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Urgent review of New Homes Bonus scheme demanded

The Public Accounts Committee has called for an urgent review of the government’s New Homes Bonus scheme

The move comes after a report slammed the scheme for benefiting areas where houses were already in plentiful supply.

The committee raised concern that the government has not yet demonstrated that new homes being funded through the scheme are in areas of housing need, calling for an ‘urgent evaluation’.

It also said, that despite being launched two years ago, there was still no evidence yet as to whether the scheme was encouraging the construction of more homes.

Public Accounts Committee chair Margaret Hodge said: ‘So far the areas which have gained most money tend to be the areas where housing need is lowest. The areas that have lost most tend to be those where needs are greatest.’

She added: ‘The department [DCLG] has yet to demonstrate whether the New Homes Bonus works. Is it helping to create more new homes than would have been built anyway? Is it the best way for Government to use its limited resources to create more homes where they are needed most? Its planned evaluation of the Bonus scheme is now urgent.’

Introduced as part of measures to encourage house building, the £1.3 billion New Homes Bonus scheme is a grant paid by government to local councils for increasing the number of homes in their area.

In response to the Public Accounts Committee’s report, DCLG secretary Bob Kerslake said: ‘The whole point of the New Homes Bonus - which the committee fails to recognise - is to recognise housing growth where it occurs, with money going where those homes are needed most. That’s why we’ve committed £1.2 billion over 5 years towards this scheme, which the National Audit Office itself found has the potential to deliver up to 100,000 additional homes over 10 years.’

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