Local authorities are holding an estimated £2.2 billion of unspent Community Infrastructure Levy funds while the developments that generated the money struggle to find the workers to build them, and one leading advisory firm says the Government should let councils spend a slice of that cash on fixing the labour shortage.
The intervention comes from Blick Rothenberg, the audit, tax and business advisory firm, which argues that the Community Infrastructure Levy (CIL) should be used more flexibly to support growth.
Mark Cunningham, a Partner at the firm, said: “Analysis by the Home Builders Federation (HBF) estimates that councils are holding an estimated £2.2 billion of unspent Community Infrastructure Levy (CIL) funds. The Government should consider giving local authorities greater flexibility to use a proportion of these funds where skills shortages are holding back development and economic growth.”
The figure comes from HBF research published in March 2026, which put total unspent developer contributions across England and Wales at around £9 billion once Section 106 balances are included.
According to Cunningham, the average authority operating CIL is estimated to hold £13.9 million, and some councils are holding significantly more. “Despite a slowdown in development activity in recent years, these balances continue to rise,” he said.
CIL was introduced almost twenty years ago to help pay for the infrastructure needed to support growth. Under Government guidance on the levy, local authorities can spend receipts on schools, transport improvements, healthcare facilities and community assets.
Cunningham is not proposing to scrap that. “CIL has played an important role in funding infrastructure across the country and should continue to do so, but investing in people is ultimately key to delivering infrastructure,” he said.
His point is that the economy’s bottleneck has moved. “As balances continue to accumulate, the challenges facing the economy have changed,” he added.
“Today one of the biggest barriers to growth today is a lack of skilled people. Construction, engineering, and infrastructure projects all face difficulties recruiting and retaining skilled workers. In many parts of the country, growth is constrained not by a shortage of projects, but by a shortage of the workforce needed to deliver them.”
That diagnosis will be familiar to anyone following the Government’s housing numbers. Industry experts have already described the 1.5 million homes pledge as political fantasy, with workforce capacity cited as one of the structural barriers, and separate research suggests Labour will fall well short of its housing target on current trends.
The firm’s proposal is that a proportion of accumulated CIL receipts should be redirected towards the people who build things.
Cunningham said the money could be used “by incentivising apprenticeships linked to major developments, supporting construction skills programmes and creating training pathways into sectors facing severe labour shortages”. In his view, “this would create a clearer link between development and economic opportunity for local communities”.
He framed the logic simply: “If development generates jobs and drives growth, it should be considered reasonable that developer contributions help create a workforce to deliver and sustain that growth.”
Any change would require ministers to amend the rules governing how CIL can be spent, and it would land in a policy environment already crowded with planning reforms aimed at boosting growth.
What this means for investors
For landlords and portfolio investors, the headline figure is less about council accounting and more about delivery. Developer contributions are ultimately priced into land values and scheme viability, and £2.2 billion sitting idle is money that has already been paid by the development industry without yet producing the roads, schools or surgeries that make new housing locations attractive to tenants and buyers.
If ministers took up the proposal, investors in and around major development sites could benefit twice over: faster delivery of stock as the labour pinch eases, and a more visible local payoff from schemes that communities often resist.
If they do not, the trend Cunningham describes, of balances rising even as activity slows, points to a system storing up value rather than deploying it. Either way, the size of a council’s unspent CIL pot is becoming a useful due diligence question for anyone weighing up where the next wave of supply is actually likely to arrive.
