Developer Contributions (Infrastructure Delivery)

1st reading
Tuesday 27th October 2026 Commons Chamber

Motion for leave to bring in a Bill (Standing Order No. 23)

14:34

[James Naish (Rushcliffe) (Lab)]

I beg to move,

That leave be given to bring in a Bill to make provision about the use of developer contributions for the delivery of local infrastructure; to make provision about the powers and responsibilities of public authorities and other public bodies in relation to such contributions; and to make further provision in relation to such contributions.

Nine billion pounds, Madam Deputy Speaker—that is how much money in developer contributions is currently sitting unspent in local authority bank accounts across this country. This is money collected from house builders and commercial developers to pay for schools, GP surgeries, leisure centres and roads. It is money that has already been paid by developers, which would ideally be being spent, at no extra cost to the taxpayer, in local economies up and down the country today—but it is not. Instead, it is sat in bank accounts, where, year on year, the figure grows.

At a time when every community in this country is calling for more investment, it is my view that we cannot afford—either morally or economically—to sit on this amount of money, as inflation devalues the contributions originally made. For me, this is a major problem, and one that all Members should be interested in. I am tabling this ten-minute rule Bill, which will hopefully bring attention to the problem while also suggesting some initial solutions.

I asked the internet what I could buy with £9 billion. First, it told me that that was equivalent to roughly £135 for every person in the UK. It then told me that for that money, I could pay for 33,000 homes at £272,000 a piece; nearly four years of school rebuilding funding at £2.4 billion per annum; 18,000 electric buses, assuming £500,000 per bus; or 1.5 million household solar installations at £6,000 per installation. In short, this amount of money is transformational. It is enough money to improve several struggling sectors at the same time. What is more, this money is not theoretical; it exists, it has been paid, and local authorities are currently the custodians of it.

For those who have not been involved with local government finance and planning before, let me briefly describe what is happening. When developers build homes or commercial spaces, they are normally required to pay towards the associated infrastructure as part of their planning permission. When new homes are built, the developer therefore contributes to new schools or school places, to GPs and/or local hospitals, to leisure facilities and/or to other local infrastructure. Crucially, the contribution is exactly that: a partial payment that another developer will also need to pay towards in due course to complete the intended project.

Each year, the Home Builders Federation publishes data on how much money is unspent, and each year, the figure is going up. It has gone from around £8 billion in total in 2024-25, when I first raised this issue in this place, to almost £9 billion in 2025-26. Within that total, the latest data shows that there is £2 billion waiting to be spent on schools and £700 million for affordable housing. It also shows that £3 billion—a third of the money held—has been held for more than five years.

In my constituency of Rushcliffe, the situation is particularly acute. Our local council is holding around £40 million in section 106 money and another £8.5 million in community infrastructure levy money. That is money that my constituents desperately want to see spent, often on infrastructure that they were promised when they bought a house, sometimes many years ago.

The challenge with spending this money is so extreme that in some cases, developer contributions are at risk of being returned. The village of East Leake, in my constituency, which has grown by 40% since 2001, has needed a new health centre for the past 20 years. Due to delivery and value for money challenges, we are currently in a situation where funds have been held on file for so long that almost £500,000 of developer contributions are due to be returned. To a community that has waited for investment for two decades, this is unconscionable. In nearby East Staffordshire, almost £400,000 was returned to a developer in 2023 after the money was not spent in time, and there are many other cases across the country. In many cases, additional public sector support is ultimately required to close developer funding gaps.

This is not the failure of any one council or developer. We all know that costs rise, that land can be lost, that partners do not act quickly, and that councils can at times lack capacity. Yet we still have not put a backstop in place. There is no mechanism by which ringfenced pots of money can be pooled together, no deadline by which councils must make every endeavour to facilitate works, and no power for councils to easily revisit old agreements. In short, there is no obligation on anyone to act. That means that the money does not move. It simply accumulates while residents wait for action and delivery costs increase ahead of bank interest rates.

In the current economic climate, I do not think that this situation is good enough, so I propose this Bill to achieve four things. First, it would introduce a backstop. Where contributions have not been spent within a set period, councils should have more powers to reallocate them to related public infrastructure in their area—subject, of course, to democratic oversight. Time and again, we saw that if things are not built quickly, the funding gap grows. We need to develop a system that recognises that and seeks to mitigate it as best as possible.

Secondly, the Bill would introduce a duty to plan. Where money is held for education, health or transport, I believe that the body responsible should produce a delivery plan within 12 months of the first developer contribution being agreed. Accountable bodies must be clearer about how they plan to get spades in the ground.

Thirdly, the Bill addresses transparency. I believe that all local authorities should produce a standard public infrastructure funding statement showing how much has been collected, what for, and when the money is expected to be spent. There is not currently a standardised way of doing this.

Finally, I believe that we need to look at a sensible bridging loan facility for local authorities to close existing or emerging gaps, to be repaid from future contributions as they come in. This would mean that a school or health centre could open as families are arriving, not years later. As MPs, we all know that, handled badly, new developments become a source of grievance. Handled well, they become something else: a story of investment.

I know that an updated developer contribution system could not guarantee that all promised infrastructure would be built quickly, but I believe that the current situation fails everyone. It fails councils and councillors who want to deliver infrastructure; it fails local supply chains and businesses who want to help build; it fails developers who want to deliver on their promises for multi-purpose sites; and it blatantly fails residents who lack the services they were promised, often for years on end.

Ultimately, given that we have an important fiscal event taking place tomorrow, it should be stated on the record that unspent developer contributions fail our economy and our country’s growth strategy. Nine billion pounds in local authority bank accounts is not growth; it is deferred jobs, deferred infrastructure and deferred community benefit. We should not stand for it any longer. Good growth in every postcode requires councils that can build the infrastructure that their communities need. This Bill would give them that power.

I believe that a more efficient, outcome-centred approach to spending developer contributions is something that everybody in this place wants to see. It is something we must see. I therefore commend this Bill to the House.

Question put and agreed to.

Ordered,

That James Naish, Alistair Strathern, Dr Allison Gardner, Andrew Cooper, Chris Bloore, Dave Robertson, Leigh Ingham, Maya Ellis, Rachel Taylor and Richard Quigley present the Bill.

James Naish accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 19 March 2027, and to be printed (Bill 167).