Survey shows government grant shifts resources from north to south

A new study by UNISON, the UK’s largest union, has revealed that the Government’s New Homes Bonus Scheme is draining scarce resources away from the recession-hit north, to wealthier parts of the country in the south.

Money for the new homes scheme is deducted from local council grants and then redistributed – not on the basis of need or population – but to areas where most new homes are built which largely depends on decisions made by private developers. Building firms meanwhile are unsurprisingly shying away from poorer areas that have been hit hardest by the recession and choosing to build in areas where the profit potential is greatest.

The union is demanding that the Government puts a stop to deprived areas being penalised in this way.

A table of individual councils across England shows the scale of the loss with more than 60 per cent of the money spread between London, the South East, East of England and South West.

Among the top of the losers list are Oldham, Knowsley, Liverpool, Wirral. South Tyneside, Gateshead and Newcastle.

Oldham (loses £1 and gets back 0.11p) and Knowsley (loses £1 and gets back 15p), while the biggest winners are Uttlesford (gets back £19.34 for every £1 lost), Basingstoke and Deane (gets back £18.70 for every £1 lost) and Forest Heath (gets back £15.80 for every £1 lost).

Dave Prentis, General Secretary of UNISON, said:

“It is grossly unfair that the Government is using its New Homes Bonus scheme to shift scarce resources from the hard hit north to wealthier parts of the south. Over 60 per cent of money is spread between London, the South East, East of England and South West. It cannot be a coincidence that the Tory heartland is where most money is being directed.