The Government introduced the New Homes Bonus in 2011 as an incentive to encourage housing growth by local authorities in their areas. The aim of the bonus was a financial reward to encourage them to help facilitate more housing. 

The present consultation covers a number of options for reforming the programme and claims to provide an incentive that is more focused and targeted on ambitious housing delivery. It also claims it will complement the reforms outlined in the government’s Planning White Paper, and dovetail with the wider financial mechanisms the government is putting in place, including the infrastructure levy (CIL) and the Single Housing Infrastructure Fund.

So it will come as no surprise that following The Spending Review in 2018 the government decided to make savings of at least £800 million – probably more Post-Covid, – and direct the money it saves toward county councils to fund social care.

 The consultation sought views on:

• reducing the number of years for which the Bonus is paid from 6 years to 4 years, 3 years or 2 years
• withholding the Bonus from areas where an authority does not have a Local Plan in place
• abating the Bonus in circumstances where planning permission for new development that has only been granted on appeal
• adjusting the Bonus to reflect estimates of deadweight (introducing a baseline above 0%)

Following a consultation, in 2017/18 the Government implemented changes to:

• reduce the number of years the Bonus is paid to 5 years in 2017/18 and 4 years from 2018/19
• introduce a baseline of 0.4% growth of housing stock below which the Bonus would not be paid (and retained the option of adjusting the baseline to ensure allocations remained within the funding envelope)