Thousands of affordable homes are sitting empty because of “systemic failings” in the government’s planning and housing contribution system, a cross-party committee of MPs has warned.
A Public Accounts Committee (PAC) report published on Friday says the system designed to secure funding for affordable housing and local infrastructure from developers “is not working properly” and leaves communities short-changed.
The inquiry found that at least 17,000 affordable homes built under Section 106 (S106) agreements remain unsold. By contrast, the government’s own Affordable Homes Clearing Service, set up to connect developers with buyers, lists only about 800 homes, with officials unable to explain the “significant disparity”.
Sir Geoffrey Clifton-Brown MP, PAC’s chair said the figures exposed “a senseless, wasteful system failure”.
“This country is in the middle of an acute housing shortage,” he said. “To see any affordable home sitting empty in this context is unacceptable. Government does not even appear to know how many such homes there are — and that is indefensible.”
The committee said that a chronic shortage of skilled planning officers in local councils means developers often outmanoeuvre them during negotiations over contributions.
More than half of English local authorities reported difficulties recruiting planners in 2022, according to the Local Government Association, with many staff moving to better-paid private sector roles.
The report warns that this “asymmetry of skills and resources” leaves councils struggling to challenge developers’ claims about whether projects are financially viable – meaning communities may lose out on affordable housing or infrastructure.
The PAC urged the Ministry of Housing, Communities & Local Government (MHCLG) to publish updated guidance on viability assessments to prevent developers from “gaming the system”.
The report also reveals a sharp decline in the number of councils with an up-to-date local plan – down from 149 in 2019 to just 86 (29%) this year. Without such plans, local authorities risk missing housing targets and failing to collect appropriate developer contributions.
Meanwhile, only half of local authorities were operating the Community Infrastructure Levy (CIL) in 2024 – a mechanism intended to make developer payments fairer and more transparent. The PAC called on the government to identify where CIL could be viable and promote wider adoption.
The committee criticised the government for failing to collect adequate data on developer contributions or to share best practice among councils. Around 17% of local planning authorities did not publish their legally required infrastructure funding statements for 2022–23, it said.
The MPs said the ministry’s incomplete data meant it could not confidently assess how effectively the system was operating, nor diagnose problems such as the large number of unsold S106 homes.
The PAC’s seven recommendations include improving data collection, ensuring all councils produce infrastructure funding statements, expanding the CIL, and addressing the shortage of qualified planners.
Sir Geoffrey warned that unless government tackled the underlying problems, it would struggle to meet its housebuilding ambitions.
“Without a functioning pipeline of skilled planners, councils will continue to be outmanoeuvred in negotiations with developers,” he said. “If government is serious about fixing the housing system, it must fix the system of developer contributions that underpins it.”
Image credit: PHOTOCREO Michal Bednarek/Shutterstock
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