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City Leader's Warning Over Risk to City's Growth from Diverting New Homes Bonus

Councillor Lewis Herbert, Leader of the Labour run Cambridge City Council, has spoken out after Communities Secretary Sajid David confirmed changes to New Home Bonus (NHB), which are expected to save £240 m, which will then be diverted to councils (like Cambridgeshire County Council) to be spent on adult social care. NHB is paid to councils to compensate them for delivering new homes.

Councillor Herbert said: "There is no doubt that the deepening social care crisis has been brought about by the government's failure to properly fund the social care system.The Government must end the way it has starved Cambridgeshire and other county councils of funds for the vital care provided for the elderly and children for six long years.

Their Elastoplast approach to care of breaking existing funding commitments, and "robbing Peter to pay Paul", proposes to take the money from the 'New Homes Bonus'. The budgets and plans of hard working councils like Cambridge City are being damaged, money that is essential to deliver successful new housing and support growth, and future tax receipts for Treasury may now be reduced.

As the latest Government data shows, Cambridge has been succeeding in building high numbers of the housing and affordable housing our community badly needs. That's a difficult job given the need to match it with investment in transport and essential infrastructure.  If the government really wants to boost housebuilding as it promises with a new Housing White Paper, it will reverse this cut to New Homes Bonus in fast growth areas."

Councillor Herbert added: "A recent study in Milton Keynes also showed that every new home costs local councils £1100 a year over and above council tax. New Homes Bonus helps us meet some of this additional cost and create strong new communities. Taking it away puts an unfair burden on the rest of the community, when they are entitled to a share in prosperity."

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