North Yorkshire County Council leaders are to call for the axing of a flagship government scheme which is designed to both ease the housing crisis and fund public services, condemning it as “inequitable, unfair and inappropriate”.
A full meeting of the authority will next week hear the authority’s deputy leader Councillor Gareth Dadd criticise the New Homes Bonus scheme, which was introduced in 2011 to provide an incentive for local authorities to encourage housing growth in their areas.
County councillors will be asked to approve calling on the government to stop top slicing funding from councils to pay for the New Homes Bonuses.
The aim of the scheme was to provide a financial incentive to reward and encourage local authorities to help facilitate housing growth.
However, concerns have been raised that it is undermining the government’s levelling up drive in the North.
The New Homes Bonus scheme has seen councils given bonuses for additional new builds and conversions delivered above a baseline of housing growth.
The call comes as the government is seeking views on reforming the scheme, to provide an incentive which is more focused and targeted and has suggested rewarding councils which improve on their average past housing growth rates.
Cllr Dadd said: “I do not believe this has incentivised housebuilding. It’s got developers land-banking.”
The council’s finance boss added were local authorities were being given a bonus for something they have no control over, as it was developers that determined when houses were built.
He said: “Local authorities in the South-East where demand is high get a lot more money because that’s where the houses are being built. Money that would have flowed to us in North Yorkshire is being prioritised in the south.”
He added that while the county council provided 80 per cent of services by cost, such as social services, in the area, but 80 per cent of the New Homes Bonus money was being handed to district authorities.
A government spokesman said the rationale for the 80-20 split was that for the incentive to be most powerful, it needed to be strongest where the planning decision sits – the lower tier in two tier council areas such as North Yorkshire.
However, he added the government also recognised the role, of upper tier councils in the provision of services and infrastructure and the contribution they make to strategic planning.
Cllr Dadd said: “The scheme should be scrapped and the money put back into local government general funding and shared on a more equitable level. The money is not going to where it should be going which is essential services to vulnerable people.”