The New Homes Bonus scheme, the government’s key house building strategy introduced under the localism bill, has been criticised for urging councils with declining populations to press ahead with unneeded developments by the independent think tank Centre for Cities.
In a new report the thinktank urged councils to be given the resources to plan flexible regeneration schemes rather than relying on underused government-led housing and commercial developments.
Centre for Cities said the New Homes Bonus, which is worth nearly £1bn and replaces regional planning systems introduced by Labour, is asking authorities to build new developments regardless of local demand.
It claimed that many existing regeneration initiatives had not succeeded because they did not take into account shifting economic and population growth across the country.
Although areas such as Tyneside and Manchester have had a reduction in population, thousands of new homes have been built over the last five years. The population in Liverpool decreased by 5,000 over the last five years, yet an additional 12,000 homes were built in the city.
The report concluded the government’s current regeneration strategy was doomed to failure if it repeated past mistakes.
Centre for Cities chief executive Alexandra Jones said: “The coalition is encouraging all urban areas to ‘go for growth’ through incentives like the New Homes Bonus, but the neighbourhoods grappling with industrial decline and the impacts of recession and cuts need to stabilise first.
“In the past, city leaders and national government have championed the replacement of out-of-use steel works and empty terraces with office and apartment blocks. These projects did not improve opportunities for local residents in the way they had hoped, and public and developer finance is now limited.”
Centre for Cities also urged the government to find new money to support Housing Market Renewal Pathfinder projects after it pulled funding from the scheme.
The report also called on the government to set up a new Transformation Fund to help areas struggling with population and industrial decline.