apart from denying its intended use, and is looking to put up the Council Tax.

If the New Homes Bonus is bribery then bring it on!

The New Homes Bonus has been described as bribery by The Daily Mail. This isn't peanuts. A housing development in Somerset of 3750 properties is likely to bring in £54 million in New Homes Bonus. Think what East of St Neots is bringing in and will bring into HDC and CCC coffers. My back of the envelope calculations comes to about £40 million. Just for St Neots.

The Bribery allegation has much to do with the amount of money coming in. The amount is 6 years of Council Tax at the full rate for each property built split 80/20 between HDC (which gets most) and CCC which gets the 20%. This is worth roughly £8000 for each property.

Rt Hon Grant Shapps denied the new Homes Bonus was bribery. In his response he said:

And where homes are built, it is right that local people share in the prosperity and growth that this will bring to their community.

Only that HDC has pocketed this money and St Neots isn't having any of it.

New Homes Bonus funding can be used however communities see fit to improve their local area - and I would urge all councils expecting to receive funding to speak to their residents about how they would like to see it spent locally.

HDC hasn't asked St Neots what we want to do with the New Homes Bonus gained from properties being built in St Neots. Instead HDC disguises the New Homes Bonus as the New Homes Reward Grant or similar. HDC has denied or is in self denial about the purpose of the New Homes Bonus.

The recent Neighbourhood Forum would have been a good start to this.

So what are the St Neots Conservatives going to do about the New Homes Bonus?

At the last election the Conservatives said:

Read it again. The Conservatives have promised they will ensured the New Homes Bonus monies come back to St Neots where they belong. So why is HDC nicking our New Homes Bonus?

If HDC is just going to nick the New Homes Bonus money to prop up their failing budget the New Homes Bonus isn't worth anything to St Neots. On the otherhand if the New Homes Bonus monies comes to St Neots - where they belong - then bribe away.

New Homes Bonus - where now?

The Government wants the New Homes Bonus to be used in the communities which are shouldering new housing developments. As such St Neots must be in for a large load of money heading our way. But HDC has nicked this money to prop it failing budget.

As the St Neots Conservatives said in a leaflet during the elections:

In a report to Cabinet the OSP Economic Well-being said:

How much is HDC looking at nicking in New Homes Bonus. In the recent financial forecast HDC has upped the amount it will receive in New Home Bonus.

In 2016/17 it is looking at an extra £1.9 million increasing the total from £4 million to £5.9 million. This has an effect on the Medium Term Plan.

If the New Homes Bonus was taken out of this forecast HDC would have to make an additional £5.9 million of cuts or put up Council Tax to pay for these services. But that is not what the new Homes Bonus is for. It is to show the communities that house building brings tangible benefits. St Neots will see none of this. The St Neots Conservatives say they'll bring the New Homes Bonus back to St Neots where they belong. Having said this how are they going to ensure this happens. If they support this budget the St Neots Conservatives will be breaking an election promise. Yes another promise will be discarded. The St Neots Conservatives are getting rather good at breaking their promises.

Conservative Leaflet for Eynesbury now received

I received a Conservative leaflet through promoting Paul Ursell for District. It can be seen at electionleaflet.org.

To start with I looked through the leaflet and compared it to the 2010 leaflet. In the section for £3 a week there are a few differences. In 2011 it says:

The 2010 leaflet said:

So what has been dropped? Grant aid to community projects, Listed Building Grants and Transport initiatives such as Dial-a-Ride.

Nothing in the leaflet about £8.6 million of cuts. All the Governments fault it would seem. The Council Tax comparison needs to be looked at as Conservative run Fenland District Council charges £241.56.

What is also missing is the amount of reserves being used to pay for this low Council Tax rate in Huntingdonshire.

Now the Conservatives do make a series of pledges about Council Tax. I've highlighted the passage. The pledge is to "Reduce the cost of Local Government whilst keeping key services intact". What are the key services?

Whilst these pledges sound good none of them actually mean anything in terms of Council Tax rates. Lots of words - little content.

