Communities to be offered cash incentives to accept new homes

http://www.guardian.co.uk/politics/2013/jan/10/communities-cash-incentives-new-homes

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Local neighbourhoods could win control of infrastructure budgets worth up to £300,000 in return for allowing homes to be built, the planning minister will suggest on Thursday as he warns that there is "no painless way to make homes affordable for working people earning ordinary wages".

Unless the country changes course, Margaret Thatcher's dream of a property-owning democracy will shrivel and "home ownership will revert to what it was in the 19th century: a privilege the exclusive preserve of people with large incomes or wealthy parents", Nick Boles will say.

The warning comes as he suggests Britain needs to build 270,000 homes a year, around double the number built each year between 2000 and 2010.

In a speech to Policy Exchange he will say: "There is only one choice for a Conservative. To accept that we are going to have to build on previously undeveloped land." Boles blames a decades-long refusal to release enough land for development and what he describes as top-down targets established by Labour.

But he sets up his own clash with local councils by threatening to strip them of responsibility for housebuilding if they fail to act. He says 90% of England is not built-up and around 40% is protected from development – four times the area that is built on.

In his speech, Boles will say: "Councils which do not produce credible plans to meet local housing need will find that the presumption in favour of sustainable development will trump local decisions."

These councils will "have to explain to local residents why their failure to produce a local robust plan exposed their communities to speculative development in places where it is not welcome".All councils, he says, must immediately set out plans for how sufficient homes will be built in their locality over the next five years. The consequences of failure to build will mean families squeezed into overcrowded properties without gardens.

Warning about the impact of an escalation in house prices, he points out that in the 1990s an average person needed to set aside 5% of their income each week for eight years to save for a deposit on a house, but today the same person would require 47 years.

Boles will set out incentives for residents to allow houses to be built in their area. Neighbourhoods that accept development will get 15% from a new community infrastructure levy up to a maximum of £100 per existing household.

Bodies such as parish councilsthat draw up a neighbourhood plan as set out by the Localism Act, and then have it approved in a local referendum, will be able to keep a higher rate of 25% of the community infrastructure levy with no limit. As many as 300 parish councils are currently drawing up such plans.

"What we've decided is that for those areas that have a neighbourhood plan and get it through a referendum then 25% of the revenues from the community infrastructure levy will go to the neighbourhood to spend on what the hell you like," Boles said on BBC2's Newsnight. "That money will come to you if you build new houses."

He described the money as a "bribe", adding: "I wanted to call it the Boles bung."