Thursday, 30 September 2010

The Government’s “new homes bonus” will cause council tax chaos - more...

Speaking in Manchester at the Labour conference, John Healey Shadow Housing Minister said:

“Those councils that see new homes built will win but those that won’t or can’t build will lose out, and lose big. This scheme robs some councils to pay others. It will cause chaos in the council tax system.”

“It blows out of the water George Osborne’s promise to freeze council tax, and add extra pressure on council tax bills for councils already facing big grant cuts in public spending. Many councils will have to hike up council tax to cover the costs. Millions will face bigger bills as a result of this scheme”.

“The Government is right to want a strong incentive system for councils and communities ready to see new homes built. But this isn’t it.”

Graham Jones MP added:

“This flawed and ill-thought through incentive scheme will do nothing to build the new homes we need and will leave people in Hyndburn facing even deeper cuts to public services, and higher rises in their council tax bills. We are awaiting the Hyndburn figures but Pendle is to see a £4.9million cut in grant to fund other areas."

“The Government should be building a genuine incentive and planning system to build homes, not cutting housing investment, and promoting this con of a policy around the country.”

Detailed analysis of the Government’s plans for a new homes bonus has been revealed by Labour MP's showing it will cause chaos in the council tax system, more cuts to many hard-pressed council budgets and blow out of the water George Osborne’s pledge to freeze council tax.

John Healey at his Conference speech this morning made the point that our big towns and cities will be hardest hit, as they will have to see many more new homes built every year in their area to “break even” under the new scheme.

The Government plan promises to match the council tax on every new home built for six years. But there will be no new money to fund this scheme. So the Government has said funding will come from a top-slice cut across all councils in the local government formula grant, and many councils will not be able to recoup this loss by big enough gains through the new homes bonus.