ISSUED BY: Ministry of Housing, Communities and Local Government
ISSUE DATE: October 2018
Background: In February 2017, the government published a white paper, Fixing our broken housing market, setting out a series of objectives and potential policy changes. One objective was to maximise the housing contribution from surplus public land. Alongside this year’s Budget statement, ministers published a consultation on planning changes entitled Planning reform: supporting the high street and increasing the delivery of new homes. Part two of this paper concerned changes to the process for disposal of local authority land.
Key points: The consultation seeks views on the government’s intention to provide local authorities with greater flexibility to dispose of land at "less than best consideration". The government says it wants to "streamline the involvement of the secretary of state in the regime that governs disposal of land by local authorities at an undervalue". In principle, existing policy requires public land to be sold at the "best consideration that can be reasonably obtained". But the government accepts that there may be cases where it is appropriate for councils to sell sites for less than market value if doing so will deliver "wider economic, social or environmental benefits", such as affordable housing. At the moment, councils that wish to do this have first to seek approval from the secretary of state. The government says it believes this can delay disposals and hold up development.
This requirement to seek the secretary of state’s permission has already been waived for sites that are held by councils for purposes other than housing or planning and sold at an undervalue of less than £2 million. The Greater London Authority also has consent to dispose of sites for an undervalue less than £10 million.
The government is now consulting on whether to waive the need for councils to seek permission for the disposal of sites held for planning purposes. It is proposed that this exemption will apply when disposal will result in other economic, social or environmental benefits. Any changes to the disposal process are also expected to apply to combined authorities with powers to dispose of land, it says.
The government says it believes the proposed changes to the disposal process could allow sites to be sold with greater certainty, and that reducing the number of cases referred to the secretary of state would speed up decision-making in cases where the secretary of state retains a role.
Views are sought on the level at which the undervalue threshold should be set for disposal of sites without the secretary of state’s permission. Thresholds of £5 million and £10 million are being considered. The adopted threshold is expected to apply to sites held for planning purposes and also to sites held for purposes other than housing or planning, the government says. Views are also sought on whether there should be any financial threshold at all.