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London councils top list of unspent developer contributions, report finds
A number of councils have retained “substantially more unspent funds” from Section 106 agreements than others, fresh research from the Home Builders Federation (HBF) has found.
A number of councils have retained “substantially more unspent funds” from Section 106 agreements than others, fresh research from the Home Builders Federation has found #UKhousingThe HBF submitted Freedom of Information requests to local authorities and received 208 responses. It also weighted the data according to the number of households in each local authority.
The HBF reported that the London Borough of Brent topped the list. The council holds £1,517 per household in unspent contributions.
This is seven times the national average of £210 and 100% of the average council tax bill. Brent has been contacted for a response.
Second was the Royal Borough of Kensington and Chelsea (RBKC), which holds around £1,300 per household, with £88m unspent, the HBF revealed.
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An RBKC spokesperson said the council’s current unspent balance for affordable housing was £19.9m, of which around £8m had been allocated and the remainder was earmarked for its new-homes programme.
Section 106 is an agreement between a developer and a council that often includes a financial contribution towards the cost of infrastructure and a commitment to provide affordable housing on a scheme.
Three of the top 10 councils holding unspent funds are in London. The other seven are in rural areas across the country.
Overall, around 45 councils hold at least twice the national household average in unspent contributions.
In total, the HBF estimated that £800m in Section 106 contributions allocated for affordable housing are held unspent across England and Wales.
More than a quarter of the money is estimated to have been held for longer than five years.
The organisation said councils might be holding such high sums due to insufficient staffing, poor records of contributions received and a lack of transparency regarding infrastructure funding statements.
However, in response to a similar study by the HBF last year, the Local Government Association said that while funds “may be classed as unspent”, it was “important to look at what has been allocated by the council instead, to understand how the council plans to spend the money”.
The HBF called on councils to outline the reasons why developer contributions had not yet been spent and how long money had been held for on infrastructure funding statements.
It said: “Ultimately, we hope that more transparency about how developer contributions are monitored and handled by local authorities will increase public understanding of such provision, speed up the delivery of infrastructure projects, and create a more informed, sensible debate about housing supply.
“While many councils hold reasonable amounts and will spend their contributions over the coming years, the analysis suggests that some local authorities hold disproportionate amounts and are struggling to spend these sums within appropriate timescales.”
Last month, it was announced that the Building Safety Levy had been delayed by a year on all new-build residential properties, after house builders, led by the HBF, said it would threaten the government’s target of building 1.5 million new homes.
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