New Government Guidance on disposal of Local Authority Assets: are we “on-message”?

The Guidance gives direction on property disposals for local authorities, alongside details of other government policies to support them to dispose of sites that could be made surplus. The Government acknowledges that releasing land is only the first step, needing the house-building industry to respond to this challenge, delivering high-quality homes at pace and supporting growing communities. It also promotes the “empowerment” of local authorities “to dispose of assets that could be made surplus and put to more productive use” by:

• consulting on updating the Transparency Code so that all local authorities can record details of their land and property assets on the Government’s electronic Property Information Management System (ePIMS);
• setting out principles where land or property is identified as surplus, including:

  • clear objectives and targets for land disposal from the outset;
  • disposals helping to deliver local planning objectives, such as the assessed need for housing and employment land;
  • early engagement with other public bodies and the market to seek to ensure that land is used as efficiently as possible and is attractive to the market;
  • appropriate type and scale of investment determined prior to disposal, again to seek to ensure the best outcome for authorities; and

  • acknowledging that it is for the local authority to determine the most appropriate sales mechanism for their asset and suggesting a number of ways in which the disposal of land can be undertaken, whilst also noting that facilitating the release of more public land for housing will not always be met through the outright disposal of land. The guidance notes that local authorities could deliver homes outside of their Housing Revenue Accounts via a number of possible models, including joint ventures.

However, the document is relatively silent on how to retain and develop assets to generate income streams that will help councils achieve “self-sufficiency” by 2020. In terms of supporting local authorities in disposing of land, the guidance highlights:

• the One Public Estate (OPE) programme, which is to provide funding and practical support to deliver collaborative property-focused projects that received £37 million funding in 2015, for which a prospectus is expected to be published for phase 4 imminently;
• the Starter Home Land Fund for which a prospectus has been published inviting local authorities to work with the Homes and Communities Agency (HCA) to access the Fund;
• the HCA providing support to local authorities seeking its assistance to realise their land disposal plans, such as identifying those sites with the greatest potential, procurement of professional advisers through the HCA’s framework panels, and direct support from the Advisory Team for Large Applications;
• the extension of the garden cities programme, for which it highlights a prospectus will be launched ‘shortly’, that offers renewed support to larger-scale garden towns (10,000+ homes) and a new programme of support for garden villages and smaller garden towns (1,500-10,000 homes); and
• that from 1 April 2016 (to 31 March 2019), local authorities will be able to spend receipts from asset sales (excluding Right to Buy) on the revenue costs of reform projects (subject to the guidance and direction issued by the Secretary of State), meaning that local authorities will now be able to reinvest the proceeds of asset sales in their services with the expectation that this will enable local authorities to "deliver more for less".

So, from a property and development point of view the Guidance reinforces the contents of the Housing and Planning Bill insofar as it emphasises the importance of Starter Homes, using Brownfield land for the development of housing (especially Starter Homes) and the creation of the register containing details of local authority land assets to create an efficient system for local authorities to work together in achieving the Government’s housing target.

What should be noted however is that whilst the Guidance provides some further technical guidance to local authorities and notes that HCA advice and support may be available, we have yet to see any firm details on the mechanics of these initiatives and therefore it will be interesting over the coming months to see how the systems are intended to work.

The Guidance sets out the Government’s 'manifesto' for local authority disposal of assets but it does not tell the whole story. We help councils, developers, community groups and housing associations collaborate to make better use of public assets and to deliver viable capital and revenue streams in lots of ways.

For more information

To learn more about the disposal of Local Authority Assets, please get in touch with Sarah Patrice, Mark Cook , Oliver Geidel or Amy Walker.

For a copy of the newly published Guidance please follow this link.