Feature
Developers pay but the Chancellor wants more
In June 2026, the HBA released a report titled‘ Section 106 and CIL: Developers pay, but where is the money going? This report continued our work lobbying for the Government to ensure planning contributions are more proportionate and fairer, with the following recommendations:
• 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 nonallocated 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).
The HBA’ s proposals appreciated the importance of built environment levies in helping to fund decades of infrastructure underinvestment but identified that £ 9 billion of unspent contributions show that underinvestment continues. The solution was to implement a stick to ensure the money is spent by way to automatic levy return if not spent within five years, ensure money is spent where it is requested and a standardisation of reporting and language when councils publish their annual Infrastructure Funding Statements( IFS).
The Government clearly heard the point being raised; however, came to a very different conclusion on the solution. Via the‘ Standard Planning Agreements for Medium sized sites’ consultation it has tucked away policy proposals which would give councils more time to fail and greater flexibility to avoid criticism.
The consultation which closes on 20
October 2026, asks:
• Whether unspent affordable housing repayment periods should change, potentially extended to 10 years.
• If there should be changes to when affordable housing contributions are paid, potentially earlier in the development process.
• Where affordable housing contributions should be spent; eg: locally or regionally.
• How commuted sums for affordable housing should be calculated.
• The value placed on the cascade mechanism for affordable housing contributions.
• What the process for payment when using the cascade mechanism should be.
Rather than seeking to tackle the broken( British exceptionalist) approach to delivering affordable housing, the Government is seeking to ensure more money stays in council rainy day funds, earning vast amounts of interest, All while the housebuilding industry pays vast amounts in interest payments while waiting for the planning process to let a few homes get built.
No recognition or efforts made to ensure that developer levies( required to make a new development acceptable in placemaking and planning terms) is spent on the infrastructure that people blame developers for not delivering. No proposal for contributions to be automatically returned if unspent. No strategy to formalise language and the definition of‘ unspent’ fundings.
Just another way to ensure developers pay more, while government crafts a way to hold more of this money before facing scrutiny. To the Government’ s credit they have recognised that low profit margins and the financial risk of housebuilding is causing many housebuilders to leave the sector and they have actioned this through, temporary CIL removal in London, a medium sized site with streamlined planning mechanisms and more money for apprenticeships; however, peel all that back and they are finding new ways to tax, either directly, such as on employer contributions or passing it back, though locally set planning fees.
Planning contributions exist to mitigate the impacts of development, and the rules should not be changed because councils fear spending the money and actually building something which may upset a vocal minority. Another tax grab will not fix the housing crisis, not make better places and not encourage growth. In fact, it will do the opposite.
68 www. britbuild-magazine. co. uk