Out-Law / Your Daily Need-To-Know

Think-tank report warns local authorities against disposal of public assets at undervalue

Out-Law News | 17 Sep 2014 | 4:48 pm | 1 min. read

A report from local government and localism think-tank Localis has called for a long-term approach to getting best value from surplus public land and warned local authorities against quick disposal of assets at an undervalue.

The Public Land, Public Good (41-page / 1.8 MB PDF) report, released this morning, was produced by Localis in tandem with developer Cathedral Group, following interviews and discussions with representatives of local and central government and the property sector.

The report said that the "parlous state of national finances" and cross-party desire to boost housing supply meant that public bodies were more likely to consider the release of public land for development than in the past. Localis estimated that local authorities held land worth £170 billion and said that its survey suggested "councils in England are planning to sell and redevelop £13.5bn worth of their own assets in the next five years".

However, the authors also estimated that "up to £2.3bn of local authority assets could fail to achieve their full value over the next five years" and warned that a structured and transparent approach to the use of public assets was required in order to achieve "the best deal possible".

A series of measures were recommended to ensure that public assets were properly catalogued, reviewed and brought forward for development to the best public benefit. A requirement for "all arms of local government" to keep an up-to-date a register of assets and make it available to the public would increase transparency and reveal to both the public bodies and potential investors where surplus land was available, the report said.

The authors called for a local approach to the delivery of surplus land for sale or development, suggesting that councils be required to "develop estates strategies which focus on getting the best value from their assets", putting "a 'hit squad' of highly experienced officers" in charge of maximising returns.

The report recommended a change in the emphasis of HM Treasury guidance on how public bodies should achieve the best value for their assets. The guidance was "a little too immediate in its tone in stating that disposals should be undertaken as 'swift as the market will allow with reasonable value for money'", the report said. "The message to public landowners could be taken to be: sell the land as quickly as you can."

Localis suggested instead that the guidance could be "amended to focus more on long-term best value" and "specifically highlight the opportunities offered by longer term cash flows", such as offering a 100 year lease rather than the permanent disposal of public land and buildings.