YORK’S new housing chief has warned that a flagship Government housing scheme could create a homes “crisis” for the city.

The New Homes Bonus is aimed at boosting house-building by rewarding councils with cash for each new property constructed in their area, but has been criticised for benefiting local authorities in the south more than those in the north.

The Unison trade union claims the scheme will be financed by taking money from the formula grant, the biggest source of Government funding for councils, with the amount each authority gets depending on the number of new homes built the previous year.

Coun Tracey Simpson-Laing, City of York Council’s new cabinet member for health, housing and adult social services, said: “The scheme will only work if new homes are built, so the less homes built, the less money the council will receive.

“The Government’s idea is that councils should use this money to build new homes, but, with land costs, the £700,000 received for last year would amount to perhaps five homes in York if land had to be purchased, or between eight and ten if the council had land to build on. This will not help York’s affordable housing issue.”

She welcomed the fact money received could also be used to bring empty properties back into use, but said the south, with massive building programmes and higher council tax rates, would generally benefit more than the north.

She added: “If the Government think this scheme will stop their funding of social housing building, York, along with other councils, will have an affordable housing crisis on its hands in future years.”

Unison has said York would receive £1.48 for every pound taken from its formula grant, with Selby getting £8.76 and East Yorkshire getting £1.09. Some southern authorities would receive more than £20.

But a spokesman for the Department for Communities and Local Government said: “Unison’s claim that there is no new money is simply wrong.

“The New Homes Bonus scheme is fully funded with new money in the first year and will receive almost £1 billion of new money over the next four years.

“Three of the top five earners this year are in the north or Midlands, because the extra cash is not only going towards building new homes but also encouraging councils to bring old homes back into use.”