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Nearly three quarters of the councils in England have not spent their share of £200m new homes bonus cash handed out by Government on development.
The New Homes Bonus was dreamt up by Government to help stimulate development by offering cash rewards for allowing house building work to take place.
But a Freedon of Information request by the magazine Inside Housing has found that most of the cash is still locked away or has been diverted away from new housing.
Of all the 349 councils who received the bonus award last April, just 29% are using the cash for housing or other community projects.
Of the 331 local authorities that responded to the request, just over half (54%) said the cash had been allocated to the general council fund.
Around one in five councils still need to decide how it will be spent.
The bonus, which sees the government match the council tax on any new properties for the first six years, was designed to incentivise communities to support development by providing or improving local facilities.
But 21 councils admitted that they had used the cash to prop up services and offset the pain of 4.4% cuts to local authority grants.
A spokesperson for West Lancashire Council, said: “The council has received £174,000 in new homes bonus… but at the same time has seen a reduction of more than £1m in its main government grants. Consequently the council decided to use the new homes bonus to support its general budget position.’
Shadow housing minister Jack Dromey, said: ‘We knew the new homes bonus was unfair, distributing money from the most deprived authorities to the most affluent, and now we know it doesn’t even work.
“Cash-strapped local authorities are being forced to divert the money to protect essential services.”
The Modern Masonry Alliance is urging the Government to take decisive action to stimulate the building industry to avoid a double dip recession.
The Alliance has called on the Government to directly fund building of an extra 20,000 social homes to stimulate the flagging UK economy.
Latest official data shows construction heading for a second full-blown recession and there are dire warnings from the CITB-ConstructionSkills that up to 45,000 jobs will be lost from the industry this year.
Mike Leonard, director of the MMA, said: “We have seen the Government boost infrastructure spending as an emergency measure, which will help long term job creation.
“But the latest unemployment and growth figures show we need to create jobs and stimulate the wider economy right now.”
He said: “Our message is clear. The current plan is clearly not working and we cannot afford further hesitation.
“The Chancellor needs to act now, not through printing more money, but by funding a major social housing program where 92 pence of every £1 invested will stay in the UK.
“This will create jobs by ensuring demand for our UK based building materials industry and by creating construction jobs for young people and unemployed skilled workers.
“It will also begin to address the growing housing crisis and the social and economic issues that are a result of this.”
The poor GDP figures for the UK yesterday, underlined that construction and manufacturing are the important growth drivers.
Without bold and decisive action from Government, Leonard warned the country would lose a generation of young people to unemployment and witness a major loss of skilled workers with over 800,000 job loses in construction industry and the supply chain.
He warned that the dire employment predictions from Construction Skills had not revealed the full picture as they failed to encompass job losses in building materials manufacture, which was a vital industry for the UK.
“Add to this the fact that 40% of those made redundant in the last year are over 50 and you will begin to understand the gravity of the skill drain that is occurring.”
According to the Construction Skill survey the manual trades will be hit the hardest as the make-up of the industry changes in a climate of low house building activity.
CITB predicts that by 2016, demand for painters and decorators is expected to be 6,300 below 2010 levels, manual labourers 3,000 below and bricklayers 2,500.
Even with sluggish growth expected to return in 2013, by 2016 output and employment will still be 5% below their respective 2007/8 peaks on present spending forecasts.
Fears are growing that construction is sliding into a second full-blown recession after the latest Government GDP figures were published today.
Official figures confirmed construction output fell 0.5% in the last quarter of 2011.
While the third quarter of last year was up 0.3%, there is widespread belief that with orders falling, construction is inevitably sliding into a technical recession of two falling quarters of output.
Forecasters have been warning from some time that collapsing public sector spending and weak private sector growth will see a second construction recession following the credit crunch.
Overall UK GDP was down 0.2% in the last quarter raising pressure on the Government to stimulate the economy further in the next Budget.
The main drag on UK GDP was manufacturing down 1.2% and then construction.
Noble Francis, Economics Director at the Construction Products Association, said: “As construction has been highlighted by government as essential for recovery, the decline is severely harming prospects for the sector as well as constraining overall economic growth.”
“Unfortunately the prospects looking forward are even worse, as construction is expected to fall a further 5.2% during 2012, exacerbating the problems in an industry that has already lost 300,000 jobs, and severely hindering growth for the economy as a whole.
Councils need to play a bigger role in helping the country to solve the present housing crisis.
An in depth report by the Homes and Communities Agency and Local Government Association argues councils need to play a more pivotal role in delivering housing.
The report, entitled ‘Meeting Local Housing Demand’, lays out several options available to councils to press for greater housing.
It says that councils recognise that good and well-designed homes that stand the test of time can transform communities, improve outcomes for families and promote social mobility.
Cllr David Parsons, Chairman of the LGA’s Environment and Housing Board, said: “Clearly there is a massive challenge to bring down housing waiting lists and to deliver new affordable housing, but it is one which councils are ready to take the lead on.
“There are a number of options for councils to utilise, and I know they are all thinking ambitiously about how to deliver new housing, while improving existing homes.
“Nothing should be off the table when it comes to delivering the new homes which can result in local people leading healthier and happier lives.
“The ticking housing time bomb in the country can be defused if councils are allowed to get on the front foot and utilise the options available to them.
He added: “All partners, including Government and the HCA have an important role in ensuring councils have the tools and flexibility to deliver effectively for their communities.”
The report highlights how several council are proactively pushing the house building agenda.
In Manchester and Birmingham, the city councils are using public land and new policies to start a build-to-rent market, increasing the numbers of houses, and providing those renting with more flexible terms.
Cherwell Council, in North Oxfordshire, is bringing together its land, funding, powers, welfare policy and community programmes into a housing plan driven by local people and the community.
Leicestershire County Council has committed all of its New Homes Bonus received in 2011/12 to support the building of rural, affordable homes, for rent or for shared ownership.
Key recommendations:
•
Councils should have strong Local Plans in place which should include details on the required design, quality and style of buildings, and the number of developments allowed.
•
Work more closely with communities so they can understand the benefits of developments occurring in their local areas.
•
Investigate what public land in the local area is suitable for development.
•
Adopt new approaches to delivering affordable housing in local areas. Options could include build-to-rent, co-operatives and Community-Right-to-Build.
•
Explore how the Green Deal can be used to make existing homes more energy efficient and contribute to other local priorities, such as carbon reduction, town centre renewal and fuel poverty.
T-ZERO is a non-profit project initiated by some of the UK's leading
energy conservation and housing charities, housing associations, architects
and buildings performance specialists, together with English Heritage
and the Housing Corporation. It is supported by the Technology Strategy
Board (formerly DTI) and its brief is to develop novel ways to reduce
environmental impacts from existing housing, working towards a future
goal of a zero carbon built environment.
T-ZERO is
developing an interactive web-based tool that puts energy and environmental
performance expertise in the hands of the householder, housing stock
manager, designer or builder.
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