Source · National Audit Office

Improving local areas through developer funding

Published: 6 Jun 2025 Recommendations: 10 Type: Value for Money NAO confirmed: 10 Department: Ministry of Housing, Communities and Local Government

This report assesses whether MHCLG is overseeing an effective system of developer contributions that delivers the intended benefits.

Dept: Ministry of Housing, Communities and Local Government Topics: Commercial and financial managementHousingInfrastructure financeLocal services and housing nao.org.uk →

Recommendations

10 items
9 accepted 1 partially accepted 3 implemented 7 in progress
Rec Recommendation Addressee Acceptance Implementation
1
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.
Ref Page 11, 21a · Implemented Q4, 2026-27
Ministry of Housing Communities and Local Government Accepted In progress ✓ NAO
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.
Ref Page 12, 22j · Implemented Q4, 2026-27
Ministry of Housing Communities and Local Government Accepted In progress ✓ NAO
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.
Ref Page 11, 21b · Implemented Q3 2026-27
Ministry of Housing Communities and Local Government Partially accepted In progress ✓ NAO
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.
Ref Page 11, 21c · Implemented Q2 2026-27
Ministry of Housing Communities and Local Government Accepted In progress ✓ NAO
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.
Ref Page 11, 21d · Implemented Q3 2025-26
Ministry of Housing Communities and Local Government Accepted Implemented ✓ NAO
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).
Ref Page 12, 21e · Implemented Q2 2026-27
Ministry of Housing Communities and Local Government Accepted In progress ✓ NAO
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.
Ref Page 12, 21f · Implemented Q4 2025-26
Ministry of Housing Communities and Local Government Accepted Implemented ✓ NAO
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.
Ref Page 12, 21g · Implemented Q1 2026-27
Ministry of Housing Communities and Local Government Accepted In progress ✓ NAO
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.
Ref Page 12, 21h · Implemented Q3 2025-26
Ministry of Housing Communities and Local Government Accepted Implemented ✓ NAO
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.
Ref Page 12, 22i · Implemented Q3 2026-27
Ministry of Housing Communities and Local Government Accepted In progress ✓ NAO

Public Accounts Committee follow-up

1 report

The Public Accounts Committee examined this NAO report and published its own recommendations. The government responds to PAC recommendations via Treasury Minutes.

17 Oct 2025 Public Accounts C… 46th Report - Improving local areas through developer funding — 22 recommendations · parliament.uk