Agenda item

(Director f Resources) To consider the attached report.

The Assistant Director Accountancy, Mr Maddock introduced the report on the government consultation on New Homes Bonus, part of the draft financial settlement for local authorities. The consultation would run until 10 March.

A number of the issues covered by the consultation related to planning matters but in order to produce the report for this agenda it had not been possible to consult colleagues in planning on the draft responses. The draft responses have been shared with colleagues in planning and an update was provided. 

The meeting noted that:

·         The consultation sought views on a number of significant changes to the New Homes Bonus.

·         The stated intention of the proposed changes to the scheme was to save £800 million which can then be used to fund adult social care.

·         The removal of £800 million and the re-allocation of this amount has the overall effect of changing the distribution so two thirds will now go to counties and only a third to districts.

The first proposal was to reduce the cost by cutting the number of years that the bonus remained in payment for. Currently the bonus relating to a particular year was payable for the six years following that year but the Government’s preferred option was to reduce this to four years. This reduction from six to four may or may not include a transition year to five. The consultation also included the possibility of reducing the number of years of payment to three or two. The option that would have the smallest impact on this Council would be a reduction to four with a transition year of five included.

Another proposed mechanism to reduce payments was to cut New Homes Bonus by either 50% or 100% for authorities who do not have a Local Plan in place. Clearly there was the potential for this proposal to greatly reduce our income from the Bonus.

A further proposal to reduce payments was to limit the Bonus where planning approval had only been given on appeal. It was difficult to envisage how this could work in practice without there being a huge administrative burden. It was also difficult to predict the exact effect on this council, although it was unlikely to be positive.

There was a proposal to introduce a baseline so the first 0.25% of new homes would not qualify for the Bonus. This was intended to stop the rewarding of growth that would occur naturally without positive decisions by an authority.  However, the introduction of such a baseline would significantly reduce or remove the incentive for low growth authorities.

The final question in the consultation asked whether there should be protection for those facing adverse impacts from the proposals. As an authority that currently receives £2.7 million of New Homes Bonus but did not have a Local Plan we could be one of the authorities who might benefit from some form of floor to limit reductions. Unfortunately there was no detail to the proposal in terms of the level of reduction at which any protection would become effective and whether this would be funded by greater reductions for authorities that are initially above the floor.

There were 14 questions posed with draft responses attached to the report.

Mr Maddock reported the comments given to him by planning. They were:

“Q1: Might Members ask about the other options are that are referred to?

Q2: As above, was it likely there would be a question on whether the financial viability of EFDC could be threatened in the way suggested?

Q6:  In an instance where a planning authority refuses planning consent in accordance with the Local Plan and/or Neighbourhood Plan, but this is subsequently overturned on appeal, it would appear there would be a direct conflict with the Localism agenda if local authorities were penalised further.  A refusal of planning consent that is subsequently overturned by the Planning Inspectorate is not necessarily an indicator of “a bad planning decision”, but one which is taken on the basis of policies contained within Local /Neighbourhood Plans which have been prepared following extensive public and stakeholder engagement.

Q9:  Such an approach would potentially penalise authorities where there are genuine constraints on growth (administrative boundaries, environmental or policy designations, infrastructure delivery constraints, etc), and in such instances it would not be appropriate to set an arbitrary baseline level for growth.  Such an approach would be too blunt, and would not take account of local circumstances.”

Councillor Mohindra noted that the government had said we would get funding from new homes bonus, but now they have taken away money from us. We need to have a robust response to this consultation to tell them to keep their hands off.

Councillor Watson agreed and said that we may not like the baseline as it may well go up.

Councillor Philip noted that a lot of councils did not have a full Local Plan and just had a single document. As for land banking we could not force people to implement the planning permission we give them. The government should pay us on how many planning applications we have granted; and question 4 talked about planning submission instead of planning approval.

Mr Maddock reported on a comment sent in by Councillor Jon Whitehouse on question 4 that: “My main query relates to the Draft Responses Question 4. I think to carry weight it will need to provide some evidence that land banking locally is the cause of delays in building rather than the absence of an up to date local plan. Otherwise the government will assume that the absence of allocated sites combined with the absence of a five-year land supply is a constraint to supply. Some specific examples or at least a fuller explanation here would strengthen the response.”

Councillor Stavrou noted that one of the proposals was that local authorities should receive a set percentage (50%) of the Bonus allocations where they have published a local plan but not yet submitted it to the Secretary of State for examination.

The Chairman informed the Committee that if they had any further comments they should get in touch with Mr Maddock. Councillor Philips asked that an item also be put in the Council Bulletin asking for members comments.

RESOLVED:

(1)  That the Select Committee considered and commented on draft officer responses to the Government Consultation on New Homes Bonus; and

(2)  That an item be put in the Council Bulletin asking members if they had any more comments to make.