Magazine article Public Finance

'Flawed' NHB Plan Comes under Fire

Magazine article Public Finance

'Flawed' NHB Plan Comes under Fire

Article excerpt

Local growth

Ministers are under renewed pressure to halt the proposed cut to the New Homes Bonus after councils again warned the 'flawed' plan would hit critical services.

The Department for Communities and Local Government is expected to set out shortly how the NHB, which is provided to councils that approve the construction of extra homes, will be top-sliced. This will contribute £400m to the £2bn Single Local Growth Fund for Local Enterprise Partnerships from 2015/16.

The decision, which was first announced in June's Spending Review, has led to concerns from local authorities that projects to boost economic growth, such as improving rural broadband services, would be put at risk.

However, DCLG permanent secretary Sir Bob Kerslake defended the plan. Speaking to MPs on October 14, Kerslake insisted the money would not necessarily be lost to councils as they could influence the proposals being developed by LEPs.

This prompted David Hodge, chair of the County Councils Network, to hit out at government's 'single-minded commitment' to the policy, which he said could hit growth. In strongly worded comments to Public Finance, Hodge said the government's refusal to revisit the top-slice was 'regrettable'. …

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