Community land Recent proposals aim to put surplus public sector land to community use. Richard Kendall scrutinises the detail
In February, housing minister Grant Shapps announced that Communities and Local Government (CLG) will be tackling the perceived problem of surplus property assets held by public sector bodies. The efficiency and effectiveness of these bodies are firmly in the spotlight, so it is little wonder that the coalition is attempting to bring surplus publicly owned property back into use.
Empty buildings, derelict properties and vacant land can all have a negative effect on communities, and surplus assets lying empty represent an unnecessary cost.
CLG estimates that 16,600ha of previously developed land owned by local authorities and other public bodies could be redeveloped of this, 7,500ha is thought to be suitable for housing.
Existing powers
At present, two systems operate side by side:
? Register of surplus public sector land:
Treasury guidance Managing Public Money asserts that public bodies may transfer surplus property assets among themselves at open market value without having to offer the property on the open market. To facilitate this internal market, the Homes and Communities Agency (HCA) manages the register of surplus public sector land, which is accessible only to government departments and public bodies.
Once a public body has declared surplus property and placed it on the register, other such bodies have 40 working days in which to express an interest in acquiring it. If there is no interest, the property can be offered for sale on the open market.
However, the use of the register is inconsistent: NHS bodies must place surplus property on the register, but other departments or authorities are not required to do so, considering its use as best practice or optional.
? Public request to order disposal: Under section 98(1) of the Local Government, Planning and Land Act 1980, the secretary of state for communities and local government (or the minister for finance, local government and public services in Wales) can order the disposal of property that “is not being used or… sufficiently used for the purposes of the performance of the body’s functions or of carrying on their undertaking”.
Orders are not usually made of the secretary of state’s volition. They follow a written request from members of the public, known as a public request to order disposal (or Prod). Orders may not specify to whom the property is sold.
Section 98 applies to a range of public bodies, including local authorities, police authorities, the Environment Agency, the Coal Authority, the Civil Aviation Authority and the BBC. Central government departments, housing associations and some HCA assets are exempt.
The CLG announcement characterised the Prod system as a “little-known and little-used power”. A freedom of information request made through WhatDoTheyKnow.com reveals that 57 Prod applications have been made since 1997, but only one resulted in an order.
Proposals: Business as usual?
CLG’s proposals are straightforward:
? rename and replace Prod with the community right to reclaim land (CRRL)
? open up access to the register of surplus public sector land and
? expand the number of participating public bodies.
Although the CRRL process will be all but indistinguishable from the Prod system, CLG aims to streamline it, with everything other than the most sensitive decisions being made below ministerial level.
The most important change will be the improved transparency of the public sector estate by making information on surplus property assets available on one online source. Users may be disappointed, since existing information relies on property being identified from descriptions only, rather than by reference to plans.
CLG plans a significant expansion of the number of participating public bodies. It is unlikely that the CRRL will extend to all public bodies, but if the register is to gain legitimacy it has to include departments with large property portfolios, such as education, health and defence.
The timetable for implementing the proposed changes is ambitious. Both the updated online register of surplus property and the regulations extending the number of public bodies to which the CRRL applies are due to be brought into effect by the end of May.
Implications of the changes
? Public bodies: The management of information relating to surplus property will have obvious cost implications for public bodies. Dealing with numerous CRRL requests may be an expensive distraction when budgets are thinly stretched. Most public bodies already manage surplus property disposals to maximise funds. However, greater transparency may require practical and cultural changes.
Public bodies will need to assess the risk of strategically acquired property or of planned expansions being inadvertently ordered for sale. They must be able to demonstrate that the property is not surplus to requirements and to produce an audit trail as evidence.
? Communities: The public will welcome the extension of the Prod system. However, it may be disappointed with the result of CRRL applications. Applicants may find that although they succeed in obtaining an order from the secretary of state, the property is purchased by another party. Uncertain funding of community groups and the lack of assurance that they will secure the property could deter applicants.
? Private sector: The political rhetoric surrounding the announcement has focused on the ability of communities and local groups to bring surplus assets back into use. However, the biggest benefit to the private sector will be the freedom to access previously confidential information and to track surplus property through the improved online register.
Since the proposals for the CRRL appear to be identical to the Prod system, sceptics can be forgiven for wondering whether the new powers are an expensive rebranding exercise. However, if fewer public bodies, central government departments and agencies are exempted from the CRRL, communities and the private sector may finally be in a position to force the disposal of surplus property more frequently.
Richard Kendall is a solicitor in the public sector property team at Hill Dickinson LLP
