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Counties and districts divided over new homes bonus raid

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County and district councils are at loggerheads over the government’s decision last month to divert £241m new homes bonus money to adult social care.

In submissions following December’s local government finance settlement, the district and county councils networks have taken sharply opposed views on this change, since the bonus largely accrues to districts in two-tier areas, while counties deliver social care.

Communities secretary Sajid Javid proposed that from 2017-18 councils will only receive new homes bonus payments on housing built above a baseline of 0.4% growth.

He also cut legacy payments of the bonus from six years to five in 2017-18, and only four years in 2018-19.

In its submission, the District Councils Network (DCN) said the bonus baseline should be set at 0.25%.

It said: “The seemingly arbitrary ‘deadweight’ baseline level of 0.4% is our principal concern.

“This level was not included in the original consultation and…most councils will have reasonably assumed that the worst case scenario would be…a baseline of 0.25%.”

The DCN said a 0.4% baseline would for many councils “all but remove the incentive [to allow new building] that was trumpeted when the scheme was introduced in 2011”.

DCN chair Neil Clarke (Con) said: “The DCN recognises the need for additional adult social care funding to meet ever-increasing demand.

“But we reject the application of sticking plaster solutions which only recycle existing local government funding and seemingly benefit only 95 out of 152 social care authorities. This is robbing Peter to pay Paul.”

In contrast, the County Councils Network submission (CCN) welcomed the move but called for “targeted transitional arrangements” for county unitaries which have both social care responsibilities and new homes bonus income.

Chair Paul Carter (Con) said: “While re-routing some new homes bonus money is a logical step and a recognition of the immediacy of the crisis’ impact on elderly residents, the measures announced provide minimal support to those under greatest pressure, leaving upper-tier authorities at a significant crossroads.”

The CCN submission said the government, councils, and other stakeholders must “develop a plan to place adult social care on a sustainable footing in the short, medium and long-term”. This would need “genuinely new funding”, the CCN said.

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