Councils in England and Wales are holding approximately £8.1 billion in infrastructure contributions from developers, as reported by the Home Builders Federation (HBF). This amount consists of an estimated £6.3 billion in Section 106 agreements and £1.8 billion raised through the Community Infrastructure Levy (CIL). On average, councils have £19 million in unspent Section 106 contributions, with 26 percent of these funds being held for over five years.
The unspent contributions include £817 million for affordable housing, which could provide around 11,000 homes, and £1.1 billion for highways and road repairs, equivalent to fixing 12.6 million potholes. Additionally, £873 million meant for social infrastructure could have funded 1,000 sports halls and 4,700 community games areas, while £2 billion could support 126,000 new school places.
The HBF notes that the total amount of Section 106 contributions has more than doubled since the previous year, indicating a backlog of infrastructure projects awaiting completion by local authorities. This delay in utilizing the funds is leaving residents uncertain about the benefits new developments are intended to bring to their communities.
Among the top 20 councils with the highest unspent Section 106 contributions, Oxfordshire County Council holds the largest amount at £287.5 million. Some councils, like Oxfordshire, have been holding onto funds for more than 20 years without significant progress on allocated projects.
The report also highlights that major cities with communities most affected by the housing crisis are holding substantial sums of money allocated for affordable housing. For example, Wokingham has the second-highest amount of unspent Affordable Housing contributions (£41 million) after the City of London Corporation (£86.8 million).
Neil Jefferson, CEO of HBF, emphasizes that developers contribute around £7 billion annually to local authorities for infrastructure projects but criticizes councils for not investing these funds efficiently. He stresses the need for a better system to ensure timely spending of these contributions to benefit local communities and support growth.
In response to the report, the Local Government Association (LGA) acknowledges the challenges faced by councils in managing development contributions and emphasizes the importance of careful financial planning and coordination for utilizing these funds effectively. The LGA reassures that unspent funds are earmarked for specific projects and urges consideration of the council’s allocation plans rather than solely focusing on unspent amounts. Please rewrite this sentence.
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