Local authorities should be given greater freedom to use Community Infrastructure Levy funds for skills and training programmes where shortages of skilled workers are delaying construction and economic development, according to professional services firm Blick Rothenberg.
The proposal comes after analysis by the Home Builders Federation found that councils in England and Wales are holding around £2.2 billion in unspent Community Infrastructure Levy receipts. The average council operating the levy is estimated to hold about £13.9 million, although some authorities have accumulated substantially larger balances.
Mark Cunningham, a partner at Blick Rothenberg, said councils should be allowed to direct part of the money toward addressing workforce shortages while continuing to fund essential infrastructure.
He said the levy had played an important role in supporting infrastructure but argued that skilled workers were also necessary to deliver roads, schools and other projects.
The Community Infrastructure Levy is a charge imposed by local authorities on qualifying new developments to help pay for infrastructure required to support population and economic growth. Funds can be used for projects including schools, transport improvements, healthcare facilities and community assets.
Cunningham said a portion of the money could instead support apprenticeships linked to major developments, construction training and programmes aimed at industries facing severe recruitment problems.
The HBF figures are based on a Freedom of Information survey covering 243 local authorities. The research, published in March, found that total unspent developer contributions reached £9 billion when Section 106 funds were included alongside Community Infrastructure Levy receipts.
The scale of unused funding has prompted renewed questions about whether existing rules allow councils to respond effectively to changing economic needs.
Cunningham said the levy was introduced almost two decades ago, when economic conditions were different. He argued that labour shortages have now become one of the main obstacles to growth in sectors such as construction, engineering and infrastructure.
He said some regions had projects ready to proceed but lacked enough skilled workers to complete them, creating a situation in which development was being constrained by workforce shortages rather than a shortage of investment opportunities.
The proposal comes amid wider concerns that money collected for workforce development is sometimes left unused. Employers have previously highlighted large amounts of unspent apprenticeship levy funding.
Cunningham said using a portion of developer contributions for training could create a stronger connection between new construction, employment and local economic benefits.
He stressed that Community Infrastructure Levy funds should continue to finance infrastructure but argued that investing in people should also be considered part of supporting growth.
The proposal would require changes to the rules governing how levy receipts can be spent, giving councils greater discretion over whether some funds could support training and apprenticeships.
With billions of pounds remaining unspent and employers continuing to report difficulties recruiting skilled workers, the debate is likely to intensify over whether local authorities should receive more flexibility in using developer contributions.
