Incentives For Building New Housing?

The following is a guest post from Hawkwell Councillor John Mason. He sent it to us a as a comment but it really deserves more prominence. Any response from someone in the Conservatives would be most welcome (whether they are a government supporter or otherwise)

Dear Mr Editor

Happy to oblige with a full explanation of what I call the bounty for building houses.

The Conservative Party Green Paper on Planning in February announced policy which actually has the clear objective of increasing the delivery of housing and other development.

Here are the direct quotations which support that view.

House building

In our previous green papers we have explained at length how and why we will be rejecting the current Government?s counterproductive housing targets, and instead offering local authorities a powerful council tax matching incentive to
encourage new house building. We believe this incentive will prove strong enough to produce the scale of house building the country needs. However, we will keep the level of this council tax incentive under review in order to ensure that
it does deliver.

A framework of incentives for development

We have already set out in a previous green paper our commitment that when your community builds more homes, central government will match pound-for-pound the extra money that your area gets through council tax for six years ? and when
your community attracts more businesses, we?ll let your area keep the increased business rates for six years.

Specifically, to encourage the building of affordable housing, we have decided that every new affordable housing unit that is built will earn the local authority in question 125% of the council tax raised by that unit, annually for a period of six years, to be paid through our Matching Fund.10This will induce councils to promote the development of affordable housing (by means of their local plan).

Shortly after the General Election articles in the Press confirmed “It is Tory policy to encourage housebuilding by matching authorities? council tax income from new developments.”

Then came the Con/Lib Coalition Government’s first on the 22 June 2010.

Budget 2010 – implications for planning

It was announced, inter alia, “Consider the most appropriate framework of incentives for local authorities to support growth, including exploring options for business rate and council tax incentives, which would allow local authorities to reinvest the benefits of growth into local communities.”

We now await formal announcements on the delivery of the Matching Fund from DCLG Ministers, either Grant Shapps or Greg Clarke.

But this is what we can expect in financial terms from the Times (12 June 2010).

Mr Shapps said: ?An authority that ensured 10,000 new homes are put up could be in line for ?100 million over six years.”


Doing the math (?100,000,000 divided by 10,000 homes = ?10,000 which in turn = ?1666.

This is the Council Tax per year which compares quite nicely to Rochford District Council Band D and validates the math.

“From RDC’s Web Site The Council Tax for 2010/11 was agreed by Council on 16 February 2010. The total average Band D Council Tax for Rochford residents will be ?1,518.63.”

So there is no misunderstanding in my mind on the financial incentive to build more houses than you need especially at the time of further cuts because the article was quoting a Minister on just 12 June.

This is big money.

At the 190 dwellings per annum that the Council has passed this could mean for the first 5 years of the Core Strategy this is on Band D a bounty sum of ?1,442,100.

To finish my post from the same article in the Times.

“Grant Shapps, the Housing Minister, has told The Times that he will reward local authorities that give planning approval to housing developments by matching the council tax revenue collected from these homes. The money will continue for six years, with extra provided for affordable homes for first-time buyers.

Mr Shapps is determined to overcome those who object to new developments, despite allowing local people more say under the ?revolutionary? planning overhaul.”

  • Interesting. If this bonanza is obtained by District Councils, though, it will still not mitigate the ‘concerns’ (sic, read rivalry and NIMBYism) of different localities. Unless, of course, cast-iron agreements about infrastructure delivery etc can be made (or even devolved) to the actual locality concerned. Is there a growing role and brief for Parish Councils, here? It will be interesting to see if there is further legislation and powers on the way down the line?…

  • Hi Paul

    That is a very interesting comment because the Conservative Party Green Paper on Planning does envisage a role for the Parish Council’s in the new National Planning Framework which is promised as a successor to the current framework of planning guidance and policy.

    I hope that I have understood you correctly and this addendum responds to your point.

    “We will also add another layer of democratic engagement, by providing that the parish council (should there be one) in which the development takes place will count as a set of immediate neighbours for the purposes of this policy, so that developers will tend to negotiate with parish councils about their plans, and may choose to negotiate a voluntary agreement with the parish council to compensate for any loss of civic amenity. We will consult about the weighting to be attributed to the parish council for the purposes of the ‘significant majority’ rule.”

