OXFORDSHIRE councils stand to lose grants worth close to £10m because of a Government agency’s huge work backlog.

Most councils across the UK are given New Homes Bonus (NHB) as an incentive to build new houses.

It is based on the amount of extra council tax revenue raised by people living in new build homes and by bringing other empty homes back into use.

But the Valuation Office Agency (VOA) – which values new homes – is months behind classifiying them and all six of the county’s councils fear they could lose out on a four-year bonus as a result.

Oxford City Council leader Susan Brown said situation is 'simply not good enough' as councils fear the backlog - which runs into thousands - is reflected across the country.

The county council would be affected along with the district and city councils because it receives 20 per cent of the funding.

Across Oxfordshire, about 1,800 homes are awaiting valuation. Council tax demand letters can only be sent out once the VOA has rated a property.

Roger Cox, the leader of Vale of White Horse District Council, said: “It’s not just our finances that are affected.

“Residents living in homes that haven’t been banded yet could end up in arrears on their council tax through no fault of their own.”

As of this week, South Oxfordshire and Vale of White Horse councils said £5m of its NHB is at risk. Another £2.3m is at risk in Cherwell district.

West Oxfordshire district is at risk of losing £1.3m, while Oxford City Council could lose £1m.

Ms Brown, the city council’s leader, said: “We have made financial assumptions over the next four years based on receiving this funding and although we sympathise with the VAO being underfunded and understaffed, it’s simply not good enough when this has a real world impact on communities within Oxford.”

A joint letter from the councils to the VAO’s chief executive, Melissa Tatton, states 1,824 properties across Oxfordshire have yet to be banded,

Of that, 580 homes in Cherwell district are awaiting banding, along with 436 in Vale district and another 431 in South Oxfordshire.

A further 228 are awaiting banding in West Oxfordshire, along with another 149 in Oxford.

A VOA spokesman said: “We have been working to increase report clearances across all authority areas.

“We know how important this funding is for local authorities and are committed to clearing as many reports as possible in time for them to benefit from the New Homes Bonus.”

The councils have written to all six county MPs asking for help.