Source · National Audit Office
Improving local areas through developer funding
This report assesses whether MHCLG is overseeing an effective system of developer contributions that delivers the intended benefits.
Published: 6 Jun 2025
Recommendations: 10
Type: Value for Money
NAO confirmed: 10
Department: Ministry of Housing, Communities and Local Government
Recommendations
In the short term, we recommend that MHCLG should introduce standardised templates for Section 106 documentation, and consider introducing templates for agreements, to reduce the amount of work for LPAs and improve consistency across areas.
Recommendation 2
In the short term, we recommend that MHCLG should amend the requirements relating to the content and presentation of IFSs, in order to make them more consistent and accessible for the purposes of local accountability.
Recommendation 3
In the short term, we recommend that MHCLG should assess whether improving the content of IFSs would be the most effective way to provide stronger data on developer contributions, and would allow better insights and good practice to be drawn out.
Recommendation 4
In the short term, we recommend that MHCLG should review the perceived conflicts of interest that arise from consultants representing both LPAs and developers with regard to viability assessments, and determine whether any action is needed.
Recommendation 5
In the short term, we recommend that MHCLG should review viability assessments and how they are used, including evaluating whether removing them would make the system work better, or whether there are other ways of improving outcomes (such as open book costing).
Recommendation 6
In the short term, we recommend that MHCLG should help LPAs to increase capacity and capability by carrying out a full assessment of the Planning Capacity and Capability Programme to understand what works and disseminate lessons.
Recommendation 7
In the short term, we recommend that MHCLG should ensure Homes England reviews the impact of the Section 106 Affordable Housing Clearing Service, looking to make it a permanent service if successful and use the information gathered for wider benefits.
Recommendation 8
In the short term, we recommend that MHCLG should consider how it can use existing forums or communication channels to provide clarity for LPAs regarding planning matters that fall within its remit, and to signpost them to other sources of advice where appropriate.
Recommendation 9
In the longer term, we recommend that MHCLG should encourage a greater number of LPAs to use the CIL, by reviewing and removing barriers to introducing it for areas where it would be financially viable.
Recommendation 10
In the longer term, we recommend that MHCLG should explore whether there are simpler and more effective ways of mitigating the negative effects of development, including whether the benefits of Section 106 agreements could instead be captured through an expansion of planning conditions.
Public Accounts Committee follow-up
The Public Accounts Committee examined this NAO report and published its own recommendations. The government responds to PAC recommendations via Treasury Minutes.