Cherwell District Council is to set aside almost half the bonus cash it gets for building new homes to make up for future government budget cuts .
At a meeting last week the council’s executive agreed how it would spend the £1,340,156 it has been allocated under the Government’s New Homes Bonus for this financial year.
Councillors decided to reserve 50 per cent of the funds – equating to £619, 958 – to make up for current and future cuts in government grants.
Councillor Ken Atack, the council’s lead member for financial management, said the decision would help ensure the council has enough money to balance its budget despite facing a 15 per cent cut in its income in 2014-15 and 2015-16 and a possible 20 per cent in 2016-17.
“This is a sensible decision and the right one for Cherwell,” he said. “We’re looking to ensure we’ve got money available for whatever projects come along.”
Mr Atack also said the council will continue to build and make new homes available so it can secure a greater slice of the bonus in future years. “These cuts are going to come anyway, we’ve just got to concentrate on areas that generate income. The more houses we build or bring back into use the more money we will get,” he said.
However, Labour group leader Sean Woodcock questioned the need for such a large sum to be set aside.
“It’s sensible for the council to plan for the long term but it’s whether 50 per cent is too high,” he said. “That money is for helping areas deal with housing growth, but if the money is sitting in a bank vault it doesn’t suggest that’s what it is going to be used for.”
However the council has agreed that £100,240 of the total bonus will provide affordable housing for residents and £450,669 will go towards economic development.
A sum of £169,289 will also be allocated to parish and town councils to assist with “planned growth” in the district.
The council’s New Homes Bonus allocation was £439,186 for 2011-12 and £703,195 for 2012-13. Each grant will be paid for six consecutive years.
The government states councils can decide how they spend the money but must consult communities.