    What we do not know is when this new planning framework will be in place to enable Parish Councils to exert a pivotal role but even the Localism and Decentralisation Bill is not expected to have passed into law until the summer of 2011. That Bill might also enact the detail of the new planning framework but if not then the detail may have to come later.

    The point of interest to Rochford District is that I expect that planning approvals for at least the first five years, and may be well beyond that, will have been already been given under the current framework of planning guidance and policy which does not include the new basis of direct involvement with the Parish Councils.

    There are already planning applications to be determined in for 750 dwellings to add to those reported in the 5 year supply without double counting any of those. I expect that other large planning applications will also be submitted which will exploit the gap between policy strategy and enacted law.

  • Thanks for the clarification on this, John.

    It would, indeed, be ironic if the effect over the next few years is of a rush to avoid the local approval question by trying to get done ahead of the new legislation!

    I do hope that RDC (and similar, elsewhere) will seek to work with the spirit of the growing localism agenda, though, and not to circumvent or dodge it…

  • As the RDC Member that has recently drawn one of the shortest of straws with the responsibility for RDC Finance and Resources, I personally may have some reason perhaps to wish Cllr Mason’s dreams (nightmares?) are correct of the bounty that might arise from permitting additional housing in our District. However, I rather doubt that such largesse will ever arrive to ease my task, whether resulting from my own future actions, those of my fellow Conservative RDC Members or the savagely depleted public coffers the Coalition has inherited to work within.

    I personally recognise that there are major physical (green belt and flood risk zone) and infrastructure contraints on any much greater RDC housing allocation.

    However, in the hope that we can raise the debate above the level of NIMBYism often in evidence here to date regarding housing allocations within the RDC District, perhaps there is another issue that we should all be addressing first – namely the impact of demographic changes upon our national and local housing stock needs. From the figures I have calculated below, using mainstream estimates from usually reliable sources, you will note that even the current RDC figure of 190 houses per year may well undershoot the likely rate of growth in need by a significant amount, by over 430 homes by 2020 and over 700 homes by 2031.

    Some may argue that our RDC population is older than the UK as a whole and therefore less likely to produce population growth of the national level, but that will be more than offset with increasing longevity producing more single person (widow/widower) households within RDC’s increasingly aged existing population, and as I have reminded those Members previously, we are isolated neither from national demographic trends nor the demands of inward immigration from our surrounding areas in the County/UK/EU. Or ‘Passport to Pimlico’ anyone?

    Thus what we need to know from RDC Members and residents opposed to even the current 190 homes per year proposal, is just what proportion of our population (UK and RDC) they would be prepared to tolerate being in need of homes (effectively homeless) by by 2020 and 2031? How many homes more or less than the proposed 190 per year (i.e. declining from 0.58% to 0.54% increase per annum in the current District-wide housing stock between 2010-2031) would satisfy them or their Ward residents? Only then, in my view, can there be productive debate with them about exactly where they may wish any to be allocated sites within RDC.

    millions growth period growth required to
    % p.a. % p.a. match UK Pop.
    mid 2006 60.587 at 190 yr Rate of Growth

    est mid 2009 61.792 0.66 2006-2009 33000
    est mid 2010 62.222 0.70 2009-2010 33190 0.58 33231

    est mid 2020 66.522 0.67 2009-2020 35090 0.56 35526
    est mid 2031 70.933 0.63 2009-2031 37180 0.54 37882

    Cllr Colin Seagers

  • Thank you for your comment Colin.

    I’d be interested to know exactly where ‘your mainstream estimates from usually reliable sources’ came from. Can you be more specific?

