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New Homes Bonus Scheme Failing to Encourage Building

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United Kingdom  Grant Shapps  Get Britain Building Fund  Public Accounts Committee  Bob Kerslake  Margaret Hodge  New Homes Bonus 

New Homes Bonus Scheme Failing to Encourage Building

By - Wednesday 06 November 2013

The government's New Homes Bonus scheme to encourage the construction of properties in the UK where supply is weakest is failing to live up to its mandate. According to a report from the Public Accounts Committee, two years after its launch there is still no credible data to suggest the initiative is paying off. Where figures are available, data suggests the New Homes Bonus is making the housing shortage worse by merely benefiting areas where the need for new homes is lowest.   

Committee chairman Margaret Hodge said: "It is clearly vital that the incentives work and the government achieves its aim. It is therefore disappointing that after more than two years of the scheme being up and running, no evaluation is in place and no credible data is available to show whether the scheme is working or not."

The Public Accounts Committee has now made a number of recommendations to tackle the problem and is calling for a full review of the scheme in the Spring of next year. Part of determining the efficacy of the New Homes Bonus is making consistent, comparable information available on the progress made by local authorities to create new homes and meet housing need. This will require the establishment of a uniform method of data collection.

However, permanent secretary at the Department for Communities and Local Government, Sir Bob Kerslake is disappointed by the criticism of the scheme. "We have made very clear that our review of the New Homes Bonus is underway and the groundwork will be completed by Easter 2014 as we have always promised." He added that the Committee failed to recognise that the point of the scheme to recognise were growth occurs and for money to go where it is most needed. He said this is why the government has committed £1.2 billion over five years to the scheme. Indeed, the National Audit Office believed it has the potential to deliver up to 100,000 addition homes over a ten year period.

Why did the government's scheme fail? Find out in this post from 2012 when the "Get Britain Building Fund" was launched by Grant Shapps.

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