Councils have failed to spend £375 million on new housing

Councils across England have been accused of hoarding hundreds of millions of pounds earmarked for affordable homes, according to research undertaken by HuffPost UK.

The news media firm found more than £375m was sitting in councils’ bank accounts instead of being used to build new houses, while two-thirds of the money was held by just 14 councils. The money comes from Section 106 Agreements, where councils get money from developers in exchange for granting planning permission for new housing developments.

The cash has to be used for specific tasks, such as affordable housing, new community facilities or road improvement projects. Almost £140m of the cash has been earmarked for new affordable housing schemes but has not been spent, while almost £100m has not been allocated to specific projects.

In the capital Southwark has £52.6m, Camden has £37.6m, Kensington and Chelsea has £21m, Wandsworth £20m and Hounslow almost £17m for affordable housing sitting unspent. The new Housing Minister Dominic Raab represents Elmbridge in Surrey, where the local council is sitting on £8m. The true figure for unspent money could be even higher, as the London boroughs of Islington, Bexley and Bromley, and the councils in Manchester, Liverpool and York, did not respond to the paper’s enquiries.

Reacting to the news, former Housing Secretary Sajid Javid MP said:

“Section 106 payments help deliver the vital infrastructure required for councils to build the homes that this country needs. We expect councils to use funding from developers in line with the priorities agreed in their local plans.”

It is understood Mr Javid asked officials to undertake a review of the S106 process before his recent move from MHCLG to the Home Office.