It has been a source of rumour, frustration and anger for years. Ask any developer about their latest big scheme and at some point, they will mutter darkly about the Section 106 or Community Infrastructure Levy (CIL) payments they have had to make.
It is not just the eye-watering sums involved they take issue with. All too often, there is scant evidence of the supporting or mitigating infrastructure the payments are supposed to have financed. The suspicion is that councils are spending only a fraction of what they have received and that the rest has disappeared into a sizeable black hole.
Quite how big, no one knows. There has been no requirement on the part of local authorities to disclose the figures and dozens haven’t. Until now.
This month, new laws came into effect requiring councils to publish an annual report disclosing the size of their payments and how much they have spent.
The figures are not expected to paint a pretty picture and, as a six-month investigation by Property Week reveals, when that full picture does emerge, it could be even more damning than feared.
In February, Property Week sent freedom-of-information (FOI) requests to all 343 local authorities in England asking how much in Section 106 and CIL payments they had received between 2013 and 2018, and how much they had spent.
Having crunched and analysed the responses, we can reveal that local authorities across England received at least £4bn in infrastructure contributions from developers over the period, but only spent 37% of what they had received. More than £2.5bn – or 63% – of the money they were paid by developers remains unspent.
These numbers are just the tip of the iceberg. Of the 343 councils sent the FOI request, 43 failed to respond, some refused to disclose their figures and many that did provided only partial data.
So far, Property Week has only been able to analyse 61% of the data collected.
Even the figures to date have sparked outrage among senior industry figures.
“I think it’s a scandal,” says Barry Jessup, director at developer First Base.
He points out that in paying the CIL and Section 106 levies, developers are making a promise to communities about improvements in public realm, jobs and the financial contributions that will result from their projects.
“To effectively be breaking those promises is scandalous,” he says.