The New Homes Bonus will be withheld from councils that do not have a Local Plan in place, under government proposals announced this week.

Durham County Council do not currently have a Local Plan


In this financial year (2015/16) DCC will earn approximately £8 million from New Homes Bonus making the accumulative figure, since NHB began, in the region of £24 million.

The Bonus was introduced by the government to promote new house build, and councils encouraged to spend it on infrastructure in the areas where these new houses were to be built. Durham County Council decided against this and added the money into their General Fund.

The Department for Communities and Local Government is consulting on changes to the New Homes Bonus, which include reducing payments from six to four years in order to cut costs and reducing payments to councils where planning permission was only granted on appeal.

The bonus rewards local authorities for each additional new build and conversion using the national average council tax in each band. Long-term empty properties brought back into use are also included and there is a premium for affordable homes.

The consultation states that councils have had “more than a decade” to produce Local Plans.

It adds: “Given the importance of a Local Plan in identifying housing needs in an area and setting the framework for decisions on individual planning applications the government is considering options for withholding some or all of the bonus from local authorities that have not yet produced a Local Plan.”

Councils that have produced a Local Plan but not submitted it to the secretary of state would only receive 50% of the payment.

Councils would still receive payments relating to previous years. Any changes to the policy would not come into effect until 2017-18.

The government also proposes to reduce payments to councils where planning permission was only granted on appeal. The consultation says payments could be reduced by 50% or 100%. This reduction would apply to all six years when the payment would have been paid in full.

The proposed local government financial settlement for 2016-17 revealed that the New Homes Bonus grant is set to be increased by £29m, from £1.17 billion last year to £1.46 billion this year.

The government is seeking to change payments from six to four years, in part to make £800m of savings from the grant, which would go towards social care costs.

“Reductions in payments” will be “necessary” in order to “stay within this new funding envelope”, the consultation, which closes on 10 March, states

The settlement also revealed councils will be offered four-year funding deals, which will be dependent on “efficiency savings” plans.



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