Recent research reveals billions meant for local services lie unused.
- Local authorities hold over £8bn from developers, unspent for over five years.
- More than £6bn of the funds are tied to Section 106 agreements; £1.6bn remains idle.
- Major councils in England and Wales are returning unutilised funds to developers.
- Calls grow for transparency and timely allocation of collected funds to enhance community amenities.
Research conducted by the Home Builders Federation (HBF) indicates a staggering financial oversight, with over £8 billion of developer contributions remaining unspent within local authority accounts across England and Wales. This revelation emerges from a comprehensive freedom of information (FOI) survey that recorded responses from 208 councils, uncovering an average holding of £19m in Section 106 contributions per council.
Developer contributions form an integral part of urban development, aimed at facilitating improvements in affordable housing, local infrastructure, and public amenities. Primarily garnered through Section 106 agreements and the Community Infrastructure Levy (CIL), these funds are critical for local enhancements that should ideally accompany planning permissions. Yet, 26% of these contributions have languished unspent for over five years—thus failing to deliver anticipated benefits to local residents.
A significant portion of unspent funds includes £817m earmarked for affordable housing, which could potentially support the development of approximately 11,000 homes, and £2bn intended for educational infrastructure, capable of creating around 126,000 new school places. Highways contributions, totalling £1.1bn, and social infrastructure funds of £873m, meant to support new sports halls and community areas, also remain untapped.
Among local authorities, Oxfordshire County Council leads with the highest unspent Section 106 monies, holding £288m, followed closely by other key regions such as the London Borough of Tower Hamlets and Hampshire County Council. This accumulation of unspent funds highlights a broader issue of inefficiency in utilising financial resources dedicated to community improvement projects.
Crucially, the HBF report underscores that approximately a third of respondents have resorted to returning Section 106 monies to developers, amounting to £20.6m, due to delays or abandonment of planned infrastructure projects. This situation not only reflects inefficiencies but also incites public resistance against further developmental initiatives due to perceived neglect in delivering promised enhancements.
The HBF has issued recommendations urging for increased transparency in local authority financial statements concerning infrastructure funds. Highlighting the need for councils to disclose the duration funds have remained unused and provide justifications for ongoing delays, the HBF argues that doing so could alleviate community frustrations and foster trust in developmental processes. As Neil Jefferson, HBF’s chief executive, articulates: “Investment in new housing delivery brings unrivalled economic and social benefits to communities, but too many of these advantages are going unseen by local people.”
Enhanced transparency and efficient fund allocation are imperative to bolster local development and community trust.
