Councils to get extra £554m through New Homes Bonus

Housing secretary Michael Gove announced the money as part of the £53.9bn settlement for 2022-23. This now puts the total amount of money given to the bonus since its inception at £10bn.

The NHB was introduced in 2011 to encourage councils to grant planning permission for new homes for additional funding. It rewards local authorities for net additional homes added to the council tax base.

The NHB cash is part of the £53.9bn set aside for local authorities for next year, representing an extra £3.5bn (4%) increase in real terms compared to 2021-22.

The settlement includes more than £1bn of additional funding for social care and a one-off grant worth £822m for councils to spend on frontline services.

Local authorities will also be allocated £162m to prepare for social care reform.

Mr Gove said: “Councils continue to deliver for their communities and have a major role to play in our central mission of levelling up the country.

“Today’s funding package represents a real-terms increase from last year’s settlement and will make sure councils can improve vital frontline services, support vulnerable people and protect residents from excessive council tax rises as we build back better from the pandemic.”

A lower-tier services grant of £111m will be provided to councils with responsibility for services such as homelessness, planning, recycling and refuse collection and leisure services.

Responding to the settlement, Georgia Gould, chair of London Councils and leader of Camden Council, said the settlement “won’t be enough to match sky-rocketing pressures on local budgets”.

She added: “Extra grant funding is welcome, but after a decade of reductions, the government’s latest offering will continue to leave councils struggling to balance the books as they support residents through the tough times ahead.”

She also said the government should be doing more to increase councils’ resources.

The provisional settlement consultation will be open for four weeks and close on 13 January.

The final settlement will be announced in the new year.

Source: Inside Housing