High housebuilding levels bring in £54 million to Greenwich Council – what is the New Homes Bonus?

High housebuilding levels bring in £54 million to Greenwich Council – what is the New Homes Bonus?

A fund has brought large sums of money into Greenwich Council’s coffers in recent years. The current year’s total was recently announced by central government at £13.7 million and brings the total to more than £54 million since the fund commenced in 2011/12. But what is it, and where is it going?

New homes coming to Woolwich

Back in 2011 the coalition government established a scheme called the New Homes Bonus that brings in money depending on the number of homes built in each authority. A bonus is paid in addition if homes are “affordable”.

This has brought increasing sums to Greenwich Council as the authority has some of the highest building levels across the UK.

Local Government has seen very heavy cuts in their budget in recent years. There’s little doubt of the effects in various areas,but there have been some new sources of income too, and one of them is this fund.

Here’s a breakdown of income per year:

  • 2011/12 – £924,000
  • 2012/13 – £3.15 million
  • 2013/14 – £5.8 million
  • 2014/15 – £7.6 million
  • 2015/16 – £10.8 million
  • 2016/17 – £13.5 million
  • 2017/18 – £13.7 million

The current year’s sum is in the top 10 of 356 authorities nationwide.

New homes in Woolwich

Looking at other local authority income from this fund  shows Greenwich is receiving healthy totals with its £13.7 million this year:

  • Lewisham will receive £10.1 million.
  • Bexley – £3.9 million.
  • Newham – £11.4 million
  • Southwark – £12.8 million.

These are clearly big sums for councils and yet many people seem unaware of this money. Government advice is for local authorities to consult on spending priorities but I cannot recall Greenwich Council, for one, ever doing this. Have they?

The money isn’t ringfenced so can cover various areas. One obvious priority would be increasingly the numbers of staff in the Planning Department.

More homes equals more income which means Greenwich encouraging more applications through things such as the Core Strategy, which foresees the third highest numbers of homes out of 33 London authorities.

Plans for towers at Abbey Wood near Crossrail

Unfortunately, as we’ve seen through a litany of recent Greenwich Council Planning Department failures costing residents dear, deep problems exist within the department and extra income dating back years doesn’t seem to have alleviated problems.

Some of the cash is now taken by the Greater London Authority and the pooled sum goes towards a fund for councils to bid towards. Unfortunately Greenwich Council have missed out on winning many bids due to a lamentable record in this area.

Couple that to a Planning Department, amongst others, not utilising Section 106 payments to improve areas to any great degree and areas aren’t benefiting from high levels of housebuilding.

Section 106 payments also brought in around £11.4 million in 2015/16, as covered here. So in that year new construction brought in £26.2 million through NHB and S106.

Income will possibly increase if anything in coming years.

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Murky Depths

9 thoughts on “High housebuilding levels bring in £54 million to Greenwich Council – what is the New Homes Bonus?

  1. Although we welcome all the new homes being built in the Royal Borough of Greenwich which are needed to meet the housing shortage. Many residents would like to see a little more investment to upgrade the existing housing estates built in the 1920’s 1930’s 1940’s and early 1950’s many of which are houses. These homes need to be made more energy efficient
    Most of the estates built since the 1960’s have either been demolished or due to be demolished to be re-developed,

  2. Ive long known that section 106 brought money that Greenwich and its councillors (Labour!) never used on poorer areas but hearing about this addititional cash makes me more angry.

    What excuse is there for the rotten state of so much public housing both inside and out (and parks and shopping areas) when theyre cheek by jowl to developments that have brought millions and they never benefit.

    I can’t believe a Labour council would do this. Many councillors don’t deserve the party membership.

    I know some of this cash is to make up issues in areas like social care (though so did this years 5% council tax rise) but many people moving into expensive developments are not heavy users of social care so aren’t adding much strain. So where’s the cash going?

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