Report also calls for more flexible rules to help councils spend money
Councils should face a five-year ‘use it or lose it’ rule for developer contributions, according to a new report from an influential Labour-linked think tank.
The Fabian Society points to £6.3bn in unspent contributions across 233 English local authorities, including £1.1bn earmarked for schools and education, urging measures to help councils spend this money more quickly.
The report, which was funded by Hallam Land and Shoosmiths, argues for action to unlock unspent funding, as well as measures to give councils more flexibility and greater capacity to deliver infrastructure.
It warns that failing to deliver infrastructure alongside new homes can delay development and undermine public confidence.
Polling cited in the report found that just 18 per cent of people would support new housing in their local area without things like schools, bus routes and GP surgeries.
The Fabian’s Housing Centre found several reasons contributions are unspent, including a shortage of specialist council staff, restrictive section 106 agreements that limit how money can be used, poor monitoring and delays caused by the involvement of other public bodies.
It suggests that, alongside the five-year rule, there should be a one-off programme to unlock developer contributions unspent for more than five-years, allowing councils to pool existing funds into new regional infrastructure investment funds.
“New homes need schools, GP surgeries, roads and public transport, and existing communities need to see the benefits of development too,” said Ben Cooper, research manager and head of the Fabian Housing Centre.
“Billions of pounds have already been collected to pay for these improvements, yet too much of that money is sitting unspent. Communities are left waiting for infrastructure they were promised, putting pressure on local services and making it harder to secure support for further housebuilding.
“Our proposed ‘use it or lose it’ rule would help ensure money raised from development is invested quickly and effectively in communities. If we want to build more homes and give people confidence in housebuilding, we need to deliver the infrastructure that goes alongside them.”
The Fabian Society was founded to advance a gradualist, reformist and democratic version of socialism and it was one of the groups that helped create the Labour Party at the start of the 20th century. It now operates as a think tank and is generally associated with moderates and centrists within the party.
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