To answer questions submitted by Opposition Group Leaders on items on the agenda.
Minutes:
Question from Councillor J Walker to Councillor Virdi.
“The New Homes Bonus, brought in by the Coalition Government in 2011 and used to incentivise local authorities in England to increase the building of homes in their areas, has disproportionally went to already wealthy authorities such as ours.
How will the imminent loss of New Homes Bonus impact this Council?”
Councillor Virdi thanked Councillor Walker for her question and confirmed that the New Homes Bonus was an incentive to encourage local authorities to support housing development by encouraging local authorities to build more homes and increase housing stock, supporting economic growth as housing increased jobs, infrastructure and community investment and promoted long-term planning by aligning with government to address the national housing shortage. He was pleased to note that as a forward looking and responsible authority, the Council had done all of the above.
Councillor Virdi disputed Councillor Walker’s assertion in the question regarding ‘already wealthy authorities such as ours’ and said that the Council was a well-run authority which had made sensible operational and financial decisions and which would continue to ensure that it provided excellent services to its residents, enabled economic growth and crucially, balanced its books. He noted that this was against a background, over a number of years, of the Council not receiving significant levels of external funding running into tens of millions which other authorities had received, such as via the Towns or Levelling-up funds. He said, therefore, that such rhetoric had to be corrected and it was important for residents to understand and appreciate the ongoing financial challenges that the Council faced, that such messages were clear and also in liaison with central government, particularly with the likely implications that both Fair Funding and Business Rates reset changes would mean for the Council.
Councillor Virdi added that all types of authority in all areas, specifically those committed to economic growth had generated New Homes Bonus as the Council had and that it was not simply wealthy authorities, however you chose to define them.
Councillor Virdi said that the simple answer to the question was that the Council had prudently set its Medium-Term Financial Strategy and had assumed there would be no further New Homes Bonus from 2026/27 and that it would potentially be losing a significant income stream after 2025/26. He said that as Finance Portfolio Holder and Cabinet member, the Council supported New Homes Bonus continuing as it wanted economic growth and for that economic growth to be supported with funding. He said that the Council would make that point in its response to the Fair Funding Review and that it was the New Homes Bonus which had helped fund the magnificent offices and leisure centre of the Council and that such funding was necessary, even for the longer term with local government reorganization, as capital resources would continue to diminish and capital projects would require funding, hopefully not borrowing, with the Council currently, of course, being debt free.
Councillor Virdi summarised that although it was a significant impact, the Council had mitigated against the loss of the Bonus in its Medium-Term Financial Strategy, demonstrating, once again, its responsible and diligent approach to managing its finances, particularly with the volatility of the current government’s decision making.
Councillor Walker asked a supplementary question.
“What are we doing to make sure that we insulate our residents for what is coming down the tracks as was mentioned in the Peer Review”
Councillor Virdi thought he had answered this in his response in terms of the Council’s Medium-Term Financial Strategy which was a five year review and that the Council was anticipating and had planned and mitigated for this eventuality and that it knew that there would be an impact, which he would cover in his delivery of the end of financial year report this evening. He said that the Council had created in-year efficiencies which would further help it mitigate some of the financial impact of losing the Bonus.