National Audit Office says government miscalculated likely boost on housebuilding

New-build, housing, houses, housebuilding, homes

The government miscalculated the number of extra homes likely to be delivered through its 拢1.3bn New Homes Bonus, the spending watchdog has said.

In a report the National Audit Office (NAO) said the policy - which pays local authorities a bonus for every new home built - is likely to deliver 108,000 homes over ten years rather than the government鈥檚 projection of 140,000.

The NAO said the government had overstated the likely boost on housebuilding due to an 鈥渁rithmetical error鈥.

The report also said the number of housing starts had 鈥渘ot increased since the bonus was introduced鈥 and it was 鈥渢oo early to tell whether the bonus will increase new housing鈥.

The NAO said there was 鈥渓ittle evidence鈥 the policy had made 鈥渟ignificant changes to local authorities鈥 behaviour towards increasing housing supply鈥.

鈥淲e found no association between individual local authorities鈥 planning application approval rates and their numbers of homes qualifying for the bonus,鈥 the report said.

The NAO also warned councils face losing large amounts of funding through the scheme, with the problem most acute 鈥渋n areas where developers are less likely to want to build new homes鈥.

The NAO did say it had seen some evidence the New Homes Bonus has resulted in local authorities continuing to convert empty homes back into use, but urged the government to urgently carry out a review of the policy.

Amyas Morse, head of the NAO, said: 鈥淲hile it is too early for the scheme to have had a discernible impact on the number of new homes, the signs are not encouraging.鈥

Housing minister Mark Prisk said the NAO report was 鈥渦nduly negative and unfair鈥. 鈥淭he new homes bonus provides a real incentive for communities to grow, to provide more affordable housing and to get empty homes back into use,鈥 he said.

Shadow housing minister Jack Dromey said: 鈥淚t is clear that the policy doesn鈥檛 work, is unfair and that ministers have failed to monitor whether the policy is delivering - what a shambles.鈥