Northern cities and London boroughs stand to gain the highest amounts from the New Homes Bonus.
Housing Minister Grant Shapps has allocated bonuses totalling almost £200m to councils for the first year of the scheme in 2011-12, based on the increase in homes in their areas in the year to October 2010. The bonus will see the Government will match the council tax raised from new homes for six years.
Mr Shapps said this would be equivalent to an average £9,000 for each Band D home or almost £11,000 for an equivalent affordable home. Councils also receive the bonus for bringing empty homes back into use.
The Government has earmarked £946m for the bonus over the period to 2014.
Tables from the Department for Communities and Local Government, see right, show that the highest bonus will go to Tower Hamlets LBC, at £4.29m next year for 2,934 new homes built in the year to October, although it had an increase of 252 empty homes.
Other councils awarded more than £2m next year were: Birmingham City Council, Bradford City Council, Bristol City Council, Islington LBC, Leeds City Council, Manchester City Council, Milton Keynes Council, Salford City Council and Southwark LBC.
The bonus is intended to make development acceptable to communities in areas where there is public resistance to building homes, because councils can spend it as they see fit.
“Rather than feeling the strain of new homes through extra pressure on local services local residents will feel the direct benefit as they get to choose how the money is spent,” Mr Shapps said.
Five councils, though, had such low new build rates that they will receive no bonus.
The bonus has been welcomed by the development industry. Stewart Baseley, executive chairman on the Home Builders Federation said: “The country is facing an acute housing crisis and it is imperative we have a planning system that delivers sufficient land for the homes we need.
“The New Homes Bonus is a crucial part of any new incentive based structure.”
But the Campaign to Protect Rural England has warned that the bonus system may be unlawful.