THE BOROUGH council will be aiming to build up its housing stock in 2017 in a bid to ensure it has a steady income in the future.
The move comes as central Government looks to cut its annual cash grant to local authorities to zero in the years ahead.
Borough leaders last week learnt how much they would be getting from the Government to run local services.
The big fear had been over the New Homes Bonus (NHB), a scheme introduced in 2011 by the Coalition government to provide an incentive for local authorities to encourage housing growth.
Of this money, currently 80 per cent goes to borough and district authorities like Redditich, with 20 per cent going to county councils like Worcestershire.
The fear had been that this equation would be flipped, giving the lion’s share to the shires to help pay for adult social care.
This proved unfounded, however the time the NHB scheme is paid for has been cut from six years to four – equal to a loss for Redditch of £156,000 in 2017/18 and adding up to a further £2.5m over the following five years.
“The fear was that they would change the equation and, although they haven’t done that, it’s still a bleak picture for local authorities, and I don’t mean just Redditch but every authority up and down the country,” said council leader Councillor Bill Hartnett (Lab, Church Hill).
“As it is we will be going from receiving £4m in grants from central Government to paying the Government out of our own pocket and the people who will suffer are those whom the services we run are aimed at.”
Redditch, currently with a £1m hole in its finances, still has to set a balanced budget and Coun Hartnett said locally operated programmes like its mortgage rescue operation and buy-back scheme would be important tools in ensuring an income in the future.
Under right-to-buy, tenants have been allowed to purchase their homes, leading to a dramatic fall in council property, although the authority gets a cash receipt from the sale it loses in the rental income.
“We will be looking for acquisitions, whether we build or get people to build for us, so we can start to grow our stock up again,” said Coun Hartnett.
