The Welfare State We're In, The website of the book by James Bartholomew
November 15, 2010
A measure to reduce the cost of housing

Housing is a welfare issue. The cost of housing affects everybody and it affects the poor most seriously. The cost of housing in Britain is much higher than in some other countries, partly because of the difficulty of getting planning permission (please use the search facility to find the posting mentioning Redrow for more on this).

The new government seems to have recognised this through the measure below. It should probably be getting more attention than it has so far.

The government has created a £1bn funding pool to reward local authorities for pushing ahead with new housing developments, in a move that brings much needed clarity to the housebuilding industry.

Under the New Homes Bonus incentive scheme, announced by Grant Shapps, housing minister, on Friday, the government will match the council tax that local authorities generate from new homes for the first six years.

“For too long communities have fought against development because they can’t see how it does anything to improve their lives. Centrally imposed targets created a bitter legacy of animosity between developers and local communities, who fought pitched battles through the planning system, with councils permanently caught in the crossfire. I’m determined to change this,” said Mr Shapps.

The full story in the Financial Times is here.

I wonder if this is an example of a think tank really changing policy. Four years ago, a think tank compared planning laws in Britain with those in Germany and Switzerland. There was a series of three publication. The Policy Exchange booklet I still have was called Better Homes, Greener Cities and was written by Alan W Evans and Oliver Hartwich. It was excellent research which pointed out that in Switzerland, I think, local authorities gain financially when they allow development. So the local authorities and their tax and council taxpayers benefit financially. This creates an incentive to allow development to counter the obvious reluctance people have to allow development in their backyard.

The Coalition government seems to be introducing something along these lines. How much difference it will make I do not know.

Posted by James Bartholomew • Indexed in Housing

Comments (2) TrackBack (0)


Hi James,
Excellent news indeed - and just about what we proposed at the time. I'm really excited to see it happening.
Cheers from Sydney,

Posted by: Oliver Marc Hartwich at November 15, 2010 11:24 AM

I am not trying to deflate you but your article is a little out of date.
We will all have to wait until Pickles & Company announce their new Bill very shortly.
In any case the number of new homes (private and social) to be built over the next 15 years will be as high as 300,000 per annum or around 4,000,000. So how is this to work if the NIMBYS have there way?

Posted by: Barrie Hoar at November 30, 2010 06:04 PM

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