The Property Council of Australia's latest audit of the section 94 infrastructure levies for 2010-11 found that Liverpool Council had the third highest unspent funds in Sydney, after Ku-ring-gai and Sydney Council.

Liverpool Council collected almost $14 million in infrastructure levies in the past financial year but only spent just over $5 million.

It now has a total of $56.5 million untouched.

Liverpool received the fifth highest amount of developer levies in Sydney.

Liverpool Council's acting general manager, David Tuxford, said the money would be spent in the near future on a range of infrastructure for the area.

"The council has spent almost $230 million for the provision of infrastructure within our urban release areas and is proposing to spend the equivalent of $56.5 million over the next two years to provide some critical urban infrastructure including arterial roads, sporting and community facilities, leaving a balance of $368.5 million in outstanding work to be collected," he said.

"Some of the identified works are estimated to cost tens of millions of dollars and although a developer may have contributed towards those works, until such time as all funds are received or development has reached a stage to warrant such works, funds cannot be spent."

The audit found local councils across Sydney were sitting on a total of more than $650 million in unspent infrastructure levies.

NSW executive director Glenn Byres said there was no good excuse for stockpiling infrastructure levies. "Councils consistently cry poor over the lack of infrastructure spending across Sydney but too many are guilty of starving their own communities," he said.

"The levies are collected on the promise they will be spent on essential infrastructure - which is exactly what councils are failing to do."

West Hoxton resident Jeff Gough was not impressed to hear Liverpool Council was sitting on that money while the community lacked some basic infrastructure, like sewerage.

"For a simple $2 million we could have sewerage and they're sitting on $56 million," he said. "Liverpool Council wants us to pay for parking and they have $56 million.

"There are lots of roads out Austral way that need fixing. The council needs to show people how they're going to spend it."

He said if councils didn't know how to use the funds then it should be returned to the federal government to allocate it.