Proposed rule change would let councils generate more public benefit from land sales, by Richard Garlick

The government set itself a target of releasing enough public land for 160,000 new homes between 2015 and 2020. But concerns have been expressed about how much public benefit these land sales are generating.

Research by the New Economics Foundation think-tank showed that 20 per cent of new homes to be built on recently sold public land would be classified as affordable, a figure it described as disappointing.
 
Now ministers have taken steps to help councils, at least, to secure public benefits when they dispose of land. In papers released alongside last week's Budget, the government proposed  to make it easier for authorities to sell land for less than its full market value, as part of deals with developers to deliver public benefits such as affordable homes.

At the moment, councils who want to sell land held for planning purposes for less than the market would pay, in order to secure a public benefit, have to seek consent from the communities secretary. The government is asking for views on whether this requirement should be lifted, or alternatively only applied when the sale price would be anywhere from £2 million to £10 million less than the market would pay.

How helpful will this be to councils who want to secure long-term public benefits as a result of land sales? Sceptics will question the significance of the need to consult the secretary of state in dissuading councils from doing such deals.

They will argue that instead it is the pressing need for funds that pushes councils to seek the maximum return on their assets, even if it leaves little scope for funding regenerated town squares or social homes. Town halls will be reluctant to make use of any new freedom that yields less cash, they will say.

But public and private sector representatives that Planning spoke to this week suggested that this view misunderstands the extent to which local authorities are driven by a desire to show that they are delivering their policies.

Some will always seek the highest cash return for their assets, they accept. But most would be keen to use any increased flexibility to accept less than the top market price for their land in return for concrete public benefits.

Of the 39 requests that the MInistry of Housing, Communities and Local Government has received over the past three years from councils to dispose of land at less than best value, only slightly over half were granted consent. So, as it stands, the process of seeking consent is certainly not a formality for councils.

Of course, reducing or removing the need to consult the secretary of state would represent no more than a small rationalisation of the red tape surrounding council land sales.

And it would not affect the many other public landowners who would still need permission to accept anything other than the highest bid.

But it would be a step in the right direction.

Richard Garlick, editor, Planning // richard.garlick@haymarket.com


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