Luton Borough Council failed to collect £4.19 million in developer contributions that had fallen due, according to its own report to councillors. A councillor said the problem was discovered in 2019, but firm recovery action did not begin until November 2024. The council's external auditor, Grant Thornton UK, is now due to lead an investigation.
Almost all of the money comes from one recent site, not from old agreements. A deal signed in July 2020 for Caddington Road and Newlands Road accounts for £4,014,525, or 96 per cent of the total. That agreement was signed a year after the collection problem was first identified, and the council's table shows its payments fell due by 2021. The developer has paid £3,010,875 so far, and the rest is on a payment plan.
The report went to the council's scrutiny finance review group on 26 October. It says a review of all 494 Section 106 agreements since 1990 found that payments falling due from 2010 onwards had not been collected. The total identified for recovery was £4,193,345. Of this, £3,179,082 has been recovered, and the remaining £1.0 million is on agreed payment plans. The original obligations behind these sums totalled £2,929,566; the amount now due is 43 per cent higher because of interest and indexation built into the agreements.
The other unpaid sums were small and dated back years: £1,022 from a 2010 agreement at Albert Gardens, £4,002 from a 2010 agreement on Hitchin Road and £34,056 from a 2013 agreement on Ramridge Road. Each has since been paid or put on a payment plan.
Councillor David Franks, an independent member for Barnfield, asked for the report. He said a "very longstanding problem" with collecting the payments was discovered in 2019, but the council did not start serious efforts to collect until November 2024. Councillor James Taylor, the Labour chair of the review group, acknowledged at the meeting that "the delay in taking firm action" from 2019 to 2024 was "a pretty serious systemic failing".
Labour ran the council throughout that period. Hazel Simmons led the council for 19 years until May 2026. Robin Porter was chief executive for six years until April 2025. Neither has been found personally responsible for the delay, and the report does not explain it. Mark Fowler, chief executive since July 2025, agreed to commission the investigation. Amjid Ali, the Liberal Democrat who became leader on 14 September 2026 after Labour lost control, said: "It's worrying to find there've been systematic failings with the Section 106 collections."
The scale of the problem is disputed. Franks said a private report from December 2025 showed £138 million was recoverable, and that £10.4 million in original obligations had roughly doubled to £20 million with interest. Sarah McLaughlin, the council's director of sustainable development, told the meeting that amounts "approaching £140m are significantly overstated, and will include projection for monies due to the council in future years", naming sites such as Power Court. She said an earlier figure of £10 million "may have included duplicate agreements". Julie Lorraine, the service director of finance, said none of the debts had been written off and that no payment falling due between 2021 and 2026 was outstanding.
The difference matters because a Section 106 sum becomes payable only when a trigger in the agreement is reached, such as construction starting. The council's 2024/25 Infrastructure Funding Statement records £11.06 million agreed in that year alone, against £855,669 in financial contributions received; most agreed money is not yet due. The council's report says it collected about £15 million through normal processes since 2010, so the £4.19 million that went uncollected equals more than a quarter of what it did collect.
Lorraine said the investigation will cover whether an instruction was given not to collect amounts under £10,000, which the planning team denies; why the liabilities accumulated; and why the matter was reported late to the review group. The scope was agreed with the monitoring officer. She said the auditors will decide how long the work takes, and no completion date has been set.
The report says recovery work is continuing, further developments are under investigation, and its figures are "the current position rather than the conclusion of the historic review". Recovered money is ring fenced to each agreement's purpose: money from 8 Rockley Road has paid for fencing, an access gate and a feasibility study at three primary schools. The report does not say which infrastructure, if any, was delayed while £4.19 million went uncollected.