Rebalancing must be the buzz word of this election. When it comes to the Town Council, I asked what are front lines services and what will this mean to the back-room bureaucracy. Answer.....Silence.

The one pledge I see is the protect and enhance pledge for open spaces.

So the Conservatives are going to protect and enhance Shady Walk instead of having a cinema! Not going to become a car park then!

Lastly we have the New Homes Bonus.

To me this is a commitment by the HDC Conservatives (Jason Ablewhite - next Leader of HDC is featured on this leaflet) that New Homes Bonus money will come to St Neots. This is at odds with what Cllr Rogers said about the New Homes Bonus.

This is a well presented leaflet and gives good account of what the Conservatives aspire to do. There are some conflicts between what the Conservatives say and do as outlined above.  The problem I have is the leaflet leaves out the mess HDC got itself into. It doesn't really say anything concrete over Council tax rates and whilst it does go on about the New Homes Bonus this is at total variance to what the current Executive Councillor in charge of finance actually says. He said the money is to be spread across the District. How this will hold up only time will tell. If the money for St Neots does come back to St Neots this will leave another hole in the Conservative run HDC budget.

What is the point of the new developments?

Under the last Labour Government building housing was a top down affair with Government ordering regions to build a certain number of housing. This was communicated to Counties who then shared this with Districts who came up with the actual plans on the ground.

This has all changed. With the immanent demise of the Regional Spacial Strategies it will now be down to Districts to decide where to developments go.

The New Homes Bonus is a financial incentive for New Homes to be built. It gives 6 years worth of Council Tax to each new home built split 80/20 between District and County Council. This sounds good for St Neots. There is a large amount of money coming from building homes in St Neots and other developing areas. This could have proved to be of major benefit as St. Neots residents would be able to see this money make substantial changes to St Neots.

That is until the HDC Conservative administration nicked the money for the whole of Huntingdonshire to prop up their failing budget.

What benefit is there of having all this new housing east of St Neots? In the past this was effectively a Government order to build new housing. Now there is a reason to have these new developments - The New Homes Bonus. But HDC has taken that reason away. In my view there is no reason to have these new developments as the money will be spent in many other parts of the District. St. Neots loses out. That is why I say:

New Homes Bonus - Money for Local Communities. Where is St Neots?

I was sent a message from a District Councillor which says:

Remember the New Homes Bonus (government's name) is not specifically for the town the home is built in (S106/SIL is and remains) - but for authorities delivering and managing growth!!

I disagree. From its inception the money should be used in consultation with the local communities it affects. In a Ministerial written statement to Parliament Rt. Hon. Grant Shapps MP says:

"The New Homes Bonus will be unring-fenced. This flexible funding will allow the benefits of housing growth to be returned to those communities affected by growth in a way which best meets local need. Local authorities will need to lead the debate with their communities to determine local spending priorities."

In the pdf file which has the final scheme, it says:

• Transparent - it will be easy for councillors, the community and developers to calculate and to see the early benefits of growth.  
• Flexible - local authorities will be able to decide how to spend the funding in line with local community wishes. The Government expects local councillors to work closely with their communities – and in particular the neighbourhoods most affected by housing growth – to understand their priorities for investment and to communicate how the money will be spent and the benefits it will bring. This may relate specifically to the new development or more widely to the local community. For example, they may wish to offer council tax discounts to local residents, support frontline services like bin collections, or improve local facilities like playgrounds and parks. This will enable local councillors to lead a more mature debate with local people about the benefits of growth, not just the costs. The Bonus will be paid through section 31 of the Local Government Act 2003 as an unringfenced grant.  
• 6. We want the economic benefits of housing growth to be more visible to the local community. We have therefore designed the New Homes Bonus around the council tax revenues generated from housing development.  
• Ministerial Foreword.The New Home Bonus will have localism at its heart. It will re-energise communities. It will encourage local politicians to lead a debate with communities about the benefits of new homes. Local authorities will be expected to work with local people to develop their housing plans in ways that meet their needs and concerns.