  • In answer to Cllr Chris Black re the sources of my data.
    UK Population estimates:
    Principally from Optimum Population Trust (a charity unafiliated to any political party – Patron Sir David Attenborough plus a host of notables)
    supported by similar stats from
    Office for National Statistics
    Daily Telegraph
    all available on the internet via Bing ‘UK Population estimates 2031’ search and all very much in the same ballpark.
    Housing stock latest figure currently known to me from RDC.
    Sound enough sources?
    Calculations courtesy MS Excel and CGS, are usually reliable.
    So just what are the views of dissenting RDC Members and residents around 190 homes per annum?
    Colin Seagers

  • Colin, as I said at the meeting a figure of 190 per year ‘seems provsionally reasonable to me’. But you are justifying that figure by doing your own research on the net! That only helps make the case for Cllr Mason and Hoy’s motion asking for a housing needs survey for Rochford.

    I would be willing for the council to go ahead with a figure of 190 up to 2025. I am not happy with setting the same target up to 2031 – that’s 21 years from now , for bloomin’ sake, and will leave all the worst green field sites still in the plan.

  • Cllr Chris Black
    Your response saddens and disappoints me greatly Chris.

    You seem determined to ignore the District-wide (and beyond) points I made, presumably for the sake of your Canute-like political point scoring, apparently preferring to cater solely to NIMBYism in your local Lib-Dem wards rather than acting for your duty to the District as a whole. There are no absolute boundaries to local housing choices or needs, and you are well aware that the sensible action of working with our near neighbour authorities has already provided our housing needs figure evidence for RDC individually too, at reasonable shared cost in terms of money and officer time.

    My own research, which you signally fail to demean, is merely further evidence that tends to support the evidence base and for viewing the existing local housing allocation figures as a likely bare minimum to satisfy future local needs within our RDC constraints.

    Certainly it is a strangely inverted argument to suggest that more research effort by an individual councillor is somehow less, simply because it is obtained via the powerful tool of the internet, given it is supported by a number of widely respected and impartial sources. Undertaking it absolutely does NOT support the blinkered views of Cllrs Hoy or Mason in any way. By the way Cllr Mason’s ‘housing bounty’ article may overlook that it is not ‘new money’ in the pot, and our central funding grant will very likely be cut FIRST! So for the benefit of all our residents, I respectfully suggest Chris that you concentrate on supporting our 2011/12 onward RDC funding case via your Lib-Dem channels within the Coalition, as I will via the Conservative channels, or else heaven forbid, we may both just be forced unwillingly hand-in-hand down the housing bounty track to even greater allocation levels simply to balance our already tenuously balanced future RDC budgets!

    However, if those dissenting RDC Members are also unwilling to debate a serious long term demographic aspect of planning then I guess for them it will be a case of justifying a ‘Passport to Pimlico’, and I see little point in wasteing much time with them or this site again.
    Colin Seagers

  • @Councillor Colin Seagers

    “the current RDC figure of 190 houses per year may well undershoot the likely rate of growth in need by a significant amount, by over 430 homes by 2020 and over 700 homes by 2031.”

    “we need to know from RDC Members and residents opposed to even the current 190 homes per year proposal, is just what proportion of our population (UK and RDC) they would be prepared to tolerate being in need of homes (effectively homeless) by by 2020 and 2031?”

    You have my view as a Member, because I said in Council, in seconding the Motion, “This needs to be examined critically because I have no wish to consign people to being homeless in our district if the 196 [annual affordable provision]is right”.

    Your own research indicates that there could be homeless people in our district.

    If you would care to bring this back to Council with your figures in the form of a Motion that our housing strategy is adjusted for these reasons then I would certainly support you and even second your Motion if you wish.

    I have no doubt at all that the majority of residents expect our Council to meet these needs.

    The position is that I believe that GVA Grimley, the consultants to the Thames Gateway, should be asked, at no extra cost, to answer the questions that arise from consideration of our local needs which, as you also say include amongst others including the above “with increasing longevity [producing] more single person (widow/widower) households within RDC’s increasingly aged existing population.”

    On that issue we are in agreement because again I said in Council “Furthermore I note the comments in the SHMA about the increasing need for single homes for older people and I hope that all Members viewed the evidence put forward by Panorama last night. Both concerns are inherent in the Motion.”

    These are not included in the quota of affordable homes and I cannot find any figures in our Core Strategy that define this need so that housing developments are designed with this requirement in policy.

