02 November 2007
Local authorities are to be offered incentives to free land for housing and make better use of empty properties, under government plans published on October 26.
A total of £510m will be available to councils in 2008/11 through a new housing and planning delivery grant – £85m more than under the scheme it is set to replace.
Councils showing an annual increase of more than 0.75% in the number of homes in their area will receive £1,100 for each extra one, as well as developer contributions and other infrastructure funding, said housing minister Yvette Cooper.
But the Local Government Association, while welcoming the extra money, said it was wrong to penalise councils in more densely populated areas that have less development land.
The new grant is due to replace the planning delivery grant, worth £425m over the past three years. Whereas the PDG rewards efficient turnaround of planning applications as well as plan making, the new grant will focus solely on development.
Councils that fail to identify enough development sites to attract extra money will be forced to rely on higher planning fees. These might need to rise by more than 50%, says the LGA.
Caroline Green, senior policy consultant at the LGA, said the government seemed to be urging councils to go 'hell for leather' for extra housing. 'That has to be balanced by quality and sustainability or else we will repeat mistakes of the past and throw up houses simply to meet targets,' she told Public Finance.
Launching consultations on the new grant, Cooper said that outdated regional targets should not be seen as a ceiling for authorities wishing to build more homes. Councils that look 15 years ahead and identify land would be further rewarded.
'We want to give more support to communities and councils who are doing their bit to deliver the extra housing needed,' she said.
Cooper was speaking on the same day as a new government advisory body claimed that ministers should aim to build 270,000 homes per year by 2016 – 30,000 more than proposed in the housing green paper.
Stephen Nickell, chair of the National Housing and Planning Advice Unit, launched in June, said: 'In the long run, the country will need to deliver even more homes if we are to stabilise housing affordability.'
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