Time and gain the statements refer to local communities and how this money will be shown to be spent. This money is being nicked by the Conservative administration at HDC to prop up their Budget. They haven't got the balls to go to a referendum over a Council tax rise so they have just taken the bonus and ignored the wishes of the local communities. With roughly £36,000,000 of New Homes Bonus due, St Neots will see nothing tangible for all this extra money! This money is intended for the local communities to help with make developments more acceptable to local communities. The rest of St Neots must see the benefit of East of St Neots expansion and other developments. In the case of St Neots this will substantial amounts of money which will just go into the HDC black hole.

HDC is getting the New Homes Bonus. What is St Neots (and other areas) where the development is taking place getting out of it? Answer: Nothing!

HDC still addicted to spending reserves

The budget report shows how Conservative run HDC is still addicted to spending reserves.

The shortfall met from reserves does one thing and that means the cuts are put off for another day. The saving grace is the New Homes Bonus which HDC is taking for itself. This still means a further £2 million of "savings still required" have to be made. This means with £6.6 million of savings already proposed the total will be £8.6 million cut.

By using these reserves to stop more cuts being made this is putting decisions off to another year. Possibly when the Council is merged.

Conservative run HDC also didn't get their forecasts right on the Local Government Settlement.

As can be seen from the above picture, even the Council got the Revenue Support Grant wrong. These cuts in taxpayer funding are even deeper than forecast with HDC looking to lose £4.2 million form what they thought in February 2010 to what they thing now. £12.9 million to £8.7 million.

The saving grace for HDC is the New Homes Grant Bonus. This new bonus for allowing new homes to be built in an area will be substantial.

The budget gives the figure of £940,000 in 2011/12 rising to £3.337 million by 2015/16. The budget report waffles on about this being a grant rather than a bonus. The report says:

Conservative controlled HDC is taking the money for themselves. This isn't what the money is for. As Grant Shapps said:

Nothing in this report about communities and councils working together. Just HDC gets this money! HDC grabbing this money is wrong. The Conservative run HDC is robbing St Neots of money intended for St Neots and all the other development areas in Huntingdonshire.

In an effort to get around not having a referendum on increasing Council Tax HDC has come up with ideas to tax us through Conservative Stealth Taxes. In part of the report entitles: "Town and Parish Councils" it says:

CCTV will only be kept going if Town Council taxpayers fund these.

Maintaining Parks services will mean either contributions from the Town Council taxpayer to fund these or HDC will abandon the service?

Mitigating increases in car park charges will mean contributions from the Town Council taxpayer. Why not give the car parks to the Town Councils to run?

Mitigating reduction grounds maintenance standards will mean the Town Council will have to pay more and the Town Council taxpayer will have higher bills to pay for this.

Taking over Community Grants will mean more money spent by the Town Council to support these grants. Again higher council tax but not on HDCs numbers.

Subsidising provision of Customer Service Centres. Again something HDC should provide being foisted onto the local council taxpayer.

Supporting Town Centre Partnerships is another Conservative stealth tax on the St Neots council taxpayer.

The effect of this is to raise the Council Tax at Town Council levels whilst HDC can shout about low Council Tax increases. Is this how the Conservatives work? The Conservatives don't have the balls to have a referendum over Council Tax. All these "opportunities" are designed to get the numbers down for HDC and is just another way of taxing the council taxpayer by stealth!

And nearly finally:

The Leisure Centres have been reported as "nearly making a profit" and costing "£0.8 million". The budget is where I look for how much each Leisure Centre is costing the Council Taxpayer. Nearly £2.9 million. How much has the much vaunted £2.9 million in spending on St Neots Leisure Centre cut the budget? Answer: £39,000. 

And finally....

HDC has been saved by the New Homes Bonus. This is intended for communities to have money to improve their areas. HDC has snatched this money and is robbing St Neots money intended for it. St Neots could do much with this short term money to help alleviate some social problems. If the New Homes Bonus is just going to be used by HDC to prop up their budget this will not be a bonus for St Neots who will be subsidising the Conservative run HDC. So what are our St Neots Conservative Councillors going to do about this? Vote the budget through!

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.