Will the government's 'one fits all' approach see places such as Gateshead financing new housing in the Home Counties?
Following yesterday's Northerner post about the region's first FirstBuy house sale, which highlighted the use of Government funds to stimulate the market, here's an initiative which appears to be working less happily.
An incentive for councils to complete more new homes looks almost certain to take money away from authorities in the north and redistribute it to southern counterparts, which in general are in less need of such a helping hand.
We mustn't forget that the three most deprived wards on the national index are in London, but even there the demand for housing is keener than up here and the prices often mind-boggling. Yet the New Homes Bonus offers similar incentives across the country; and it draws its 'bonus' from the overall local government spending pot; the sort of redistribution of existing public money which became familiar with assorted 'new' initiatives under Labour.
The issue is highlighted by the Northern Housing Consortium which calculates that a north-south transfer of such funds could be as high as �101 million over the next three years. Newcastle faces a net loss of over �5 million and its neighbour Gateshead �4.4 million.
The latter's income from NHB in the first year is a mere �68,283 according to the government's own, illuminating, calculator on the New Homes Bonus website which gives an indication of the mismatch, especially when London politicians such as Labour's Jack Dromey are arguing that the bonus isn't enough to encourage the scale of new housing the capital needs. Westminster, by contrast, is getting �1,638,472.
Mick Henry, leader of Gateshead's lively council (commissioners of the Angel of the North, Baltic, Sage and winking Millennium Bridge), comments from the Labour conference in Liverpool:
Gateshead is continuing with its ambitions to improve the quality and choice of its housing stock to meet the needs and aspirations of current and future households. But this is yet another national government policy that is likely to widen the gap between the North ? where we have developed a planned approach to attract new development ? and the South, where demand is high and does not need additional stimulation. Once again, it seems that we lose out up here because of our good practice.
The NHC's figures suggest that councils such as Newcastle would have to treble local house-building to avoid a loss under the scheme; an unlikely prospect. Jo Boaden, chief executive of the consortium, says:
We are extremely concerned about the financial impact on northern local authorities. Because of the scheme design, we believe most northern local authorities will actually be net losers once the scheme is up and running. This needs to be addressed if it is to succeed.
Another issue for Nick Clegg, Tim Farron and the northern Lib Dem posse to raise over Whitehall's tables?
Alastair Cook Spending review 2010 Financial crisis Paul Myners Fulham Twilight
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