    So if we want to be sure that we are really making the right decision then I would say that we need to commission GVA Grimley to delve further into their research and extract figures and recommendations having carried out a housing needs study for Rochford District and adjust the housing allocations proposed in the Core Strategy to satisfy the minimum needs of our community.

    I hope that the Government Planning Inspector considers these issues when she examines the Council’s new proposals when the public examination hearings on the Core Strategy resume on 7 September. Is it SOUND or UNSOUND?

    In an extended article on my own web site I had already recognised that the cost in income terms of the Zero Council Tax Increase Year more or less equates to the matching funds which will be paid by Government in house building incentives.

  • Colin, first of all, on the issue of helping Rochford DC get adequate funding – we’ve never really had a fair share of government funding in the past 20 years, but of course I will do my best.

    As for the housing figures – ‘When all else fails , call someone a NIMBY.’

    Ah well, for the umpteenth time – The Lib Dem view has been to support 220 houses on Rawreth Industrial Estate, providing the existing businesses there are treated fairly. We oppose any builiding on the green fields between London Road, Rawreth Lane and the A1245, and we think the brownfield sites identified by Rawreth Parish Council in the centre of the parish are a better alternative.

    We distributed a map to all our residents in Downhall and Rawreth ward outlining our position and I stood for re-election on that basis.

  • I still believe there is a problem in getting our Planning Department to ensure enough ‘affordable housing’ is built in this district. Can any Councillor let the residents know exactly the percentage of ‘affordable housing’ built in this district over the last 25 years? Oh and the number of dwellings that was actually built during this time? For far too long the developers have called the shots, it is about time the district council was a little more pro-active in ensuring enough housing was affordable to local youngsters. The developers earn a fortune on these developments it is about time they gave a little bit back to the community!

  • Mike

    I would be surprised if the Council has the data to answer your question. I certainly cannot. But I can agree with you that the provision of council housing and that latterly through the incarnation of social landlords has, according research papers I have seen, fallen short of the needs of younger people since the 70’s.

    AS you kinow I raised these concerns in Council together with the issues of policy for provision of homes for single older people and older couples wishing to downsize to homes which are in or very near town centres instead of further away in green belt where the major developers find the economic mix of the dwellings that they wish to provide acceptable to them.

    I think that the big problem here are the requirements of Government Policy PPS3 which states the percentage of affordable homes that must be provided and where, sadly, these are in the wrong place from a sustainability perspective.

    Perhaps the new Government will address this issue in its new National Planning Framework?

    I do not see it “passport from pimlicoesque” to suggest that we can make affordable homes and those for older people through some sort of local eligibility scheme to meet local needs.

    It is interesting to note that the house building icentives and the cost of the zero council tax increase year equate.

    This means that Rochford District Council might not have to make any cuts.

    Personally I would still like to see the council consult with residents on big cuts and where agreed under the Big Society umbrella implemented but that the house building incentive monies are used instead to create a form of local eligibility scheme to meet local needs at both ends of the housing needs age boundaries.

  • Mike, like John I don;t have the data to answer your question. The term “Affordable Housing” wasn’t even in use 25 years ago. Though I can remember my colleague Sylvia Lemon at that time expressing concern that too many 4-bedroomed detached houses were being built back then. After that, retirement flats became the new trend for developers….

    I believe the only planning permission granted in the past 12 months for affordable homes in the District were the flats near Asda (though I could be wrong)

  • John, Chris, thanks. That just goes to confirm my views that Rochford District Council (with exceptions)are not working for the good of the community they are representing. It is absolutely horrendous that we can allow big housing developments to be built in the district (and not just Rayleigh,I might add)without taking into account the local community and their needs. These developers are earning big bucks without having to give anything back to local people. I am not saying that all developers are the same, maybe there should be a ‘beauty parade’ of developers and the developers who are most community orientated should get the contracts? that sounds fair to me? It happens in business. People who work locally will not be able to pay the prices most of these houses are marketed at. Lets give the youngsters who were born and brought up in this district a break, for once. This really would be putting local people first.