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Council Leader Denies Housing Bonus is A ‘Bribe’ as Described by Senior Tory

Published on: 14 Dec, 2016
Updated on: 17 Dec, 2016

Guildford council leader Paul Spooner has denied that bonuses paid to councils for building houses in the green belt are “bribes” as described by a former Conservative cabinet minister in a national newspaper.

The government is expected to pay a bonus which, The Times claims, is typically £9,000 for each new house built under the new homes bonus scheme. According to CPRE Guildford Borough Council (GBC) could receive £68 million for 8,200 homes.

Other local authorities that might qualify for hefty bonuses are: East Hertfordshire, Central Bedfordshire, Bradford, Birmingham and prime minister Theresa May’s constituency, Windsor & Maidenhead.

Andrew Mitchell MP

The former government chief whip of “Plebgate” fame, Andrew Mitchell, also the MP for Sutton Coldfield where there are 6,000 green belt homes planned, told The Times: “This payment is a perverse incentive of which the government should disapprove since it encourages building on the green belt. To be blunt it is a bribe.”

Mr Mitchell tabled an amendment to the Neighbourhood Planning Bill that was debated yesterday (December 13) in parliament that would prevent bonus payments.

He reminded the House of Commons that Sajid Javid the Secretary of State for Communities and Local Government recently said: “The green belt is absolutely sacrosanct…Unless there are very exceptional circumstances,” but had more recently, on November 24, appeared to contradict that view at a National House Building Council annual lunch.

Mr Mitchell added: “Saying one thing in the House of Commons and saying another at a lunch with developers is precisely the sort of thing that brings politicians and ministers into disrepute. The fact that people behave in that way is the reason why we have seen the election of President-elect Trump in America, the growth of Nigel Farage in this country, and the growth of the people versus the establishment.”

The Times article (13.12.16) in which the government new homes bonus was described as a “bribe”, according to a former cabinet minister.

But locally Cllr Spooner (Con, Ash South & Tongham), leader of Guildford Borough Council, defended the homes bonus scheme. He said: “It is not clear what assumptions the CPRE [Council for the Protection of Rural England] made in calculating the £68m figure and the new homes bonus is certainly not a bribe for councils.

“Councils have always received central government funding based on the net number of new homes in their area, previously known as the formula grant. In 2011, the new homes bonus was introduced to replace the grant.”

In December 2015, the government consulted on changes to the bonus. Their preferred option was that from 2017-18 onwards, local authorities who have not submitted a Local Plan, under the 2004 Act, will not receive new homes bonus allocations until they do.

Cllr Spooner continued: “This could mean that the council does not receive anything for new homes built from 2017, which is therefore clearly not the council trying to ‘earn’ or be ‘bribed’ with £68m.”

It is anticipated that local authorities might receive 50% of the bonus allocation where they have published a Local Plan but have not yet submitted it to the Secretary of State for examination. But the final changes to the bonus scheme have not yet been confirmed.

Although not answering directly a question relating to GBC’s reliance on new homes bonus payments, Cllr Spooner did explain the current level of bonus payments and how they have been used: “In 2015-16 the council received £1,779,365 in a new homes bonus grant.

“£1,000,555 of this was used in the council’s general fund revenue budget to support expenditure on the emerging Local Plan, dealing with major planning applications, housing strategy and economic development.

“£1.8million of the balance on the new homes bonus reserve is earmarked for projects across the borough including transport and environmental projects around Guildford town. The remaining £778,810 was transferred to the bonus reserve and is awaiting allocation to specific projects.”

Cllr Susan Parker

However Cllr Susan Parker (Send), leader of the Guildford Greenbelt Group, was clear that, in her view, the new housing bonus was a bribe. She said: “Anything that distorts decision-making through money works as a bribe.

“Central government has savagely cut local authority funding, so the New Homes Bonus is an important resource. It may be phased out in future, but for now is very significant – and especially so because of the threat from government that if the Local Plan is not forced through, the bonus might be cut.

“GBC’s 2016-17 budget states: ‘Taken together, the settlement funding assessment and New Homes Bonus are the key elements of central government support the council receives.’

“So it is clear that councils are forced into making pro-development decisions to get money, blaming central government, while the government gets to wash its hands of the responsibility, pretending decisions about housebuilding are local.

