A freedom of information request by the Home Builders Federation (HBF) has revealed local authorities in England and Wales are sitting on over £9 billion of developer contributions paid as part of planning agreements for new housing developments. The “ongoing failure” of local government to use the money is undermining support for new housing and threatens the government’s ambition to build 1.5 million homes this parliament, HBF chief executive Neil Jefferson warned.
Responses from 243 local authorities show £6.6 billion remains unspent from Section 106 agreements, with £2.2 billion raised through the Community Infrastructure Levy (CIL). Around £3 billion has been held for more than five years, despite many agreements requiring funds to be used within that timeframe. To place the amount into context, the 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, HBF pointed out.
The federation found the issue is particularly acute in a small number of authorities: the London Borough of Tower Hamlets alone holds over £260 million in unspent developer contributions, nine times the national average on a per-household basis.
“Local authorities are reliant on developer contributions, given as part of the process of granting planning permission, which are equivalent to 46% of local government spending on housing and communities, according to the Competition and Markets Authority,” HBF explained.
“However, unspent Section 106 and CIL funds are rising, despite overall developer contributions falling in line with reduced housing supply, compounding concerns about future infrastructure funding. The scale of unspent funds, therefore, represents a significant opportunity cost for communities.”
In several areas, particularly in London, the amount of unspent developer funding held per household represents a substantial proportion of the average council tax bill. In Hammersmith and Fulham, which holds the highest level of unspent affordable housing contributions at £30.5 million, average house prices are 16 times average earnings, making it the fourth least affordable district in the country.
While many local authorities cite pre-allocated funding structures and limitations in staffing as reasons for delays, the length of time that substantial sums remain unspent raises increasing concerns about inefficiencies in spending and delivery – with a third of Section 106 funds held unspent for more than half a decade, up from a quarter of funds in 2024.
Transparency in developer contributions is declining, the analysis found, with a growing number of councils failing to publish Infrastructure Funding Statements (IFSs) by the statutory December 31 deadline. In 2020, 90% of councils met the deadline to report receipts, spending plans and unspent funds. By 2025, that number had fallen to 75%.
“With government prioritising economic growth and aiming to deliver 1.5 million new homes during the parliament, unlocking the £9 billion currently sitting in council accounts represents an immediate opportunity to boost much-needed infrastructure improvements in communities and build support for new development,” HBF said.
Jefferson added:
“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.
“It’s great that government has, in recent weeks, taken some action in supporting local authority funding, but the underutilisation of developer contributions is a damming indictment on the ability of local councils to deliver to their communities. Urgent action is needed to ensure this money is spent promptly, supporting communities, improving local services, and driving growth.
Home Builders Federation: 2026 unspent developer contributions
