Councils in England and Wales are sat on more than £9 billion in unspent developer contributions and the National Federation of Builders (NFB) report, ‘Section 106 and CIL: Developers Pay, but where is the money going?’, explores how the Government can ensure this money is spent.
Richard Beresford, Chief Executive of the NFB, said:
“Developers keep paying for infrastructure, but communities don’t always get it delivered. Our report highlights how we can increase accountability for delivery and recommends ways that the Government can ensure this tax on development operates more fairly.”
In September 2019, the Government agreed with the NFB that all councils should publish their developer contributions and announced that from December 31 2019 this would occur via annual Infrastructure Funding Statements (IFS).
‘Section 106 and CIL: Developers Pay, but where is the money going?‘ highlights how the language and data reporting used in IFS varies wildly across LPA’s, that money allocated to projects has no timeline or delivery requirement, and encourages councils to use their IFS as a tool for transparency, accountability and communicating success.
NFB proposes the following five recommendations to ensure the £9bn in unspent planning contributions across England and Wales starts delivering for local people:
- Infrastructure Funding Statements (IFS) are publicly searchable on a national database.
- Local Planning Authorities are required to present their IFS using a standardised format and language.
- LPAs publish ‘storyboards’ which identify funding sources and provide project delivery timelines.
- Unspent contributions (defined as non-allocated funds or projects that have not been delivered within projected timeframes) are automatically returned to developers after a period of five years.
- In areas with combined authorities (CA), unspent LPA planning contributions can be transferred to CA’s for a further two years before being automatically returned to developers (if still unspent).
Rico Wojtulewicz, Director of Policy and Market Insight at the NFB, said:
“Developers keep paying but communities keep missing out, therefore the Government must ensure that the billions of pounds collected in infrastructure taxes starts delivering infrastructure.
Housebuilders are paying increasing amounts in interest payments and government taxes, yet councils up and down the country and earning interest from allocated but unspent contributions, such as the £558,000 for SEN in Herefordshire, £53 million for education in Leicestershire and £2.3million for healthcare in Cornwall.
To start fixing this egregious situation, the Government must standardise the IFS reporting process, automatically return unspent levies and introduce a requirement to deliver so that local people can see how these contributions have been allocated and know when a project will be completed.”
