The Home Builders Federation (HBF) has released a report finding that there is over £9bn in unspent funds in local authority coffers
Updated research from the HBF has tracked a growth in unspent developer contributions that were originally intended to build schools, public transport, and other local infrastructure.
These contributions were paid into local authorities accounts as part of planning agreements including Section 106 agreements (which raised £6.6bn) and the Community Infrastructure Levy (£2.2bn).
Last year there was £8bn unspent
A similar investigation last year found that there was £8bn, with an average of £210 per household unspent in England and Wales.
The current research used a Freedom of Information survey, receiving responses from 243 local authorities. The survey found that of the £9bn unspent, around £3bn has been stuck in the bank for more than five years.
In many cases, local authorities had made agreements to use these funds within a certain timeframe, which have been broken.
On average, local authorities have £19m in unspent Section 106 infrastructure contributions and £13.9m in unspent CIL funds. Some hold much more, however, such as the London Borough of Tower Hamlets with over £269m, nine times the national average.
“Urgent action is needed”
The report also found:
- An £800m (9%) increase in unspent developer contributions since HBF last reported on this issue in mid-2024
- Almost £3bn is estimated to have been held for over five years, despite many agreements requiring infrastructure to be delivered within that period.
- £700m for Affordable Housing and £2bn for schools are waiting to be spent.
- Local authority compliance with reporting of their unspent developer contributions has fallen from 90% to 75%.
- A small number of councils hold disproportionate sums, with Tower Hamlets holding over £260m.
Neil Jefferson, chief executive of the Home Builders Federation, said: “The balance of unspent developer contributions rising to £9bn in Local Authority accounts provides further evidence of a capacity crisis in local government and should be a major cause of concern for local communities and for ministers.
“This money should be funding schools, healthcare, affordable housing and other essential local infrastructure, yet billions sit idle, in some cases for over five years. Investment in new housing brings huge economic and social benefits, but far too many of these advantages are going unseen by local communities.
“It’s great that Government has, in recent weeks, taken some action in supporting local authority funding, but the underutilisation of developer contributions is a damming indictment on the ability of local councils to deliver to their communities. Urgent action is needed to ensure this money is spent promptly, supporting communities, improving local services, and driving growth.
“New homes should be providing benefits for both new and existing residents, but the ongoing failure of local government to use this money is undermining support for new housing and threatens the Government’s ambition to build 1.5m homes this Parliament.”
The research can be found in full here.
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