Over £9 billion in developer contributions remains unspent, raising serious concerns across digital construction and infrastructure delivery systems.
Research by the Home Builders Federation reveals that more than £9 billion in developer contributions is currently held in local authority accounts across England and Wales. These funds, secured through Section 106 agreements and the Community Infrastructure Levy, are intended to deliver essential infrastructure linked to new housing developments.
The breakdown includes £6.6 billion from Section 106 agreements and over £2.2 billion from CIL receipts. Despite their purpose, funding schools, transport networks, affordable housing, and healthcare, significant portions remain unallocated or delayed.
A Freedom of Information survey covering 243 local authorities indicates that approximately £3 billion of this total has been held for more than five years, often exceeding agreed delivery timelines. For digital construction professionals, this signals inefficiencies in infrastructure planning, pipelines and capital deployment.
Scale is substantial
The scale of unspent contributions is substantial when benchmarked against government housing investment. Annual expenditure on affordable housing grants is projected at £2.5 billion to £3 billion for the remainder of the current Parliament. In comparison, the £9 billion sitting idle represents a significant untapped resource.
From a digital construction perspective, delayed fund allocation disrupts integrated project delivery models, weakens data-driven planning, and limits the adoption of smart infrastructure systems. The lack of timely investment restricts the implementation of digital twins, BIM-led infrastructure planning, and connected urban systems.
Regional disparities
The distribution of unspent funds is uneven. While the average council holds £19 million in unspent Section 106 contributions and £13.9 million in CIL funds, certain authorities significantly exceed these figures. The London Borough of Tower Hamlets alone accounts for over £260 million in unspent contributions, highlighting regional concentration risks.
Other areas, including Hammersmith and Fulham Council, illustrate the disconnect between funding availability and housing affordability. The borough holds £30.5 million in unspent affordable housing contributions, despite property prices reaching 16 times average earnings.
For digital construction stakeholders, inconsistent data transparency across authorities limits the ability to align infrastructure investment with real-time housing demand and digital planning systems.
Declining transparency
Infrastructure Funding Statements (IFS) are critical for tracking developer contributions, expenditure, and future allocations. However, compliance is declining. While 90% of councils met reporting deadlines in 2020, this dropped to 75% by 2025.
Reduced transparency impacts the digital construction ecosystem by limiting access to structured, reliable datasets required for predictive analytics, automated planning workflows, and performance benchmarking. Without consistent reporting, stakeholders face challenges in coordinating multi-agency infrastructure delivery.
Capacity constraints
Local authorities cite staffing shortages, pre-allocation constraints, and administrative complexity as key barriers to spending developer contributions efficiently. These limitations directly affect the adoption of digital construction methodologies, including Building Information Modelling (BIM), GIS-integrated planning systems, and digital asset management platforms.
The Competition and Markets Authority notes that developer contributions account for 46% of local government spending on housing and communities. However, declining contribution levels—linked to reduced housing supply—combined with rising unspent balances create a systemic inefficiency.
This imbalance undermines efforts to modernise infrastructure delivery through digital transformation, as funding exists but is not mobilised effectively.
Cross-sector coordination gaps
The research also highlights £320 million allocated for healthcare infrastructure that remains unspent. Of this, £128 million is held by NHS Integrated Care Boards, often transferred from councils but not deployed.
In some cases, funding requests have been delayed or rejected, exposing coordination gaps between local authorities and healthcare providers. For digital construction, this fragmentation limits the integration of health infrastructure into wider smart city frameworks and data ecosystems.
Industry response
Neil Jefferson, Chief Executive of the Home Builders Federation, stated: “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.”
He added: “Urgent action is needed to ensure this money is spent promptly, supporting communities, improving local services, and driving growth.”
These concerns align with broader digital construction priorities, where timely funding is essential to enable integrated delivery models, improve asset lifecycle management, and support scalable infrastructure systems.
Unlocking developer contributions
The UK Government’s target to deliver 1.5 million new homes during this Parliament increases the urgency of addressing unspent developer contributions. Unlocking these funds presents an immediate opportunity to accelerate infrastructure delivery and enhance digital construction adoption.
Key priorities include improving data standardisation, strengthening reporting frameworks, investing in local authority digital capability, and aligning funding allocation with BIM-enabled project pipelines. Integrating digital tools into planning and financial management systems could significantly reduce delays and improve accountability.
Unlocking £9 billion in developer contributions is essential for enabling efficient infrastructure delivery, strengthening digital construction adoption, and ensuring communities benefit from planned housing growth across England and Wales.
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