Southampton Faces £2 Million Council Tax Black Hole Because Of Coalition Housing “Incentives”

Southampton faces a gaping £2 million council tax black hole thanks to the dogmatic and ideological new house-building "incentives" being rushed through by the Coalition government.

Under the Coalition's new housing rules, Councils would be given financial incentives to give planning permission for new homes. But these incentives would be paid for by the government taking an arbitrary slice out of the funding for all existing social housing.

This means that cities like Southampton, which have a large stock of social housing and little space to build new homes, will lose the most, while new and more affluent towns with lots of space and little social housing will be the main winners.

Southampton would lose an estimated £98,000 in the first year, rising to £2,048,000 (2 million, 48 thousand pounds) over six years. There would have to be 1103 homes built each and every year in Southampton just stop the council losing money under this scheme. This is nearly 100 more homes than were built in the last year of the Labour government- which was itself the most houses built in Southampton for over a decade.

Alan Whitehead, Labour MP for Southampton Test, said:

"This flawed and ill-thought through scheme will do nothing to build the new homes we need and will leave people in Southampton facing even deeper cuts to public services, and higher rises in their council tax bills.

"The Government should be building a genuine incentive and planning system to build homes, not cutting housing investment, and promoting this con of a policy around the country."

Speaking in Manchester at the Labour conference, Labour Minister John Healey said:

"Those councils that see new homes built will win but those that won't or can't build will lose out, and lose big. This scheme robs some councils to pay others. It will cause chaos in the council tax system."

"It blows out of the water George Osborne's promise to freeze council tax, and add extra pressure on council tax bills for councils already facing big grant cuts in public spending. Many councils will have to hike up council tax to cover the costs. Millions will face bigger bills as a result of this scheme".

"The Government is right to want a strong incentive system for councils and communities ready to see new homes built. But this isn't it."

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