Cllr David Hodge is the Leader of Surrey County Council and Chairman of the County Councils Network
When we first heard Whitehall’s aspirations for the New Homes Bonus (NHB) in 2010 CCN supported its initial promises around new homes and local growth. But under new proposals local government could lose money for every new home built. We can’t let the New Homes Bonus become a No Homes Bonus!
Initially, the scheme came with a six year guarantee to provide investment in local services following the building of new homes. We need this resource to support the creation of the jobs and growth new communities need while maintaining local services.
We therefore were shocked when Whitehall announced that a significant proportion of NHB allocation would actually be pooled into the Single Local Growth Funds, money that councils cannot access independently. One option even intends to entirely remove the allocation for county councils.
With the NHB potentially funded primarily from existing grants in 2015/16, counties face losing the money already promised to them and already built into their budgets. Leaving asides the arguments about fairness, this has potentially left some counties unable to support projects vital for local growth, like the roll out of rural broadband.
Effectively, county councils face a top sliced additional cut in the Revenue Support Grant for every new home built in England, leaving us with a No Homes Bonus!
Why does this matter? Well, county councils are under enormous strain to even deliver statutory services. Though many have some reserves, county financial managers are simply hedging against unexpected shortfalls and future demands, we would be recklessly disregarding CIPFA’s guidance to do otherwise. We are facing a situation where we cannot divert money to growth promotion, at a time when all agree growth promotion is one of counties most important strategic tasks.
What do we ask of Whitehall? Acknowledge that the proposal which requires county councils to pool their NHB is a counter-productive non-starter. Instead the Government should be showing their commitment to local growth by devolving more from Whitehall-controlled budgets in skills, transport and major infrastructure development to the county level.
The logic that applies to City Deals applies twice as strongly to counties; give us the tools necessary for driving growth. County Councils want to fully support Local Growth Deals and deliver more homes, but without the resources of the NHB, we’re fighting the battle with both hands tied behind our backs. Can someone in Whitehall free us from these shackles?