Conservatives To Pressurise Councils Into Taking Housing?

A slightly alarming interview in the Times yesterday with Conservative Shadow Housing Minister Grant Shapps:

What would a Conservative government do differently?

The Shadow Housing Minister, Grant Shapps, said: ?Whoever wins the election, funding will be under severe strain, with the need to cut the deficit. But we?re proposing a new approach to housing finance in urban areas where, for every new home built and occupied, we will give the local council ?1 for every ?1 they earn in council tax. For affordable homes, this will be ?1.25 for every ?1.?

This money would not be extra funding, but would be taken from existing funds available to councils through government grants. ?It?s a more intelligent way to change human behaviour. People will be in favour of new homes being built if it means more money for the community,? Shapps added.

There’s couple of questionable aspects to this. First of all, will people really “be in favour of new homes being built if it means more money for the community”. Is that going to make people concerned about future housing in Hawkwell or Rawreth just sit back and relax ? No.

Secondly, this scheme is going to be funded by taking money from existing funds to other councils. To quote Lewisham Lib Dem Max Calo on his blog:

Central Government Grants amount to about three quarters of a Council?s budget, it pays for all essential services and to say that part of it will be lost unless people agree to large housing developments is a gross display of contempt for local democracy.
I believe that people are entitled to the services they pay taxes for, whether they agree with Mr Shapps plans for their neighbourhoods or not, and unless we reform the tax system for every new pound of Council Tax raised by Local Authorities in Britain the Government should still give about three more according to the needs for services in each local authority, not according to how many new houses they built recently.

Imagine the consequences of this policy. Towns where the economy doesn?t thrive and investment lacks would be condemned to increasingly smaller budgets and poorer services, in other places cash strapped Councils would allow unsuitable developments to happen only to get the extra cash needed to cover the gaps that the Tories plan to produce in Councils all over Britain to cover the cost of this incentive system.