Local authorities in England and Wales are now sitting on over £9 billion of developer contributions, intended to fund essential local infrastructure.
The money paid as part of planning agreements for new housing developments includes £6.6 billion from Section 106 agreements and over £2.2 billion raised through the Community Infrastructure Levy (CIL).
The findings from a Freedom of Information (FOI) survey, which received responses from 243 local authorities in England and Wales, show that, of the £9 billion estimated to be unspent, around £3 billion has been held for more than five years.
Placing the value of this £9 billion of accumulated funding into context, government’s annual expenditure on Affordable Housing grants is expected to be around £2.5 billion to £3 billion during the remainder of this Parliament.
The average council holds £19m in unspent Section 106 infrastructure contributions and £13.9m in unspent CIL funds.
However, the issue is particularly acute in a small number of authorities where the results influence this average.
The London Borough of Tower Hamlets alone holds over £260m in unspent developer contributions.
In Hammersmith and Fulham, which holds the highest level of unspent Affordable Housing contributions at £30.5m, average house prices are 16 times average earnings.
The research also finds that £320m in developer contributions for new healthcare facilities is sitting unspent.
Neil Jefferson, chief executive of the Home Builders Federation, says: “The balance of unspent developer contributions rising to £9 billion 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.”
