Out-Law News 1 min. read
31 Oct 2013, 4:26 pm
The PAC today published a report (35-page / 924KB PDF) on the Government's New Homes Bonus scheme, which was introduced in April 2011 to encourage the building of new homes by paying a bonus to councils based on the amount of extra council tax revenue raised for new build homes, conversions and long-term empty homes being brought back into use.
The report said that, despite having run the scheme for more than two years, the Department for Communities and Local Government (DCLG) has not evaluated whether the scheme is changing how local authorities approach the creation of new homes. It said the DCLG does not aim to complete its evaluation until Easter 2014.
"It is important to assess whether policies are achieving their objectives and providing value for money as early as possible in order to refine the policy or its implementation where appropriate or counter any unintended consequences," it said.
The report said it will be "essential, albeit challenging" for the evaluation to disentangle the direct impact of the scheme from the effects of other interventions, such as Help to Buy and the Empty Homes capital grants programme, and from other changes to local authority funding arrangements.
The report said that figures made available indicated that the scheme had mainly benefitted areas with a low housing need. "So far the areas which have gained most money tend to be the areas where housing need is lowest. The areas that have lost most tend to be those where needs are greatest," said PAC chair Margaret Hodge MP in a statement.
"The Department should set out its evaluation plans now, including methods, data sources, indicators of success, and how it will seek to isolate the specific impact of the scheme from other factors," the report said. It said the PAC would ask the National Audit Office to review the DCLG’s evaluation plan for the Bonus and its findings in spring 2014.
Permanent Secretary Sir Bob Kerslake said he was "disappointed" by the report according to a report by the Independent. "We have made very clear that our review of the New Homes Bonus is underway and will be completed by Easter 2014 as we have always promised," he said.
"The whole point of the New Homes Bonus - which the committee fails to recognise - is to recognise housing growth where it occurs, with money going where those homes are needed most. That's why we've committed £1.2billion over five years towards this scheme, which the National Audit Office themselves found has the potential to deliver up to 100,000 additional homes over 10 years," Kerslake added.
