The scrapping of plans to sweep a portion of New Homes Bonus money into regional development schemes has been welcomed by Craven District Council.

The council, which over the past two years has received just under £1 million through the government incentive scheme, had feared it was to lose up to a third every year to the York, North Yorkshire and East Riding Enterprise Partnership (LEP).

Councillors, angry about the prospect, raised their concerns with Skipton MP Julian Smith, who passed on the council’s comments to local government minister, Brandon Lewis.

It has now been announced that the plans have been dropped and would only take place in London.

Last year, Craven council received £402,000, and for 2013/14 it received £588,000. The money has been used to fund various schemes, including £80,000 towards next year’s Grand Depart of the Tour de France, and £220,000 for work on Skipton Town Hall.

The council also plans to use some of the money to fund its core grant scheme for the last two years of its life and it has allocated £75,000 towards Connecting the Dales – a Canals and Rivers Trust project to make improvements to the Leeds and Liverpool Canal towpath.

Council leader Coun Chris Knowles-Fitton (Cons) welcomed the decision, but added it would leave LEPs with a problem.

“It is good news, but it will create problems for the LEPs in terms of revenue funding, which the New Homes Bonus would have boosted,” he said.

“The increasing sums of money coming down to them means that those authorities within the LEP footprint which don’t presently have any board representation are starting to flex their muscles.”

He said a decision had been made at the local LEP that a board of authority leaders would work in tandem with the LEP board so they were fully aware of all decisions.