ANOTHER cash boost is heading to Worcester's coffers - with the Government handing it an extra £284,986 as a reward for allowing new house building in the city.

The council has been told that its New Homes Bonus kitty, a grant dished out every year as a salute to cities which oversee development, will rise to £1.7 million for 2015.

The extra top-up is because 228 new homes have been built in the city over the last year, as well as 15 old ones being brought back into use.

But the announcement has sparked a new row between the parties, with Worcester MP Robin Walker attacking proposals by Labour to scrap the fund.

Labour's Hilary Benn, the shadow communities secretary, has called the scheme "regressive" because it dishes extra funds to more affluent areas which developers flock to rather than economically depressed ones.

He has already said a Labour Government, if formed in 2015, would replace it with a "fairer" funding scheme.

The Conservatives have pledged to carry it on until 2020 if they stay in power, and if that is the case the kitty would have been worth more than £12 million in total to the council over the next five years rather than the old figure of £11.2 million.

That is because the £284,986 top-up will repeat itself in each of the next five years if the current Government stays in power.

As your Worcester News revealed last month, the city's Tory administration is now planning to use one third of that fund to prop up the general budget.

Mr Walker said: "It is great news that the New Homes Bonus is delivering for Worcester once again.

"It has now risen in each of the last three years and looks set to continue to grow so long as we have a Conservative led Government.

"This is a great policy which has made a real difference in Worcester and I hope it will continue to do so for a long time to come.

"I find it incredible that Labour want to scrap the New Homes Bonus and deprive councils of the support that it can provide.

"This would be bad for Worcester and bad for affordable homes."

But his comments have bemused Worcester Labour Party, which is against moves to put a third of the fund into the general budget, insisting it is risky.

Councillor Richard Boorn, Worcester Labour group's finance spokesman, said: "The council's whole Medium Term Financial Plan (a five-year blueprint) should be re-done - we certainly cannot rely on this money given what Hilary Benn has said.

"Labour's argument is that the New Homes Bonus needs to be changed so it helps depressed areas more and is fairer.

“I don’t know how you get paid at your work but when I do, if I’m handed a ‘bonus’ I treat it as just that, a bonus and not something to rely on.

“It’s all very well saying it’s worth £1.7 million next year but look at the way local government is being treated generally.

"Robin Walker stood up for fairer education money because he could see how Worcester wasn't getting its proper share, there are clear deficiencies in his argument."

The general Government grant for Worcester next year is around £4.2 million, a reduction of 16 per cent, which is in common with local authorities around the country – meaning the extra £284,986 ‘extra’ bonus gets nowhere near filling that gap.

Until now the council has been one of only 35 authorities in the UK to not use the bonus cash to prop up the general budget, but from the spring one third will be ploughed in.

Until now the New Homes Bonus was spent on affordable homes, regeneration schemes like High Street repaving, or any other suitable ideas for boosting the economy.

Two thirds of it will now be spent on improving Worcester as a place.