Housing: New-build Homes

Lord McKenzie of Luton Excerpts

Thursday 31st October 2013 Lords Chamber

[Baroness Stowell of Beeston]

We certainly encourage local authorities to use their assets and the borrowing power that they already have. Not all councils are borrowing up to their cap, but the cap is important because it is part of our larger strategic objective, which is reducing the overall deficit, so it is not possible at this time for us to lift the cap on local authorities.

[Lord McKenzie of Luton (Lab)]

My Lords, the Minister will be aware of an NAO report on the new homes bonus that found that the Government had got their sums wrong. Assumptions were unreliable, unrealistic and contained a substantial arithmetical error. It found little evidence that the bonus is increasing approvals for housing. It said that the Government were not monitoring the impact of £1.3 billion of taxpayers’ money and that the new homes bonus was unfair in its distribution. The PAC has called for an urgent review of the new homes bonus. Will the Minister support that?

[Baroness Stowell of Beeston]

As we made clear yesterday, and as was always the case, we are already reviewing the new homes bonus scheme; that report will be published next Easter. The most important thing to say to the noble Lord is that we are disappointed in the NAO’s report because it seems to miss the point of the new homes bonus. It is there to do what is says on the tin: to reward councils that help to build more new houses. That is what we are trying to do. We want to make sure that those local areas that build more houses attract and receive the benefit of doing so in their area.