Weaknesses in the developer contributions system intended to fund affordable housing and local infrastructure are undermining the ability of councils to negotiate with developers, spending watchdog says.

A new report by the National Audit Office (NAO) has identified a number of issues with the oversight of the developer contributions system, including incomplete data, local authority staffing gaps, unsold affordable homes and unspent funds.

Under the system, local planning authorities (LPAs) are responsible for securing developer contributions through a negotiated Section 106 agreement or a set Community Infrastructure Levy (CIL).

However, the NAO report warned that LPAs are facing staff shortages and a gap in skills compared to large developers who often have specialist negotiators.

Gareth Davies, head of the NAO, said: ‘To ensure the developer contributions system delivers value for money, important issues must be addressed, including reducing the imbalance in skills and experience between Local Planning Authorities and large developers; the complexity of financial viability assessments; and the lack of coordinated central government support.'

The HBF this week published an analysis which found that three-quarters of councils reported average Section 106 negotiation timescales exceeded 12 months.

The federation identified the lack of capacity in local planning authorities (LPAs) as a key factor in these delays.

An MHCLG spokesperson said: 'We have taken steps to strengthen the developer contributions system to ensure it helps deliver more affordable homes and infrastructure, alongside making the planning system faster, fairer and more effective.

'To drive this change, we are investing £46 million to bolster council planning teams and recruiting 300 new planners with the skills needed to deliver our seismic reforms and tackle the worst housing crisis in living memory.'