David Cameron and fellow government ministers have long stated their wish to build more homes than Labour did and to do this they have put all their eggs in the Localism basket. They’re banking on financial incentives – the New Homes Bonus - and empowerment of communities to build the homes the country and the market needs. While empowerment of communities should help – in the end, the imposition of the top-down targets didn’t – it is reasonable to expect that many areas will look to their elected representatives to provide a lead on development in their areas. Neighbourhood planning, allowing smaller groups to put forward plans for their areas will be important, but it is the larger projects and wider growth that will bring about the numbers of houses needed nationally. The key to increasing the number of these sites will be what local communities get out of that development. The New Homes Bonus is the government match-funding, pound for pound, the council tax for each new property for 6 years. This bonus will be paid initially by separate funding put aside by the government – they expect that in year one it will be fully-funded to the tune of £196m – but very quickly becomes reliant on top-slicing of central government funding to local authorities. This tactic was welcomed by many as evidence that the New Homes Bonus would be a stick - penalising those authorities who did not allow home-building in their areas - as well as the carrot, awarding those that do. There is, however, some concern that the bonus will not be enough of an incentive in wealthier rural areas, particularly where there is high demand for housing in many parts of the South and Midlands. Here the government itself admits that some local authorities may decide to cut house-building once they work out that they will still be ‘winners’ after top-slicing.
