NAO calls urgent review of New Homes Bonus

Robyn Hall

March 27, 2013

In its report on the scheme the NAO said that it believes that the Department for Communities and Local Government has failed to monitor payments to LAs up to 2013-14.

The DCLG has plans to carry out a review of the New Homes Bonus during 2013-14 but has not decided upon its scope or methodology.

The National Audit Office has called the review of the scheme essential and for it to be carried out urgently.

The report has found some evidence that the New Homes Bonus has given authorities resources to allow them to continue activities such as identifying empty homes and bringing them back into use.

But the scheme is mainly funded by redistributing central government’s core funding for local authorities.

Some local authorities, particularly in areas where developers are less likely to want to build new homes face losing large amounts of their funding from central government. These authorities face growing financial risks, including to future service delivery.

The Department estimated that the scheme would deliver around 140,000 additional new homes over its first ten years, increasing the supply of housing by between 8% and 13%.

The NAO said a more accurate estimate of the increase in housing supply would have been 6% to 11% or 108,000 homes 32,000 fewer than originally expected.

Commenting on the report Jack Dromey MP, shadow housing minister said the governments assumptions were “unreliable” “unrealistic” and “contained a substantial arithmetical error.”

“This damning report exposes the failure of one of the government’s flagship policies to boost house building and the utter incompetence at the heart of government.

“It is clear that the policy doesn’t work, is unfair and that ministers have failed to monitor whether the policy is delivering – what a shambles.

“It is extraordinarily irresponsible that Ministers haven’t bothered to assess whether the £1.3 billion they are spending is a good use of taxpayers’ money.

“This shambolic housing policy and cavalier approach to spending taxpayers money explains why the Government is presiding over the lowest level of house building since the 1920s and is unable to deliver a One Nation approach to building communities for the future.”

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