GOVERNMENT ministers have been accused of hiding behind multimillion-pound grants in order to slash even more money from council budgets.
Housing minister Kris Hopkins announced this week that Sunderland is due to receive a £2.2million boost as part of the New Homes Bonus scheme.
But city council leader Paul Watson called the programme – said to be an incentive for new development – a smokescreen drawing attention away from yet more cuts.
“The figures published by the Department and Local Communities suggest that North East local authorities will benefit financially from the New Homes Bonus Scheme,” Coun Watson said.
“In reality, because of the way the scheme is designed, rather than a bonus the North East is likely to lose out to the tune of £13million in 2014/15 due to cuts in other grants made to fund the New Homes Bonus scheme.
“Because it is partly funded by top-slicing local government grant funding, the impact it has on deprived areas like Sunderland is grossly unfair, which is why this is something we’ve been lobbying Government about.
“Sunderland may be receiving £2.2million in New Homes Bonus, but we’ve lost much more than that due to other grants being top-sliced.”
He added: “By our reckoning, since 2011 when the bonus was first introduced, Sunderland has lost £4.8million as a direct result of this scheme – £4.8million that would have been used to fund vital services such as those to support adult social care and other essential services.”
However, social housing provider Gentoo has welcomed the funding, which it hopes can be used to extend housing stock.
Chief executive Peter Walls said: “The announcement that £2.2million will be paid to Sunderland City Council is great news for the city and shows the continued commitment to building new homes and bringing empty homes back into use in the Sunderland.”