WINCHESTER City Council is set to receive £2m in Government money in 2014 as part of the New Homes Bonus.
But councillors say the cash won’t be pumped back into building new homes, but instead spent on subsidising council tax.
The New Homes Bonus has seen construction at its highest since 2007, with 90,000 new homes built across the South East, with 207 in Winchester in 2012/13.
City councillor Tony Coates, portfolio holder for new homes, said the £2,097,893 bonus won’t be spent directly on more new homes for the area.
He said: “We haven’t spent the money on new homes. It’s a reward and I know the government would like us to spend the money on new homes but we have had to spend it elsewhere due to budget cuts.
“At the moment it’s subsidising the council tax, it’s not going up but council tax payers are being subsidised.”
He added: “It will form part of general income and expenditure.”
Despite the bonus not directly funding new builds across Winchester, the council has planned for 357 new homes for 2013/2014 – that’s 150 more than the previous year.
Authorities are free to spend the bonus however they choose, whether it’s freezing council tax, providing new facilities or supporting local services.
Eastleigh Borough Council and Test Valley Borough Council will also see their share of the £320m spent across the South East region in 2014/2015, receiving £1,807,598 and £2,723,193 respectively.