Minister for Housing and Planning Yvette Cooper launched a consultation on planning and housing incentives, to help local authorities to respond to the local housing needs of their community.
Under the current financial framework, local authorities have only limited short-term incentives to respond to housing needs. Current figures show that there are over 200,000 new households being formed each year due to an ageing, growing population and more people living alone. However, only about 160,000 additional homes are being constructed a year. The Government believes local authorities do not have sufficient incentives to meet local housing need.
That is the 'backdrop' to the decision to consulting on proposals for a new housing delivery grant and reforms to the existing planning delivery grant, to benefit local councils who respond to local housing demand and need to plan for additional houses. This funding would be in addition to local infrastructure investment and give local authorities the flexibility to invest in their area. It builds on the recommendation in the Barker Review to allow local councils to keep additional Council Tax receipts for new homes.
Yvette Cooper said: "We need new homes for the next generation but councils with high levels of demand also need more support and more incentives to meet local needs. Local authorities that are planning for the homes their communities need should benefit as a result. This consultation will give councils the opportunity to give their views on proposals which would give them extra investment to help deliver more new housing."
The Barker Review on Housing Supply identified a significant shortfall in the number of homes being built to meet the demands of a growing and changing population. The Government has since committed to improving housing affordability by increasing home building to 200,000 per annum by 2016. In order to meet this demand, those involved in the delivery of housing need to be supported to meet the housing demands of the community.
The Government also launched a consultation on the criteria to allocate £120m of Planning Delivery Grant for the financial year 2007/2008.