HACKNEY and other London boroughs have been given millions from a government initiative to reward councils that build new homes, although the accommodation would have been built anyway.

A Labour MP learnt, in a parliamentary question to Planning Minister Nick Boles, that Hackney, Tower Hamlets, Islington and 14 other local authorities in England received more than £10 million under the Coalition’s New Homes Bonus (NHB) scheme.

The member, Nick Raynsford (Greenwich and Woolwich), told the Evening Standard that the initiative to reward councils that build new homes was a flop.

The £3.3 billion NHB scheme aims to give grants to councils that oversee large-scale construction of homes, usually by housing associations. Housing minister Mark Prisk predicted it would lead to the building of 400,000 additional properties.

Raynsford, however, says: “Only 98,000 new homes were started in England in 2012. Not only is this less than half the numbers required to keep pace with household formation, it is also 11% below the already inadequate level recorded in the previous years.”

Despite the Government’s claim to be supporting homebuilding, it was presiding over a crisis showing no signs of ending. A savage cut in public investment had effectively put an end to the supply of new social lettings.

Raynsford adds: “The Government’s preferred model, called ‘affordable rent’ lettings, involves much higher rent levels.”

The progress report on the scheme comes soon after Loving Dalston revealed that Hackney council has been opposing government plans to boost the housing stock.

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