CIVIC chiefs in Southampton have welcomed Government plans to give councils thousands of pounds for every new home built in their area under plans to tackle the housing shortage in the south.

The Department for Communities and Local Government unveiled proposals to give local authorities six years worth of council tax payments for each new home built.

The plan, if introduced, could net Southampton City Council some £8,681 for every average-sized property given planning consent, based on a 2010/11 council tax rate of £1,446 for a Band D building. Approving the construction of 100 such homes could bring in up to £868,104.

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Councils would be able to spend the cash incentive – dubbed the New Homes Bonus – on local infrastructure or services, such as council tax discounts for residents, boosting frontline services like rubbish collection or improving local facilities like playgrounds. The proposal follows the Government's decision to axe the regional housebuilding targets contained in the South East Plan, under which Hampshire and the Isle of Wight were expected to provide nearly 102,000 new homes by 2026.

Peter Baillie, Cabinet Member for Housing on Southampton City Council, said: “It’s vital that we move away from the top-down approach that has led to a massive waiting list and issues with housing, to one that is led by residents in communities.

“In Southampton we want to move ahead with estate regeneration. Any other projects and incentives which help authorities to empower local people must surely be positive.”

Ministers believe only by providing incentives for local development will new housebuilding, which has been declining over the past few years, significantly increase.

Housing Minister Grant Shapps yesterday urged councils to open a debate with communities about the benefits of building new homes in their area.

He said: “With housebuilding falling to its lowest level since 1924, action is needed now to build the homes the country needs. That’s why these new powerful incentives to build will be introduced early in the spending review period.

“We will not tell communities how or where to build, or how they should grow. But the New Homes Bonus will ensure that those communities that go for growth reap the benefits of development, not just the costs.”