“New housing is sited on green fields because this is most profitable. Developers don’t usually make proposals for brownfield sites because they can make higher profits, more quickly, from developing green fields.

“If green fields were protected, then it would be more viable to build sustainably in town, and excavate to build garages underground.  Our countryside is being sold off to the highest bidder. Housebuilders make higher profits; the council gets a small contribution; and everyone who lives here pays the price.”

Cllr Caroline Reeves

Caroline Reeves (Lib Dem, Friary & St Nicolas), leader of the opposition, said: “As the government has drastically reduced funding for local authorities in all areas, any money could be seen to be a bribe to get us to do what they want.

“All planning applications have to go through the planning process and may or may not be approved regardless of the new homes bonus, it won’t make a planning application more likely to be approved, regardless of where it may be in the borough.”

George Dokimakis, chairman of Guildford Labour, added: “The Conservatives have some uncomfortable questions to answer about this. They have cut funding to our borough yet offer incentives to sell off our green belt land to developers to build houses.

“If the [Times] article is true, the GBC Conservatives are not simply incompetent by creating a Local Plan that does not address Guildford’s needs, they are actually putting our borough’s future in danger.

“Any green belt development should be subject to careful consideration and management to meet our borough’s needs, not be used to address the financial shortfall the Conservatives themselves have created in the first place.

“They need to clarify whether these bonus payments have featured in their funding analysis and whether it was one of the factors that decided the existing Local Plan proposal. Are they relying on this money in their budget?



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Responses to Council Leader Denies Housing Bonus is A ‘Bribe’ as Described by Senior Tory

  1. Jules Cranwell Reply

    December 14, 2016 at 4:38 pm

    Of course it is a bribe, and the GBC executive are hungry for it to waste on their ‘grand schemes’. They clearly have a vision to ‘make Guildford great again’.

    I think you’ll find that Guildford is already great. It’s a great place to live, largely due to the amount of green belt in and around the borough. Destroy that and Guildford will not be great, it will be grim.

    What is GBC for? It should be to serve the will of the people. As it does not want to do so, maybe it’s time to close the doors at Millmead. Would we notice the difference?

  2. Ben Paton Reply

    December 15, 2016 at 12:27 pm

    The council leader has emphasised on many occasions that he is operating under a number of constraints. For example he repeats the Mansbridge line that the draft local plan may be bad but if central government had its way it would be worse.

    And of course the whole planning system is now subject to a number incentives. Call them carrots or inducements or bribes. The adjective makes no difference. The result is the same.

    Take the carrot of “affordable” housing. My understanding of how this works is this. When a new housing estate is built 40% of the houses have to meet some definition of “affordable”. So if the estate has 100 new houses on it, 40 of them must be sold off at a lower price. What is the real effect of this?

    The fact is that the people who buy the first 40 houses are probably subjecting themselves to living on or near a building site for several years. So the cheaper price they pay may only be an “inducement” for them to accept the dust, noise, ugliness, and inconvenience. Far from making the houses “affordable” the reduced price is just a discount to encourage a quick sale. And, of course the council and the developers both want the affordable houses to go up first and they both want them sold quickly.

    For how long do these “affordable” houses remain “affordable”. My understanding is that the first owner/buyer is free to sell up – perhaps within months at the going ‘market prices’. Presumably the discount then disappears for all future buyers. All that’s happened is that the person who took the risk of buying the first houses on the estate first makes a super normal profit – not at the expense of the developer but at the expense of all of the rest of us as taxpayers.

    Is this policy justified? Does it actually make houses any cheaper after the first sale? Is it really a good use of taxpayers’ money?

    Or, is it really a hidden subsidy to housebuilders? Isn’t the government completely in thrall to the housebuilding lobby? Its already an obscenely profitable industry. Look at the pay received by the board at Berkley Homes. Why should we be subidising the cost of their houses?

    Who dreamt this up? The Conservative Party.

    Does it represent the people or the businesses, the electorate or the government property development complex?

  3. Bernard Parke Reply

    December 15, 2016 at 1:54 pm

    I do not know what all the fuss is about. The Tories at the last two elections said that the green belt is to stay.

    What more could you ask? They surely would not go back on this pledge.

  4. Mary Bedforth Reply

    December 16, 2016 at 5:30 am

    So will Waverley BC collect £16m from the Dunsfold planning permission for 1,800 houses?

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