New research by the Home Builders Federation (HBF) has found that more than a quarter of developer contributions are unused after more than five years
The HBF has calculated that local authorities in England and Wales are sitting on more than 拢8 billion of infrastructure payments made by developers, including more than 拢6bn from Section 106 agreements and almost 拢2bn raised through the Community Infrastructure Levy (CIL).
The research is based on a freedom of information (FOI) survey that received responses from 208 local authorities. The responses show that, on average, councils hold 拢19m in unspent Section 106 infrastructure contributions.
Developer contributions are paid to local authorities in return for planning permission. The money is supposed to go on affordable housing, infrastructure and amenities to improve the local area. The principal source of funding from builders comes from Section 106 agreements between the developer and the council detailing what will be provided or paid for, including new school buildings, GP surgeries, parks and transport improvements.
The HBF says that by, not spending the money, local residents are not seeing the benefits of local housing developments that they should, which fuels objections to any further developments.
As much as 26% 鈥� 拢1.6bn 鈥� of the unspent contributions have been held for more than five years.
The top 20 councils collectively hold around 拢2bn, with Oxfordshire County Council holding the largest amount of unspent Section 106 monies among respondents (拢288m). 聽
The estimated 拢8bn of unspent money includes:
- 拢817m in unspent affordable housing contributions that could support the delivery of around 11,000 affordable homes
- 拢1.1bn in highways and roads contributions across England and Wales
- 拢2bn in unspent education contributions that could support 126,000 new school places
- 拢873m in unspent social infrastructure contributions that could fund around 1,000 sports halls and 4,700 community games areas .
Local authorities in major cities with communities at the sharp end of the housing crisis hold the greatest sums of Section 106 monies allocated for affordable housing 鈥� with six of the top 10 councils with the largest affordable housing sums unspent being in London.
Section 106 agreements often stipulate that they can be returned to the payee if the sums have been held too long as projects are deemed unlikely to be delivered, meaning that communities do not receive all the benefits of development that local authorities have committed to.
The results of the FOI requests showed that 80 local authorities 鈥� around a third of all those who responded to this question 鈥� have returned Section 106 money to developers in the past five years, with a total of 拢20.6m being returned in total.
Further details are set out in the HBF report, .
HBF is calling for greater transparency so that council infrastructure funding statements (IFS) state for how long money has been held and explain why infrastructure is delayed.
HBF chief executive Neil Jefferson said: 鈥淓ach year developers contribute around 拢7bn to local authorities for the provision of local infrastructure, affordable housing and education, recreational and health facilities but some councils are increasingly failing to invest this cash into the services that so desperately need it.
鈥淚nvestment in new housing delivery brings unrivalled economic and social benefits to communities but too many of these advantages are going unseen by local people. With the Government desperate to find money to invest in infrastructure to drive growth, it is nonsensical to have billions sat in council bank accounts.
"Furthermore, a lack of infrastructure provision is often cited as a reason to oppose development, yet this pipeline of billions of pounds of unspent infrastructure funding is too often underappreciated in debates about the impact of new development.
"Whilst appreciating the pressures and constraints on councils, we simply have to find a better way to ensure this money is spent promptly to benefit local communities, support local services and drive growth.鈥�
The 20 local authorities who hold the most in unspent Section 106 contributions are:
- Oxfordshire County Council 鈥� 拢287.5m
- London Borough of Tower Hamlets 鈥� 拢166.8m
- Hampshire County Council 鈥� 拢148.3m
- West Sussex County Council 鈥� 拢142.5m
- Essex County Council 鈥� 拢140.4m
- Central Bedfordshire Council 鈥� 拢105m
- Kent County Council 鈥� 拢104.6m
- City of London Corporation 鈥� 拢94.8m
- Hertfordshire County Council 鈥� 拢92.6m
- Leicestershire County Council 鈥� 拢90.8m
- Cambridgeshire County Council 鈥� 拢89.8m
- Wokingham Borough Council 鈥� 拢86.4m
- Warwickshire County Council 鈥� 拢84.3m
- London Borough of Newham 鈥� 拢72m
- Milton Keynes City Council 鈥� 拢64.3m
- Gloucestershire County Council 鈥� 拢62m
- Royal Borough of Greenwich 鈥� 拢55m
- Royal Borough of Kensington & Chelsea 鈥� 拢54.3m
- Suffolk County Council 鈥� 拢51.9m
- South Gloucestershire Council 鈥� 拢51.3m.
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